Total Value Locked (TVL) is a DeFi metric that estimates how much value users have deposited in a protocol, app, or blockchain ecosystem.
What TVL tells you
TVL can show how much capital is being used in lending pools, liquidity pools, staking systems, or other DeFi services. A higher TVL may suggest more usage, but it does not automatically mean a project is safe.
Limits of TVL
TVL can rise because token prices rise, not because more users joined. It can also be inflated by incentives, borrowed assets, or circular activity.
TVL is best read alongside security, fees, revenue, users, liquidity quality, and the details of the underlying smart contracts.