What does Total Value Locked (TVL) mean in cryptocurrency?
Total Value Locked (TVL) refers to blockchains where essentially the asset that is locked is measured in US dollar value. And this measurement process is completed on a blockchain or decentralized application (dApp). And all these decentralized applications reveal an important indicator of investor and developer interest. It is very important for investors as well as it is different from centralized platform and it provides decentralized facility which gives some additional benefits to the customer and is similar to bank deposit for Decentralized Finance (DeFi) projects.
Simply put, Total Value Locked (TVL) is a metric similar to bank deposits for decentralized finance (DeFi) platform projects in the cryptocurrency sector. It is also a metric used in the cryptocurrency sector to determine the total US dollar value of digital assets locked or staked in a particular blockchain network through decentralized applications (dApps). Simply put, it is a metric system by which locked assets are measured in US dollars. Today these tasks are done through decentralized applications. An important point here is that the Total Belur An important point here is that the higher the Total Value Locked i.e. TVL for a project, the more secure and valuable the project is considered to be.
Cryptocurrency emerged in the digital currency market with the creation of Bitcoin. This digital currency was designed to be completely different from centralized currency and was designed as a peer-to-peer currency using digital ledger technology. Focused on being a replacement currency for the financial system until the arrival of Ethereum. During Parvati it allowed developers to build persistent dApps on its network. And it also has smart contract functionality. Currently, decentralized applications or dApps provide various digital financial services, such as lending, that do not rely on traditional financial intermediaries such as brokerages, exchanges or banks.
Currently in the banking system the process of a loan is a hassle and requires a long time. So a mortgage borrower makes a down payment with the lender to get access to the loan. And for that users must share the digital assets or tokens with the application in the same way. They have to share these assets or tokens with the application in the same way that a mortgage borrower makes a down payment with the lender. In cryptocurrency, these staked deposits are "locked" to that particular network. Where the entire asset is locked and it is denominated in USD. And through The term Total Value Locked is coined. And thus the term comes where used through decentralized applications. And there the entire assets are measured in US dollars.
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Nice of you to take the time to explain total value locked, that's an incredible topic, thanks for your effort
Currently Ethereum is number one in terms of most TVL Locked and our favorite Tron has risen to number 2.
Thanks for the detailed explanation about TVL Locked.
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