TVL Growth Metric

Definition ∞ TVL growth metric measures the rate at which the total value locked in a decentralized finance protocol increases over time. Total Value Locked (TVL) represents the aggregate capital, typically in cryptocurrencies, deposited into smart contracts within a DeFi application. The TVL growth metric indicates the expansion of user participation and confidence in a protocol’s utility and security. A consistent upward trend often signifies increasing adoption and liquidity, making the protocol more robust and attractive for users.
Context ∞ The TVL growth metric is a primary indicator for assessing the health and adoption of decentralized finance (DeFi) protocols, frequently cited in crypto news. Discussions often compare TVL growth across different protocols to gauge market dominance and investor sentiment. While a high TVL is generally positive, analysts also consider the sustainability of the growth and the underlying economic mechanisms driving capital inflow.