What is TVL (Total Value Locked) in the context of #NaaS? How to assess a project objectively without the help of CTs?
0/10🧵
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1/ First, what does it do?
If you are looking to invest in a DeFi project, you can’t get away with assessing the following:
- Token price actions
- The vibe of the project
- The demand for its services/offerings
- How does it compare to others?
The TVL has you all covered
If you are looking to invest in a DeFi project, you can’t get away with assessing the following:
- Token price actions
- The vibe of the project
- The demand for its services/offerings
- How does it compare to others?
The TVL has you all covered
2/ What is TVL?
TVL is a term generally applied only to DeFi protocols. These protocols mostly run under a “passive income” theme, i.e. “give me some money first, and I will use it to make you more in return”. The money you gave/locked is likely to be your VL in the protocol.
TVL is a term generally applied only to DeFi protocols. These protocols mostly run under a “passive income” theme, i.e. “give me some money first, and I will use it to make you more in return”. The money you gave/locked is likely to be your VL in the protocol.
3/ TVL examples
- Staking: Stake tokens to earn rewards
- Lending collaterals: You end money to a lending protocol and earn interest
- LP farming: You supply LP tokens to a DEX or a farming protocol to earn txn fees or tokens
- Nodes: You buy a node to receive perpetual rewards
- Staking: Stake tokens to earn rewards
- Lending collaterals: You end money to a lending protocol and earn interest
- LP farming: You supply LP tokens to a DEX or a farming protocol to earn txn fees or tokens
- Nodes: You buy a node to receive perpetual rewards
4.1/ TVL in #NaaS
Among the above examples, nodes are different.
- You are able to “unlock” the money from the other three protocols, but normally can’t do this with #NaaS.
- Part of the money you “locked” is going to all the holders’ wallets
Among the above examples, nodes are different.
- You are able to “unlock” the money from the other three protocols, but normally can’t do this with #NaaS.
- Part of the money you “locked” is going to all the holders’ wallets
4.2/ TVL in nodes
- Once you purchase a node, the money is gone and distributed to different places, such as the rewards pool, swaps to stables for treasury investment, and team’s funds.
To investors, the money is “locked”, but to a project, it's technically "used".
- Once you purchase a node, the money is gone and distributed to different places, such as the rewards pool, swaps to stables for treasury investment, and team’s funds.
To investors, the money is “locked”, but to a project, it's technically "used".
5/ Why use TVL for assessing a #NaaS project?
TVL represents the total cost of all the nodes that have been created.
It is useful to see how performant and popular a project is, and it is nearly perfect for project comparisons.
TVL represents the total cost of all the nodes that have been created.
It is useful to see how performant and popular a project is, and it is nearly perfect for project comparisons.
6/ Formula of TVL
For simplicity, TVL = The cost of creating each node X the total no. of nodes.
You see, both the price action and the node demand are factored in.
Note the formula can be more sophisticated by considering the token/reward distributions.
For simplicity, TVL = The cost of creating each node X the total no. of nodes.
You see, both the price action and the node demand are factored in.
Note the formula can be more sophisticated by considering the token/reward distributions.
7/ Four project signs represented by TVL change 
8/ Use TVL to rank the biggest #NaaS players
- $STRONG: $557M
- $THOR: $135M
- $FIRE: $104M
- $PXT: $30M
- $PLAYMATES: $26M
- $POWER: $20M
- $CUBO: $17M
- $ATLAS: $12M
- $MEAD: $11M
- $UNIV: $10M
(updated on Mar 21)
- $STRONG: $557M
- $THOR: $135M
- $FIRE: $104M
- $PXT: $30M
- $PLAYMATES: $26M
- $POWER: $20M
- $CUBO: $17M
- $ATLAS: $12M
- $MEAD: $11M
- $UNIV: $10M
(updated on Mar 21)
https://twitter.com/melbourne_dao/status/1505517634392973312
9.1/ What about other metrics
- MC/FDV: It can be misleading since the total supply is controllable by protocols.
- Treasury value: The benefits of the treasury for the holders can be minimal and slow sometimes. And bear in mind, not all treasury investments are successful.
- MC/FDV: It can be misleading since the total supply is controllable by protocols.
- Treasury value: The benefits of the treasury for the holders can be minimal and slow sometimes. And bear in mind, not all treasury investments are successful.
9.2/ What about other metrics
- The ratio of Treasury value / MC: not too useful for the same reasons above
- Price: Only one part of the story
- Nodes: Better than price imo, but again, only part of the story
- The ratio of Treasury value / MC: not too useful for the same reasons above
- Price: Only one part of the story
- Nodes: Better than price imo, but again, only part of the story
10.1/ Where to find TVL?
Only a few projects provide this on the dApps (shout out to $UNIV), others either require you to calculate or don’t provide enough info for this. I will try to update it on a regular basis, especially when there's a drastic change in the ranking.
Only a few projects provide this on the dApps (shout out to $UNIV), others either require you to calculate or don’t provide enough info for this. I will try to update it on a regular basis, especially when there's a drastic change in the ranking.
10.2/ Where to find TVL?
Fortunately, we are developing a NaaS aggregator site and will derive TVL from various sources. On top of it, the calculation will be an enhanced one considering the rewards/token distribution tailored for each project. So stay tuned.
Fortunately, we are developing a NaaS aggregator site and will derive TVL from various sources. On top of it, the calculation will be an enhanced one considering the rewards/token distribution tailored for each project. So stay tuned.
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