What's your take on TVL when analyzing

[Crypt0Gore]

The higher the TVL the better they say.



So a friend came to my place today and we are discussing about the next big trends in crypto space for the next bull market and I asked how he is doing his own research on crypto projects and he mentioned TVL ( Total Vlaue Locked ) , he claimed that the higher the TVL the better for the project, this have got me wondering.

How true is this? Is there anyone using this method? Is it possible to fake TVL and deceive new investors so that they can invest just because the total amount locked is high? What's your take on this?

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[zasad@]

I use this service to analyze current large projects and see trends in the cryptocurrency market
https://defillama.com/

It is probably wrong to analyze a new project using the TVL indicator. Defi ecosystem must be time-tested.
https://bitcointalk.org/index.php?topic=5267124
Today the TVL of the project is 100 million dollars, and tomorrow it will be hacked.

[sunsilk]

I don't use that method or factor to determine if a project is going to be huge or not.

It's just the same with any other factors before in determining if a project is good or bad. So, let's say that TVL becomes the standard of most investors then the developers will just have to adopt it.

They'll focus more with the development for their increased TVL just to get the attraction of every investor that focuses with the TVL of a project whether they're good or bad projects.

[hd49728]

Total value locked is a most favorite indicator when people are doing their research about one project.

This figure presents some things: attraction of the project on investors and speculators by buying the token, lock it to get given APY and wait for the token growth as well as project developments. If the TVL is big, people can think that project is good and passed through some diligent research of many investors. They will have more belief in that project and can more easily spend money.

However, TVL does not guarantee security of that project. Fund is stored in vault can be hacked by hackers or be self hacked by founder, developer team members. We can not know about future.

Like FTX fiasco, do you really believe that FTX exchange was hacked shortly after it started to collapse?