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ᴛ ◒ ꜱ ʏ ɴ Profile picture
@0xTosyn
Jan 13, 2023 • 9 tweets • 2 min read • Read on X
Day 12 of 31 days crypto/defi terminologies challenge

TVL- Total Value Locked

The Importance of TVL in the course of defi research cannot be overemphasized

A short thread🧵
Total Value Locked(TVL): is the overall value of crypto assets deposited in a decentralized finance (DeFi) protocol generally

TVL includes all the coins deposited in all of the functions that DeFi protocols offer, including:

- Staking
- Lending
- Liquidity pools
-Importantly, it doesn't reflect the yield these deposits are expected to earn.

It only means the current value of the deposits themselves

Does TVL change over time?

Yes, it does, and here is why;
A project’s TVL doesn't only change when users make new deposits or withdraw their assets.

It is constantly changing in line with the fluctuating dollar value of all those assets in the cryptocurrency market.
Why does TVL matter in defi

For defi platforms to function, they require capital to be deposited as loan collateral or liquidity in trading pools, which requires that it be locked up.

During your research, when the TVL of a defi protocol increases.
An increase in liquidity, popularity, and usability follows it.

A higher TVL means more capital is locked in the defi protocol, with participants enjoying the considerable  benefit

A lower TVL means lower availability of money, also resulting in lower yields.
There are three main factors to be taken into consideration while Calculating TVL,

They are:
- The projects supply.
- Maximum circulating supply available.
- The current price.
• That's all for today.
• Kindly follow @0xTosyn for more educational contents.

#happynewyear2023 #31daysofdefiterms

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More from @0xTosyn

ᴛ ◒ ꜱ ʏ ɴ Profile picture
Jan 29, 2023
Day 28 of 31 days crypto/Defi terminologies

Private sale vs. Publicsale

Some of these terms are really confusing especially trying to navigate all of these terms as a newbie

Do they mean the same thing?

A thread🧵
You get into a project's presale, whitelist spots are being hustled for, and Boom! You see some folks talking about participating in private sales😀

The confusion then set it.

What are public and private sales?
Both are all under a fundraising category, ICO, but they have different meanings.

Walk with me👇👇👇

✅️Private Sale

The ICO private sale period is the process in which tokens that are not yet announced to investors or open to the public are sold.
Read 11 tweets
ᴛ ◒ ꜱ ʏ ɴ Profile picture
Jan 28, 2023
Day 27 of 31 days crypto/Defi terminologies

IDO-Initial Dex Offering

What are IDOs?

How does it work, and how do investors benefit or profit from it?

A thread🧵
We have many offerings in the crypto/Defi space, the IDOs, the IEOs, the ICOs, and others, but this tweet would be limited to IDOs.

But then, there's something peculiar with these terms, which is the offering.
Offering in this context is a form of fundraising for Defi projects, but they are done through different means.

✅What are IDOs

Initial Dex Offering is simply launching a project, token, or coin
Via a Decentralized liquidity exchange.
Read 13 tweets
ᴛ ◒ ꜱ ʏ ɴ Profile picture
Jan 27, 2023
Day 26 of 31 days of crypto/Defi terminologies

Yield Aggregator

What are yield aggregators, and how do they operate?

A thread 🧵
Yield aggregators are also called auto compounders or yield optimizers, and they play a crucial role in the yield economy by combining  different  defi protocols
and strategies to maximize investors' profit.
Let me explain what I mean by this, just like how these ponzi sites promised returns on investment. Then these resources are pulled together and invested in different businesses, as the case may be, and then returns are distributed to these guys based on the agreement made.
Read 11 tweets
ᴛ ◒ ꜱ ʏ ɴ Profile picture
Jan 23, 2023
Day 22 of 31 days of crypto/Defi terminologies

Tokenomics

A big part of a crypto project's success can be attributed to its tokenomics.

But what does the term "Tokenomics" mean?

A thread🧵
In layperson’s terms, Tokenomics, put separately, is token Economics, which is the Economics of Tokens.

This includes everything from a token’s supply and how it’s issued to things like what utility it has.
One thing that determines market prices in the short run is demand and supply.

Then understanding the factors that will impact either supply or demand is vital to speculators and investors.
Read 11 tweets
ᴛ ◒ ꜱ ʏ ɴ Profile picture
Jan 21, 2023
Day 20 of 31 days crypto/defi terminologies

Smart contract

A Defi protocol can only be said to be complete when there is a smart contract deployment.

What really are smart contracts?

A short thread🧵
Smart contracts are tools that can automatically execute transactions if certain conditions are met without requiring the help of an intermediary company or entity.

What the smart contract does is cut that central body of authority.
It is more like the reason why decentralization is possible.
Whether it is obvious or not, intermediaries permeate our digital lives.

Even simply sharing a picture with friends online requires the services of an intermediary like Facebook or Twitter. .
Read 7 tweets
ᴛ ◒ ꜱ ʏ ɴ Profile picture
Jan 20, 2023
Day 19 of 31 days crypto/defi terminologies

Venture capitalist

Sometimes the term/title 'venture capitalist' is often misused by a lot of folks in the space

Who are venture capitalists?

A short thread🧵
Venture capitalists are known to be the prominent investors, the whales in the crypto/stock exchange market.

A venture capitalist (VC) is a private equity investor that provides capital to companies with high growth potential in exchange for an equity stake.
This could be funding startup ventures or supporting small companies that wish to expand but do not have access to equities markets.
Read 12 tweets

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