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Crockboy
@crockboy
Wondering Why TVL Is High but Fees Are Low? Here's a Closer Look. If you've been watching DeFi protocols lately, you might’ve noticed a familiar pattern: TVL is soaring—tens or even hundreds of millions—yet protocol fees remain surprisingly low. It might seem inefficient at first glance, but in many cases, this is actually a sign that the protocol is laying the foundation for long-term growth. In the current market recovery phase, capturing liquidity is everything. Protocols are prioritizing trust, user base, and network effects over short-term revenue. Monetization isn’t the goal—not yet. That’s not a flaw, it’s a strategy. What’s more, when a significant chunk of the TVL consists of stablecoins, it sends a stronger signal. Stablecoin liquidity isn’t speculative—it’s patient capital. It reflects confidence in the protocol’s design and a belief in its future role in the on-chain economy.
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Crockboy pfp
Crockboy
@crockboy
Low fees usually point to one of two things: 1. The fee switch simply hasn’t been turned on yet, 2. Core functionality—trading, lending, or liquidations—hasn’t reached full traction. And that’s fine. It means things are just getting started. Liquidity that sticks around despite low yields isn’t chasing APR. It’s signaling trust in the team, the roadmap, and the token design. Eventually, when the protocol activates its economic levers—fee switches, buybacks, staking mechanics, treasury flows—those TVL numbers will start translating into real, sustainable revenue. Don’t just look at the numbers. Look at when, how, and why they’re being generated. That’s where the signal lies.
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