What is Total Value Locked (TVL)?

Total Value Locked (TVL) is a key metric used to measure the overall health and adoption of the Decentralized Finance (DeFi) ecosystem. It represents the total amount of assets (usually in USD value) that are currently deposited or "locked" into various DeFi protocols through activities like staking, lending, and liquidity provision in pools. A higher TVL generally suggests greater user trust, participation, and liquidity within the DeFi space, indicating growth and adoption. However, TVL can be influenced by asset price volatility and should be considered alongside other metrics for a complete picture.