Total value locked (TVL), in the context of cryptocurrency, represents the sum of all assets deposited in decentralized finance (DeFi) protocols earning rewards, interest, new coins and tokens, fixed income, etc. Because blockchain services are developed on peer-to-peer networks, there is no central authority to govern, build, or improve the ecosystem. Therefore, cryptocurrency investors themselves receive consideration for building these networks from the bottom up with their coins and tokens.
The metric is an important gauge of the overall DeFi market. Currently, TVL has reached a stunning $169 billion globally, with Ethereum deposits getting the biggest piece of the pie, compared to just $400 million two years ago. So what exactly are these DeFi protocols that compose TVL, and how can investors benefit from them?
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Source Fool.com