Definition ∞ DeFi TVL growth refers to the increase in the total value locked within decentralized finance protocols. TVL represents the aggregate value of all cryptoassets deposited into various DeFi applications, such as lending platforms, decentralized exchanges, and yield farms. This metric serves as a key indicator of the health, adoption, and overall liquidity of the DeFi ecosystem. Consistent growth often signals increasing user confidence and utility.
Context ∞ DeFi TVL growth is closely watched as a measure of the sector’s expansion and its ability to attract and retain capital. Current discussions often relate to the sustainability of high yields, potential security vulnerabilities in protocols, and the impact of macroeconomic conditions on asset values. Future developments will likely involve the expansion of DeFi into new asset classes, improved cross-chain functionality, and greater institutional participation.
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