TVL to Market Cap Ratio
Valuation metric comparing the value locked in a protocol to its token's market capitalization.
In-Depth Explanation
TVL/Market Cap shows how much deposited value each dollar of market cap 'backs.' A ratio >1 means more value is deposited than the protocol's market cap. This can indicate undervaluation or that TVL is mercenary (easily leaves). The ratio varies dramatically by protocol type—DEXs typically have higher TVL/MC than governance-focused protocols.
Related Terms
Total Value Locked
TVLThe total value of crypto assets deposited in a DeFi protocol or across all of DeFi.
Market Capitalization
Market CapThe total value of a token's circulating supply, calculated as price × circulating supply.
Capital Efficiency
A measure of how effectively deployed capital generates returns or supports activity.
More in Valuation
View all →Market Capitalization
Market CapThe total value of a token's circulating supply, calculated as price × circulating supply.
Fully Diluted Valuation
FDVThe theoretical market cap if all tokens (including locked, unvested, and unissued) were in circulation.
Price to Sales Ratio
P/SValuation metric comparing market cap (or FDV) to annualized revenue.
Price to Fees Ratio
P/FValuation metric comparing market cap (or FDV) to total fees generated, regardless of fee distribution.