As one of the major indicators for the valuation of public chains, Total Value Locked (TVL) measures the level of prosperity and the fundamentals of a public chain’s ecosystem, especially for public chains with extensive applications on DeFi. During the short bull market that has just ended, native public chain tokens differed from one another in terms of their performance in the secondary market. Even for public chains with moderate performance like BSC, the TVL rebounded after the May 19 crash. However, their token prices have been lower than those of other public chains (e.g. Solana) because the way TVL is calculated does not correctly reflect the actual TVL and capital flows. In fact, non-stablecoins constitute a significant proportion of TVL, and the prices of many non-stable assets are subject to market swings. This has led to a flawed evaluation method of “price analysis based on token prices”, and the right way to calculate the TVL trends should eliminate the impact of token prices movement. In this article, three TVL adjustment methods that exclude the impact of token prices are introduced. Some interesting analysis using the adjusted TVL is also provided. The data used by the research are the daily TVL statistics of the top 10 public chains (as per DeFiLlama’s TVL ranking) from February 3, 2021, to September 25, 2021, and the closing price of the corresponding tokens. Normal TVL Trends In terms of the TVL trend, the ...
