Complete worth locked (TVL) is a broadly used metric to trace the recognition, adoption, and general well being of decentralized finance (DeFi) initiatives. Nevertheless, is it probably the most correct reflection of a sequence’s true worth? David Silverman, SVP of Strategic Product Initiatives at Polygon Labs, believes TVL is helpful for grabbing headlines however doesn’t present the total image.
In an unique interview with BeInCrypto, Silverman defined why TVL has its limitations. He additionally revealed how the Chain-Aligned TVL (CAT) may present a extra significant measure for the crypto ecosystem.
Why TVL Falls Quick as a Key DeFi Metric
Silverman acknowledged that TVL gives a common overview of the belongings held inside a protocol or chain. But, he argued that its importance and accuracy remain debatable.
“TVL primarily serves as a instrument for crafting headlines and offering a common overview of the worth held on a DeFi platform or a sequence, and most of the people don’t actually know what precisely this metric entails particularly. Saying that Ethereum has a TVL of $44.38 billion doesn’t actually imply a lot till you dig deeper into the specifics,” Silverman advised BeInCrypto.
In line with DefiLlama information, in April 2025, Ethereum (ETH) ranks the highest among all chains in terms of TVL, dominating greater than half of the market. In the meantime, Polygon’s (POL) TVL stands at $760.9 million, making it the thirteenth largest chain.
Though there have been developments in monitoring the TVL over time, Silverman believes a number of points persist. Thus, he advocated for what he calls a Chain-Aligned TVL.
In line with Silverman, the identify itself clearly differentiates it from conventional TVL. This metric focuses on the active use of assets rather than their mere presence on the chain.
“Figuring out how a lot USDC or USDT is on a sequence could make for good headlines, but when these tokens are simply gathering mud in a pockets and don’t contribute to something, do they actually add any worth to the ecosystem?” he questioned.
For example his level, he emphasised that holding $1 million worth of USDT in Morpho is arguably much more helpful for the chain, its customers, and the ecosystem. Why? As a result of on the platform, it earns a yield and helps develop the chain’s TVL by extending credit score.
“That is the primary concept of Chain-Aligned TVL, which is the entire worth of belongings that straight assist and strengthen their underlying chain, whether or not held natively or inside aligned protocols,” Silverman disclosed to BeInCrypto.
Moreover, he mentioned, the aim is to affiliate CAT with initiatives that really add worth to their communities.
Maximizing DeFi Potential: How Chain-Aligned TVL Advantages Customers
The Polygon executive also outlined the benefits Chain-Aligned TVL brings to customers. He defined that CAT’s nuanced approach of gauging a sequence’s worth may also help customers discover better yield opportunities.
“Chains will naturally need to promote initiatives that profit them and their ecosystems, so they’re extra prone to promote initiatives with greater chain-aligned TVLs, making it simpler for customers to find high-yielding alternatives,” he famous.
Silverman pressured that focusing on CAT can drive the event of more practical and user-friendly purposes. The underlying chain will prioritize well-integrated initiatives helpful to its ecosystem.
“Advantages to customers embody issues like simpler/cheaper/sooner transitions and higher DeFi alternatives,” he claimed.
Moreover, CAT-driven initiatives might supply higher rates of interest and supply extra partaking experiences in areas like games and non-fungible tokens (NFTs), as builders are incentivized to reinforce ecosystem engagement.
The advantages aren’t restricted to customers solely. Slightly, it may even have optimistic implications for whole blockchains.
“CAT is a metric that every one chains can leverage and profit from to get a greater understanding of the place their improvement efforts needs to be centered,” Silverman revealed to BeInCrypto.
He identified that transaction fees alone are not always a sustainable enterprise mannequin for chains. In line with Silverman, the main focus on CAT helps deliver long-term worth to a sequence and its ecosystem past simply short-term transaction income.
In the meantime, to showcase Chain-Aligned TVL in motion, Silverman cited Agora’s AUSD deployment on Polygon for example.
“Whereas different stables might have massive quantities of idle TVL, the issuer and the issuer alone advantages from this not the chain and never the customers. With AUSD, a portion of the yield generated from reserves is emitted on the chain as incentives serving to develop protocols, rewarding energetic customers and rising the chain’s economic system even when the belongings stay idle,” he highlighted.
Whereas Silverman presents a robust case for Chain-Aligned TVL, widespread adoption of this metric remains a challenge. TVL has dominated the DeFi space for years, turning into the usual by which initiatives are measured.
Shifting to a extra nuanced metric like CAT would require industry-wide training and a change in how each builders and customers consider blockchain worth.
Nevertheless, because the ecosystem matures and the necessity for extra correct assessments of chain well being grows, metrics like CAT may progressively achieve traction, providing a extra sustainable and significant option to measure a sequence’s true affect.
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