TVL (Total Value Locked)
The total value of cryptocurrency deposited in a DeFi protocol or across an entire blockchain.
TVL is the most common metric for measuring the size of DeFi protocols and chains. If Aave has $10 billion in TVL, that means users have deposited $10 billion worth of crypto into it.
Higher TVL generally means more trust and adoption, but it's not a guarantee of safety. TVL can also be inflated through recursive borrowing (depositing, borrowing, re-depositing). Look at TVL alongside other metrics like revenue and audit history.
For USDC users, TVL helps you compare where to deposit. A lending protocol with higher TVL typically offers deeper liquidity and more stability, though the yields might be slightly lower.
Related Terms
DeFi (Decentralized Finance)
Financial services built on blockchain smart contracts that operate without traditional intermediaries like banks.
Lending Protocol
A DeFi application that lets users lend crypto to earn interest and borrow crypto against collateral.
Liquidity
How easily an asset can be bought or sold without significantly affecting its price.
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This definition is provided for educational purposes. USDC.org is an independent resource and is not affiliated with Circle Internet Financial.