Total value locked (TVL)

What is "TVL"?

TVL indicator tracks the aggregate value of cryptocurrency deposited into decentralized finance protocols, as measured by the total amount of value held in smart contracts. 

Why is "TVL" important?

The "Total value locked" metric is a good way to track DeFi adoption. While liquidity can be withdrawn from lending protocol accounts, most protocols do not have that as an option, so the total value locked ends up being close to the total liquidity supplied to DeFi protocols.

How is "TVL" calculated?

TVL = Token liquidity supplied * Current token price