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Total Value Locked (TVL)
What Is Total Value Locked (TVL)?
If you have been using DeFi tracking sites, the chances are high that you have run into total value locked (TVL) as a reference point. To put it simply, “total value locked” represents the number of assets that are currently being staked in a specific protocol: this value is not meant to represent the number of outstanding loans, but rather the total amount of underlying supply that is being secured by a specific application completely.
Total value locked is a metric that is used to measure the overall health of a DeFi protocol.
There are three main factors that are taken into consideration when calculating and looking at a decentralized financial services' market cap TVL ratio: calculating the supply, the maximum supply as well as the current price.
In order to get the current market cap, you need to multiply the circulating supply by the current price. In order to get to the TVL ratio, you would need to take that market cap number and divide it by the TVL of the service.
One of the main use of the TVL ratio is to help determine if a DeFi asset is undervalued or overvalued. If it is under 1, it is undervalued in most cases.
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Open Interest
Open interest refers to the total number of outstanding derivative contracts, specifically futures and options, that are held by market participants at the end of each trading session. |
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Black-Scholes Model
In simple terms, it is a mathematical formula that gives the fair price of stock options, allowing investors to calculate whether they are overvalued or undervalued. |
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Consensus Layer
The consensus layer is the backbone of any blockchain network, performing the vital role of facilitating agreement among nodes on the true state of the blockchain. |
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AI Coins
AI coins are designed to streamline AI-related transactions and interactions, all while upholding transparency and security through blockchain technology. |
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Leased Proof of Stake (LPoS)
Leased Proof of Stake (LPoS) is a consensus mechanism that allows cryptocurrency holders to lease their coins to nodes on a network. |