TVL (Total Value Locked)

TVL is calculated by summing the balance of each asset in a protocol's contracts and multiplying it by its market price. Because of that formula it is a doubly sensitive metric: it moves both with inflows and outflows of capital and with the price movement of the underlying assets. A rise in ETH lifts TVL even when no new capital arrives.

The metric carries known methodological nuances worth reading carefully. Double counting: the same ETH can appear as stETH in Lido and then as collateral in Aave, counted twice. And dependence on the price of the protocol's native token. The sector's reference aggregator for this data is DefiLlama.

It is the common indicator for comparing relative size and trust across protocols and chains, and a frequent input for DeFi analysis and rankings. TVL figures are perishable, so good practice is to always cite them with a date and source, or to explain the metric rather than fix a specific number that quickly goes stale.