TVL is the standard size measure for DeFi. It sums everything sitting in a protocol's contracts — liquidity, collateral, staked assets — and converts it to a single currency, which makes protocols and whole chains roughly comparable.
Two distortions are worth holding in mind. Because it is priced at market, TVL rises and falls with the assets themselves even when not a single deposit changes, so a chart of TVL through a rally partly just repeats the price chart. And the same capital can be counted more than once when a receipt token from one protocol is deposited into another, which inflates the figure across an ecosystem.
Does rising TVL mean a protocol is growing?
Not necessarily. TVL is denominated in fiat, so it climbs when the deposited assets appreciate even if no new capital arrived. Comparing TVL in token terms separates the two.
Last updated October 17, 2026