TVL explained in details.
A lot of us here at CT have been hearing about the abbreviation "TVL" a lot lately.
Today, I'll be breaking down what TVL actually is in a way a 10 year old can understand.
Sit back. A thread. 🧵
A lot of us here at CT have been hearing about the abbreviation "TVL" a lot lately.
Today, I'll be breaking down what TVL actually is in a way a 10 year old can understand.
Sit back. A thread. 🧵
A lot of us have been hearing about the term "TVL" so much lately.
Especially regarding some particular DeFi protocols.
First of all, I'll be explaining the term TVL and then, I'd go deep into protocols that are associated with this term.
Especially regarding some particular DeFi protocols.
First of all, I'll be explaining the term TVL and then, I'd go deep into protocols that are associated with this term.
Lastly, a tool we can use to check TVL of some of our favorite DeFi protocols.
TL;DR.
TL;DR.
TVL is an abbreviation.
As the name would suggest, Total Value Locked (TVL) is the aggregate amount of funds locked into a DeFi protocol. You could think of TVL as all the liquidity in the liquidity pools of a given money marketplace.
As the name would suggest, Total Value Locked (TVL) is the aggregate amount of funds locked into a DeFi protocol. You could think of TVL as all the liquidity in the liquidity pools of a given money marketplace.
For example, in @PancakeSwap PancakeSwap's case, TVL simply means the amount of funds deposited by liquidity providers to the protocol.
Liquidity providers are investors who stake their cryptocurrency tokens on DEXs to earn transaction fees, often referred to as liquidity mining or market making.
Their function is to facilitate trading in securities and other financial instruments by providing a pool of shares, (which they own), so that buyers and sellers can trade easily without having to locate and deal with other individual traders.
Total value locked (TVL) across all DeFi protocols is the sum of all staked crypto assets that are earning rewards, interest and so on.
TVL includes all the coins deposited in all of the functions that DeFi protocols offer, including:
• Staking
• Lending
• Liquidity pools
P.S - It doesn't reflect the yield that these deposits are expected to earn. It only means the current value of the deposits themselves.
• Staking
• Lending
• Liquidity pools
P.S - It doesn't reflect the yield that these deposits are expected to earn. It only means the current value of the deposits themselves.
Examples of DeFi protocols that their TVL is based on "Staking":
Uniswap @Uniswap for Ethereum Blockchain #ETH, PancakeSwap @PancakeSwap for BinanceSmartChain #BSC and Cronaswap @cronaswap for Cronos Chain.
Uniswap @Uniswap for Ethereum Blockchain #ETH, PancakeSwap @PancakeSwap for BinanceSmartChain #BSC and Cronaswap @cronaswap for Cronos Chain.
Examples of DeFi protocols that their TVL is based on "Lending":
Anchor protocol @anchor_protocol for Avalanche #AVAX and Terra Ecosystem #LUNA, AAVE @AaveAave for Ethereum #ETH, Avalanche #AVAX and Polygon Ecosystems #MATIC and Abracadabra.money @MIM_Spell for Fantom Eco.
Anchor protocol @anchor_protocol for Avalanche #AVAX and Terra Ecosystem #LUNA, AAVE @AaveAave for Ethereum #ETH, Avalanche #AVAX and Polygon Ecosystems #MATIC and Abracadabra.money @MIM_Spell for Fantom Eco.
Examples of DeFi protocols that their TVL is based on Liquidity pools:
SushiSwap @SushiSwap for multi chains, Trader Joe @traderjoe_xyz for Avalanche Ecosystem #AVAX and Quickswap @QuickswapDEX for Polygon Ecosystem #MATIC.
SushiSwap @SushiSwap for multi chains, Trader Joe @traderjoe_xyz for Avalanche Ecosystem #AVAX and Quickswap @QuickswapDEX for Polygon Ecosystem #MATIC.
Protocols can operate on just one network or spread themselves across many, in which case they have an independent TVL on each of the networks. The largest network by DeFi TVL is Ethereum, accounting for more than half of the total volume worldwide (55.1%)assets worth over $122b.
The combined TVL of all DeFi protocols grew exceptionally fast between 2020 and 2021. At the start of 2020, the combined TVL across all DeFi platforms was around $630 million, according to analytics firm DeFi Llama.
DeFi Llama @DefiLlama is my favorite tool in checking TVL of projects.
It is user-friendly, fast, precise, always up-to-date.
You can count on them round the clock for up-to-date data on TVL of projects, chains and even any category of your choice.
It is user-friendly, fast, precise, always up-to-date.
You can count on them round the clock for up-to-date data on TVL of projects, chains and even any category of your choice.
There's a way you can capitalize on this tool and make money off it. You just have to be strategically positioned and boom, you get in before others do and make a shit load of money when the FOMO has already set in and I guess
@TheEwansEffect talked a bout that in one of his many nice and educative threads.
Link below
Link below
https://twitter.com/TheEwansEffect/status/1511235086297051146?t=w7ndrZ2Amy-qMvNK0Tyu0g&s=19
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