Total Value Locked (TVL) is a metric used to measure the amount of value locked into a decentralized finance (DeFi) protocol. It is an aggregate of all the cryptocurrencies and digital assets deposited into the protocol for purposes such as yield farming, staking, liquidity provision, and lending.
TVL is a valuable metric for assessing the growth and popularity of DeFi protocols and can help investors determine the potential returns that can be achieved through participating in these protocols. It is also an essential metric for tracking the overall growth of the Defi space.
TVL is calculated by summing up the value of all the assets locked into a protocol, taking into account the current market value of each asset. The value of an asset is determined by its current market price and the amount of that asset locked into the protocol.