Total Value Locked

Definition ∞ Total value locked (TVL) is a metric used in decentralized finance to measure the total amount of assets deposited and staked within a particular protocol or decentralized application. It represents the capital that is currently committed to smart contracts and is therefore “locked” and unavailable for immediate withdrawal. A higher TVL generally indicates greater user confidence and economic activity within a protocol.
Context ∞ Total value locked is a key indicator frequently cited in news reports and analyses of the decentralized finance sector. Discussions often revolve around the growth trends of TVL across different DeFi protocols and ecosystems, as well as its correlation with token prices and overall market sentiment. Analysts are closely monitoring TVL as a proxy for the adoption and perceived value of decentralized financial services.