What is TVL and why is it important?
TVL represents the total value of cryptocurrency that is “locked”, or stored, in a DeFi application or smart contract. For most DeFi platforms, especially those related to lending or swaps, TVL is an important metric as it can directly affect the yields and usability of these applications for end users. For these applications in general, the higher the TVL, the better, as swaps will be more efficient and lending markets can more effectively supply liquidity to borrowers.
What does high TVL indicate ?
TVL can be thought of as a measure of liquidity and usability of a chain. It can’t be treated as a standalone metric like everything else but gives a directional sense. Higher TVL indicates it's activity against competitors .
Solana's TVL trend
FTM in comparison has a TVL of 412 million, even Kava which is barely in top 100 by mcap has a TVL of 175 million.
Does it rightly indicate the reduced activity of solana and an imminent downfall? What other metrics should be looked for comparison?
Let me know what you think?
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