Total value locked (TVL) is a commonly used metric to keep track of the popularity, acceptance and general health of decentralized financial (Defi) projects. However, is this the most accurate reflection of the actual value of a chain? David Silverman, SVP of strategic product initiatives at Polygon Labs, believes that TVL is useful for getting newspapers, but does not give the full picture.
In an exclusive interview with Beincrypto, Silverman explained why TVL has his limitations. He also revealed how the chain-entry TVL (CAT) could offer a more meaningful measure for the crypto ecosystem.
Why is it falling as an important Defi -Metriek
Silverman acknowledged that TVL provides a general overview of the assets held in a protocol or chain. Nevertheless, he argued that the importance and accuracy of it remain disputable.
“CVL serves primarily as a tool for making headlines and giving a general overview of the value that is held on a Defi platform or a chain, and most people do not really know what this metric in particular in particular entails. Saying that Ethereum has a TV of $ 44.38 billion does not mean much in the specifies.”
According to Defillama Data, Ethereum (ETH) arranges the highest of all chains in terms of TVL in April 2025, which dominates more than half of the market. In the meantime, Polygon’s (Pol) is TVL $ 760.9 million, making it the 13th largest chain.
TVL from block chains. Source: Defillama
Although there has been progress in the course of time to follow the TVL, Silverman believes that various problems persist. For example, he argued for what he calls a chain-entry TV.
According to Silverman, the name itself distinguishes it clearly from traditional TVL. This metric focuses on the active use of assets instead of their mere presence on the chain.
“Knowing how much USDC or USDT is on a chain can cause good headlines, but if those tokens simply collect dust in a wallet and do not contribute to anything, do they really add a value to the ecosystem?” He asked.
To illustrate his point, he emphasized that keeping $ 1 million at USDT in Morpho is demonstrably much cheaper for the chain, its users and the ecosystem. Why? Because it earns a yield on the platform and helps to grow the TVL of the chain by expanding credit.
“This is the most important idea of chain-entry TVL, the total value of assets that directly support and strengthen their underlying chain, whether it is held native or inside aligned protocols,” Silverman revealed to BeInCrypto.
Moreover, he said, the goal is to associate CAT with projects that really add value to their communities.
Maximize Defi-potential: how chain-Uitgelende TVL benefits users
The Polygon Executive also outlined the benefit chain-relieved TVL with users. He explained that the nuanced way of CAT to measure the value of a chain can help users find better yield options.
“Chains will of course want to promote projects that benefit them and their ecosystems, so they are more likely to promote projects with higher chain-relieved TVLs, making it easier for users to find high-task opportunities,” he noticed.
Silverman also emphasized that the focus on CAT can stimulate the development of more effective and user -friendly applications. The underlying chain will give priority to well -integrated projects that are favorable for its ecosystem.
“Advantages for users include things like simpler/cheaper/faster transitions and better Defi chances,” he claimed.
In addition, cat-driven projects can offer better interest rates and offer more fascinating experiences in areas such as games and non-fungal tokens (NFTs), because developers are encouraged to improve the involvement of ecosystem.
The benefits are not only limited to users. It can also have positive implications for entire block chains.
“Cat is a statistics that all chains can use and benefit from a better understanding of where their development efforts should be directed,” Silverman revealed to Beincrypto.
He pointed out that transaction costs are not always a sustainable business model for chains. According to Silverman, the Focus on CAT helps to offer the long -term value for a chain and its ecosystem, above only the income of the transaction in the short term.
In the meantime, to present chain-entry TVL in action, Silverman called Agora’s Ausd implementation on Polygon as an example.
“While other stables may have large quantities of TVL SVL, the issuer and the issuer only benefit from this not the chain and not from the users. With AUSD, part of the proceeds generated from reserves in the chain are emitted as incentives that help the protocols grow, the active users and the Activa remain.
While Silverman presents a strong argument for the chain-entry TVL, the widespread acceptance of this metric remains a challenge. TVL has been dominating the Defi space for years and is the standard with which projects are measured.
Switching to a more nuanced metric such as CAT will require industrial education and a change in the way in which both developers and users evaluate blockchain value.
However, as the ecosystem becomes mature and the need for more accurate assessments of chain health growth, statistics such as CAT can gradually get a grip and offer a more sustainable and meaningful way to measure the true impact of a chain.
