TVL
Total Value Locked. The sum of all assets currently deposited in a protocol's smart contracts. TVL is the standard measure of how much capital a DeFi or DeAI protocol is custodying.
Also known as: Total Value Locked
TVL is the headline number every DeFi and DeAI protocol gets measured by. It counts all the assets users have deposited into the protocol’s smart contracts: collateral in lending markets, liquidity in AMM pools, staked tokens in staking contracts, deposits in yield vaults. The number is denominated in USD and tracked by sites like DeFiLlama in real time. A protocol with $1B TVL is custodying a lot more capital than one with $10M TVL, which usually correlates with more activity, more revenue, and more credibility.
The honest caveats are significant. TVL is sensitive to token prices: if a protocol holds $500M worth of a token and that token doubles in price, TVL goes to $1B without any new deposits. The growth looks impressive but reflects market beta rather than user adoption. TVL is also gameable: protocols can incentivise deposits with token rewards that exceed the actual yield, which inflates the headline number with capital that would leave instantly if the rewards stopped. Bridge-deposited assets sometimes get double-counted across the source and destination chains.
The most useful TVL framing is the ratio to market cap. A protocol with $500M TVL and $50M market cap is undervalued relative to the trust it’s been given. A protocol with $50M TVL and $500M market cap has the opposite problem. Neither ratio alone is decisive but extreme values in either direction are worth investigating. NEAR’s TVL/market cap ratio is one of the things OYM flagged as a credibility question in its review: a chain with 46M monthly users and only $111M TVL has a story to explain.
In DeAI specifically, TVL matters less than in DeFi because most DeAI projects don’t custody large sums of user assets. A decentralised inference network might process billions of dollars of value through API calls without locking any of it. The right metric for those projects is recurring revenue or volume rather than TVL. The OYM Returns Score’s Revenue Sustainability dimension uses whichever metric is appropriate for the project type rather than forcing TVL onto every review.