Total Value Locked

The calculation reads contract balances and multiplies them by prices, which means the figure moves with prices even when no one deposits or withdraws a single unit. Double counting is routine rather than exceptional: a deposit that mints a receipt token which is then deposited elsewhere is counted twice, and liquid staking and restaking multiply the effect on the same underlying asset. It measures deposits, not usage, revenue, or safety, and a protocol can hold large deposits while generating almost no fees. Providers apply different inclusion rules for a protocol's own token, bridged assets, and staked balances, which is why the same protocol shows different figures on different dashboards.

Dalam praktik

A protocol whose deposits are mostly its own governance token will show a value locked figure that falls sharply when that token's price falls, with no withdrawal taking place.

Kesalahpahaman yang umum terjadi

Total value locked is not money locked away or a measure of health; it is a price-times-balance snapshot that can count the same underlying asset several times, and users can normally withdraw at will.