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What is the meaning of TVL in the context of cryptocurrencies?

avatarMcGregor RochaNov 24, 2021 · 3 years ago1 answers

Can you explain the concept of TVL (Total Value Locked) in the context of cryptocurrencies? How is it calculated and why is it important?

What is the meaning of TVL in the context of cryptocurrencies?
Cryptocurrencies
TVL
Total Value Locked

1 answers

  • avatarNov 24, 2021 · 3 years ago
    TVL, or Total Value Locked, is a term commonly used in the cryptocurrency space. It refers to the total value of assets that are currently locked in decentralized finance (DeFi) platforms or smart contracts. The calculation of TVL involves summing up the value of all the assets, such as tokens or cryptocurrencies, that are locked in a specific DeFi protocol. TVL is an important metric as it provides insights into the level of adoption and usage of a particular DeFi platform. A higher TVL indicates that more users are utilizing the platform, which can be seen as a positive sign for investors and developers. It also helps to gauge the overall health and stability of the DeFi ecosystem, as a higher TVL suggests a higher level of trust and confidence from users.

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