TVL (Total Value Locked)

Hi everyone !

I hear and see here and there lots of talks about TVL, liquidities, etc.
A good thing would be to exchange altogether about TVL definition per FunctionX understanding.

My understanding is the following :
TVL refers to a specific protocol value… “Overall TVL” would then refer to the sum of all protocol TVLs. For example, FX Swap offers a specific TVL for each pair Liquidity Pool. But Fxcore also offers a specific TVL, referring to all tokens locked for 21 days in staking. But really, what do we mean as TVL ? (locked for how long, how is it measured in FX ecosystem, etc.)

So per my capitalistic understanding, TVL is nothing but the value hold by “banks” or “individuals” at one point. How would that change from circulating value ?

And TVL and liquidities are also tightly linked to custodianship, especially on blockchains (where we think “decentralization”). I remind that 50% of YES to any proposal on FX are sufficient to change anything on the blockchain (even to potentially reset the blockchain). So, there are also conditions to be set before saying the TVL and liquidities are “valid”.

Eventually, for EVM contracts, there is also the issue of the ownership of the contracts, and the power given to these owners in the contracts. We thus need to make sure the owners/deployers of an EVM contract cannot change it unilaterally, because the TVL and associated liquidities could be reaffected unilaterally…

Looking forward to hearing your thoughts…



You can find more information regarding TVL details here: DefiLlama and our methodology - DeFi Llama. It is very comprehensive and has been used as the standard for most of the chains. The only difference between Defillama and Chain’s calculation is that native token staking (direct staking from the user to the validator node) is not counted. For example, direct ETH staking is not counted, but staking ETH from Lido is counted as Lido’s TVL, which is counted as TVL on Ethereum.

From my point of view, the easiest approach is for all the upcoming dapps to register themselves with Defillama, and we can refer to the TVL from there.

Regarding the circulating value, please elaborate more on your question. From my understanding, the circulating value (or market cap) is counted based on the total circulating token times the price (based on Price Oracle or Coingecko’s API). Only the circulating value counts as TVL.

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Hi @indra, and thanks for your answer !

I understood (surprisingly) that native tokens staking are not accounted for TVL.
However, would tokens staked using Baklava (stFX tokens) be accounted for ?

Thanks !

Based on my understanding, the vault on Baklava will be counted as TVL, it has same approach as Lido.