“Actual” Total Value Locked (TVL) in DeFi is 50% of Reported Value, says Analyst

The TVL is known as the cumulative number that is being utilized as staking towards any certain project. The metric is shown prominently in mainstream sites like DefiPulse.com

Damir Bandalo (tweet below), an investor and code developer in the space, the TVL is roughly 50% of the total estimates being shown publicly.

A lot of talk these days around the total value locked in DeFI.

However all of them count the same $ many times.

So I did my own calc to find out how much is actually locked in top 15 DeFi protocols.

Answer: $3.5bil. (compared to $6.7bil on @defipulse)

cc @devops199fan

1/n

— Damir Bandalo (@damirbandalo) August 16, 2020

Damir’s point revolves around the accuracy of the total count of TVL in the industry as a whole. He says if “you deposit ETH into @MakerDAO and mint DAI. Take the DAI and go to @CurveFinance and put it ino ycurve. Your $ can actually be counted 5 times.”

He then focuses on the fact that some DeFi tokens have usage, and thus cannot be qualified as “locked value.”

Second I wanted to remove all DeFi tokens which have value because the protocol has usage. I think that is value creation not value locked.

Example here is @synthetix_io. There is a lot of value created but it's not accurate to count both the synthetic tokens and SNX.

— Damir Bandalo (@damirbandalo) August 16, 2020

What do you think about this perspective?

Discuss below.