TVL at Krypto: New study reveals the real markets!

TVL at Krypto: New study reveals the real markets!

N/A - On June 11, 2025, the Algorand Foundation published a new study that contains a critical examination by Metrik Total Value Locked (TVL) in the cryptocurrency sector. According to the report by Algorand Foundation, this metric, which was originally regarded as an indicator of the stability and performance of cryptocurrencies in the Defi area, shows that it has no significant influence on the financial performance of a tokens. The analysis included over 300 cryptocurrencies, without Bitcoin and stable coins, and was under the direction of Dr. Matthew Brigida carried out.

The investigation shows that the TVL metric metric, which is often used as an indicator of credibility or increase in value, can actually mislead investors. To test the hypothesis, weekly portfolios were created that analyzed the performance of the tokens according to TVL. The results showed no abnormal returns, which questions the usefulness of TVL as an investment signal. This metric is still cited in crypto media, but platforms such as Messari, Artemis and Token Terminal to consider TVL as a secondary metric.

New approaches to evaluate crypto assets

In addition, Blockworks introduced the Metrik Rev (Real Economic Value), while community analysis tools such as Dune and L2Beat offer alternative approaches to TVL interpretation. These tools also use metrics such as Total Value Secured (TVS) to draw a clearer picture of the actual use and economic demand. Nansen, on the other hand, contextualizes the TVL metric by wallet behavior and smart Money flows, while Flipside Crypto emphasizes that the quality of the user is more important than the amount of the tvl.

dr. Brigida, who is also Chief Economist of the Algorand Foundation, emphasizes that the study through academic strict and real-time blockchain insights supports the role of Algorand in the development of the cryptom market. The data analysis shows that TVL portfolios can be explained by common cryptocurrency factors and that future work should focus more on better indicators for user engagement.

The current status of the Defi market

The TVL metric also shows the clear fluctuations in the defi sector. The total value of the crypto-assets stored in defi ecosystems rose from $ 1 billion in 2020 to over 116 billion USD in May 2025. This development is also reflected in the current defect statistics, which are said that 55.95 billion in defi platforms will be banned by January 2024, compared to only 9.1 billion in July 2020.

Bitcoin remains the dominant player in the defi area. Nevertheless, the returns of TVL-based portfolios are insignificant if they are adapted to the overall market performance. In addition, the use of defects in the USA and other countries such as Vietnam and Thailand is increasingly widespread, with more than 30 million users of Metamask, the leading defi pocket, use.