# Total value locked: what TVL measures and what it misses

Total value locked, or TVL, measures the value of assets counted within a protocol or system under a stated methodology. It can change because asset prices change even when no one deposits or withdraws. Provider definitions, receipt-token handling and category exclusions matter, so TVL is not a universal measure of safety, revenue or unique capital.

Evidence: [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions)

Canonical: https://degreesofsatoshi.com/encyclopedia/defi-tvl/
Published: 2026-10-02
Substantively modified: 2026-10-02
Independently verified by an automated reviewer: 2026-10-02T18:15:18.493Z
Data current through: 2026-10-02

AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied.

## Key facts

- **Valuation:** TVL combines asset quantities with prices. ([DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions))
- **Scope:** DefiLlama separates borrowed, staking and other categories under its methodology. ([DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions))
- **Overlap:** Receipt tokens deposited elsewhere can create double-counted exposure. ([DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions))

## A falling chart need not mean withdrawals

If a protocol holds 100 units of an asset priced at $2,000, its value is $200,000. If the price falls to $1,500 while the quantity stays unchanged, the value becomes $150,000 with no withdrawal.

Separate quantity changes and price changes before describing inflows or outflows.

Evidence: [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions)

## Read the provider’s inclusion rules

DefiLlama’s retrieved methodology excludes or separately tracks several categories, including borrowed coins and protocol-issued tokens in specified contexts. Other providers can use different definitions.

A displayed toggle for double-counted positions can materially change an aggregate. Keep the settings and observation time with any cited number.

Evidence: [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions)

## Capital exposure is not a security review

TVL can show that assets are exposed to a protocol, but does not inspect its admin keys, code or insolvency resilience. A large deposit base can coexist with concentrated dependencies.

Likewise, TVL is not trading volume or fees earned. Use separate metrics for deposits, activity and economic results.

Evidence: [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions)

## Questions

### Can I add every protocol’s TVL to measure unique DeFi capital?

Not safely without a consistent overlap policy. A receipt from one protocol can be deposited into another, causing the same underlying assets to appear in more than one position.

Evidence: [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions)

## Claims and scope

### defi-tvl-quick-answer

Total value locked, or TVL, measures the value of assets counted within a protocol or system under a stated methodology. It can change because asset prices change even when no one deposits or withdraws. Provider definitions, receipt-token handling and category exclusions matter, so TVL is not a universal measure of safety, revenue or unique capital.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

### defi-tvl-fact-valuation

Valuation: TVL combines asset quantities with prices.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

### defi-tvl-fact-scope

Scope: DefiLlama separates borrowed, staking and other categories under its methodology.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

### defi-tvl-fact-overlap

Overlap: Receipt tokens deposited elsewhere can create double-counted exposure.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

## Sources

- [DefiLlama: How we calculate TVL](https://docs.llama.fi/analysts/data-definitions) — DefiLlama. Provider-specific valuation scope and TVL methodology. Locator: Total Value Locked. Retrieved: 2026-10-02T17:03:46.209Z.

## Revision history

- 2026-10-02: First publication after primary-source research and independent automated verification.

## Cite this entry

Degrees of Satoshi editorial project. “Total value locked: what TVL measures and what it misses.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/defi-tvl/