Total Value Locked
Total value locked represents the aggregate sum of all assets currently staked, deposited, or locked within a decentralized finance protocol. It serves as a primary metric for gauging the scale, trust, and adoption of a specific financial application.
In lending markets, it reflects the total supply available for borrowing, while in exchanges, it indicates the depth of liquidity pools. Changes in this metric are often driven by yield farming incentives, market sentiment, and protocol security perceptions.
However, total value locked can be misleading if it includes highly volatile or illiquid assets that do not support functional market activity. Analysts use this figure to assess systemic importance and the potential impact of protocol failure.