DeFi TVL Quick Start Guide: Understanding Total Value Locked and Market Trends

What is DeFi TVL?

DeFi TVL (Total Value Locked) refers to the total value of assets locked in decentralized finance protocols.

This metric reflects the scale and market participation of DeFi protocols, usually measured in US dollars. Changes in TVL can help investors gauge market heat and the popularity of the protocol.

How to calculate TVL?

The calculation method for TVL is usually:

TVL = Lock-up Position × Current Asset Price

For example, if a certain DeFi protocol has a lock-up position of 1 million tokens, and the current price of each token is $10, then the TVL of the protocol is:

TVL = 1,000,000 × 10 = 10,000,000 USD

It is important to note that the calculation of TVL may be affected by factors such as double counting, so caution should be exercised when interpreting it.

How to interpret TVL data?

TVL data can help investors gauge the popularity of DeFi protocols and market trends.

For example, the rapid growth of TVL may indicate an increase in the attractiveness of the protocol and higher user engagement; while a decline in TVL may suggest capital outflows or a decrease in market interest.

However, TVL is just one metric for measuring the scale of DeFi protocols. Investors should also consider other factors when making decisions, such as the security of the protocol, the background of the team, and the activity level of the community.

2025 DeFi TVL Market Trend

In 2025, the DeFi market presents the following key trends:

• Market Recovery: The TVL of the DeFi market has reached a three-year high, indicating signs of recovery in the market.
• Ethereum’s Dominance: Ethereum continues to dominate the DeFi market, with other Layer 1 chains such as Solana and Avalanche also rising.
• Protocol performance differentiation: The TVL growth rates of different DeFi protocols vary, and investors should pay attention to the outstanding protocols.

These trends indicate that the DeFi market is gradually recovering its vitality, and investors should pay attention to market dynamics to seize investment opportunities.

Conclusion

DeFi TVL is an important indicator for measuring the scale of DeFi protocols and market trends. By understanding the meaning and calculation method of TVL, investors can better analyze the DeFi market and provide references for investment decisions.