Total Value Locked (TVL)
The total capital deposited in a DeFi protocol, denominated in USD. A standard measure of protocol size.
Total Value Locked (TVL) is the aggregate value of all assets deposited into a DeFi protocol at a given moment, typically denominated in USD. It is the most commonly cited metric for protocol scale — analogous to assets under management (AUM) in traditional finance.
For onchain reinsurance protocols, TVL represents the capacity available to underwrite insurance and reinsurance risk. Higher TVL means greater capacity, which should in principle enable lower premiums and larger policies. However, TVL can be misleading if it includes leveraged positions (looping) that inflate the apparent capital base.
In the ILS market, TVL has a direct analogue in total limit deployed: the maximum loss exposure a set of reinsurance contracts could generate. Unlike traditional ILS, DeFi TVL is transparent and updated in real time via blockchain data — observable by anyone.
Example usage
“Ensuro's TVL reached $12m in mid-2025, representing the stablecoin capital available to underwrite parametric insurance policies across its risk pools.”
Frequently asked questions
What is Total Value Locked (TVL)?
The total capital deposited in a DeFi protocol, denominated in USD. A standard measure of protocol size. Total Value Locked (TVL) is the aggregate value of all assets deposited into a DeFi protocol at a given moment, typically denominated in USD. It is the most commonly cited metric for protocol scale — analogous to assets under management (AUM) in traditional finance.
How is Total Value Locked (TVL) used in practice?
Ensuro's TVL reached $12m in mid-2025, representing the stablecoin capital available to underwrite parametric insurance policies across its risk pools.
Related terms
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