Public interest in total value locked started with the rise of DeFi in summer 2020. Total value locked is one of the most important metrics in the DeFi ecosystem. It represents the overall health and interest in the DeFi market. Investors are very often comparing TVL of different DeFi protocols to find undervalued DeFi projects they can invest in.
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What does Total Value Locked (TVL) mean?
Total value locked is the number of assets deposited in the Decentralized Finance (DeFi) protocols. It represents all the liquidity in the DeFi market. The higher the TVL number, the better and safer the protocol is.
What are the leading DeFi protocols?
Curve Finance (CRV) is currently the leading DeFi protocol with a $22.9 billion value locked, according to Defi Llama. Curve is followed by Convex Finance (CVX), MakerDAO (MKR), and AAVE. Leader’s dominance is less than 10% which suggests that the total value locked is well balanced across multiple protocols in the DeFi.
What are the leading DeFi chains?
Ethereum is taking up more than 60% of the whole DeFi ecosystem. Ethereum has by far the most protocols on its network but it is worth mentioning that other chains are starting to grow. Until 2021, Ethereum had more than 95% dominance. Many new chains entered the market since then and are developing their DeFi ecosystem. Binance Smart Chain is taking second place, and Terra is the third biggest chain by total value locked.
What is current TVL in DeFi?
Currently, the total value locked in DeFi is $233 billion. It is growing unstoppably. This time last year it was around $25 billion. It grew almost 10x just in the last year.
How much room there is still to grow?
Matthew Roszak, crypto investor and co-founder of the DeFi platform Vesper recently forecasted that the total value locked could break $800 billion by the end of 2022. That suggests that DeFi is still in its infancy phase. Roszak believes that the government’s influence will be key for growing the industry.