DeFi Explained — What Is TVL?

Increasingly, cryptocurrency investors are looking for on-chain indicators to evaluate projects. Total Value Locked, or TVL, has emerged as an important metric in evaluating the decentralized finance space. But what does TVL mean?

What Does TVL Stand For?

What Does TVL Measure?

TVL In Yield Farming

What Does It Mean When TVL Is Going Up?

What Will Cause Impermax’s TVL To Go Up?

Growth Attracts More Growth

This brings us to the third group of users who can drive TVL growth on Impermax: yield farmers. As borrowing rates are brought back to equilibrium from an increase in TVL, yield farmers will be more likely to farm IMX token due to the higher yields, thus leading to further increases in TVL. In this way, the prior simple assumption can be applied to Impermax as well: an increase in TVL on Impermax is attributable to increased popularity, usability, and liquidity.

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