VECTOR_ANALYSIS // FINANCE
TVL (Total Value Locked)
NODE: TVL
VERIFICATION: PASSED
01_DEFINITION
Strict Definition
"A metric representing the total amount of assets currently deposited in a DeFi protocol's smart contracts."
Liability Check // Risk Analysis
The 'Vanity Metric' risk. High TVL does not equal safety. It can be easily 'inflated' through circular lending or temporary incentives, masking underlying liquidity issues.
Knowledge Context // Related Terms
Auditor NotesVS-AN-2026
Strategy Domain
"Use TVL as a measure of 'Protocol Adoption,' but never as the sole indicator of security or solvency."
Operations Standard
"Combine TVL analysis with 'Volatility Adjusted' metrics to understand the true liquid depth of a protocol."
Legal & Compliance
"Scrutinize TVL growth for signs of 'Wash Trading' or artificial inflation during due diligence."
DOCUMENT_ID: CW3-TVL-(TOTAL-VALUE-LOCKED)-2026
SCHEMA_VER: AEO_3.2
LAST_AUDIT: 1/8/2026
HASH: ZOVP7L
SCHEMA_VER: AEO_3.2
LAST_AUDIT: 1/8/2026
HASH: ZOVP7L