DeFi TVL

Definition ∞ DeFi TVL, or Total Value Locked, represents the aggregate amount of cryptocurrency assets deposited into decentralized finance (DeFi) protocols. It serves as a key indicator of the overall health, adoption, and capital efficiency within the DeFi ecosystem. A rising TVL generally signifies growing investor confidence and increased utilization of decentralized financial services. This metric provides a quantitative measure of the economic activity secured by DeFi protocols.
Context ∞ The current discourse surrounding DeFi TVL is often linked to market sentiment and the growth trajectory of the decentralized finance sector. Analysts closely monitor TVL shifts across different protocols and blockchains to identify emerging trends and assess the competitive landscape. Debates frequently emerge regarding the nuances of TVL calculation, its susceptibility to inflation, and its predictive power for asset prices. Understanding TVL is fundamental for interpreting news related to DeFi’s expansion and its impact on the broader digital asset market.