Value Locked Metric

Definition ∞ The Value Locked metric, commonly known as Total Value Locked (TVL), represents the aggregate amount of digital assets deposited or staked within a specific decentralized finance (DeFi) protocol or application. This figure quantifies the capital committed to a particular platform, indicating its usage, liquidity, and overall economic activity. A higher value locked generally suggests greater confidence and utility in the protocol. It serves as a key indicator of DeFi ecosystem health.
Context ∞ The Value Locked metric is a primary indicator frequently cited in crypto news and analyses of the decentralized finance sector. Significant increases or decreases in TVL are closely watched as they can signal shifts in investor sentiment, protocol adoption, or overall market trends. It is a critical benchmark for comparing the relative size and importance of different DeFi projects. This metric guides investment interest.