Total value locked (TVL) is the total value of the crypto that users have deposited in the smart contractsSmart contractA program that runs on a blockchain and automatically carries out what it was written to do once certain conditions are met. of a particular DeFiDeFi (decentralised finance)Financial services, such as lending, saving and trading, that run on smart contracts on a blockchain instead of through a bank or other middleman. service. It is usually given in US dollars and is often used to compare the size of DeFi projects or entire blockchains.
How is TVL calculated?
The most widely used source is the analytics site DefiLlama. It adds up the value of all tokens held in each service's smart contracts, at current market prices. For a lending service, that includes what has been deposited as CollateralCollateralAn asset pledged as security for a loan. In DeFi, the collateral usually has to be worth more than the loan. or to lend out, and for a decentralised exchange, the tokens in its liquidity poolsLiquidity poolA shared pot of tokens held in a smart contract, which people trade against on decentralised exchanges. Those who fund it earn a share of the fees.. Tokens that are not yet in circulation are left out.
What TVL doesn't tell you
- TVL moves with prices. If the price of ether falls by 30%, TVL drops sharply even though nobody has withdrawn anything. A rising TVL doesn't necessarily mean more people are using the service.
- The same money can be counted twice. Say someone puts ether into liquid stakingLiquid stakingStaking where you receive a token as a receipt for your stake. The token can be sold or used while the crypto itself stays locked., receives a token in return and then deposits that token as collateral with a lending service. The same money can then appear in the TVL of both services. DefiLlama lets users choose whether to include it when figures are added up.
- TVL says nothing about safety or profit. A service with a high TVL can still have bugs in its code. TVL can also be inflated by rewards paid in the service's own token.
So a TVL figure means most when you know when it was measured, where it comes from and what was included.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 18 October 2026.