MARKET INFRASTRUCTURE

Total Value Locked (TVL)

The aggregate value of assets deposited in a DeFi protocol, typically measured in USD equivalent. TVL serves as a proxy for protocol adoption, liquidity depth, and potential systemic risk if a platform is hacked or fails.

EXAMPLE

Aave's $12B in total value locked makes it the largest decentralized lending protocol, attracting institutional treasurers seeking on-chain yield opportunities with battle-tested smart contracts.

Relevant Roles and Functions

On-chain Role
Head of On-Chain Liquidity and Treasury
On-Chain Liquidity Strategist
Function
Blockchain-based Treasury Management
Digital Collateral
Settlement Funding across Networks
Stablecoin Liquidity
TradFi Equivalent
Central Banks
Clearinghouses
Payment Systems

Related Terms

Liquidity Pool

A smart contract that holds reserves of two or more assets, enabling decentralized trading, lending, or borrowing. Participants who deposit assets earn a share of fees proportional to their contribution.

Example

An institutional liquidity pool for tokenized government bonds enables real-time repo without requiring a central dealer to intermediate each trade.

Yield

The return generated from deploying digital assets—through on-chain lending, staking, liquidity provision, or holding yield-bearing tokenized instruments such as tokenized money market funds.

Example

Superstate's tokenized Treasury fund delivers T-bill yield directly on-chain, allowing protocols to hold yield-bearing collateral rather than idle stablecoins.