Since DeFi Pulse popularized the metric in 2019, total value locked (TVL) has been used as a primary measure for a protocol’s success. 

But as DeFi slogged through a bear market for much of 2023, some pointed out that TVL can distort the underlying value of a protocol. Others said DeFi should abandon the metric altogether, saying it’s less meaningful than it’s purported to be.

“You bring ten whales and all of a sudden your TVL shoots through the roof,” Oleg Fomenko, co-founder of Sweat Economy, said. “We’re seeing a lot of projects fall into the same trap.”

A possible alternative metric could be revenue: the fees protocols collected minus the rewards they paid to…

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