The total value locked in decentralized finance, a measure that tracks the amount of assets committed to the DeFi ecosystem, has soared to $18 billion according to DeFi Pulse.
While the chart may suggest that DeFi adoption is growing, it requires some interpretation to be properly understood. Total value locked is often an imperfect metric in these scenarios. Differences in how it’s counted, protocols adopting measures to artificially boost it or just price rallies of the underlying assets can create the appearance of growth where there could be none.