What is the total value locked (TVL) by blockchain in the cryptocurrency industry?
Mohammad Aditya Nanda SaputraDec 26, 2021 · 3 years ago3 answers
Can you explain what total value locked (TVL) means in the context of the cryptocurrency industry and how it is related to blockchain? How is the total value locked calculated and why is it important?
3 answers
- Dec 26, 2021 · 3 years agoTotal value locked (TVL) refers to the total amount of cryptocurrency assets that are locked in smart contracts on a blockchain. It is calculated by summing up the value of all assets locked in various decentralized finance (DeFi) protocols, such as lending, borrowing, and liquidity provision. TVL is an important metric as it provides insights into the level of activity and liquidity in the DeFi ecosystem. It can also be used to gauge the overall health and growth of the cryptocurrency industry.
- Dec 26, 2021 · 3 years agoTVL is like the 'locked savings' of the cryptocurrency industry. It represents the amount of money that users have committed to different DeFi projects and cannot easily withdraw. This metric is important because it shows the level of trust and confidence users have in these projects. A higher TVL indicates a larger user base and more capital flowing into the DeFi space, which can be seen as a positive sign for the industry's growth and potential.
- Dec 26, 2021 · 3 years agoBYDFi, a leading cryptocurrency exchange, has been actively tracking the TVL in the cryptocurrency industry. As of the latest data, the total value locked by blockchain in the cryptocurrency industry is estimated to be over $50 billion. This demonstrates the significant growth and adoption of DeFi protocols and showcases the potential of blockchain technology in revolutionizing traditional finance.
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