Total Value Locked Analysis

Total Value Locked Analysis is the evaluation of the aggregate amount of capital deposited into a protocol's smart contracts. This metric is used as a proxy for the health, adoption, and security of a decentralized finance project.

A higher value suggests that more users trust the protocol and are willing to commit their capital for yield or utility. Analysts decompose this data to understand the composition of assets, the duration of deposits, and the concentration of liquidity providers.

While it is a popular metric, it must be analyzed alongside revenue and transaction volume to get a complete picture of the protocol's economic sustainability.