Definition ∞ DeFi Locked Value, often referred to as Total Value Locked (TVL), represents the aggregate amount of digital assets currently deposited or staked within decentralized finance protocols. This metric serves as a key indicator of the health and user adoption of a DeFi ecosystem. It quantifies the capital committed to various decentralized applications, including lending platforms, decentralized exchanges, and yield farming protocols. A higher locked value generally suggests greater liquidity, security, and trust in the underlying DeFi projects.
Context ∞ DeFi Locked Value is a closely watched metric, reflecting investor confidence and the overall growth trajectory of the decentralized finance sector. Discussions frequently analyze its fluctuations as indicators of market sentiment and capital movement across different blockchain networks. Future trends indicate continued competition among Layer 1 and Layer 2 solutions to attract and retain locked capital. Understanding TVL is essential for assessing the relative prominence and activity within the DeFi landscape.
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