@fiery432
A project’s Total Value Locked (TVL) is a key indicator of ecosystem health, but it must come from genuine user activity rather than artificial inflation. TVL can be manipulated through wash trading, circular lending, or temporary incentives that attract “mercenary capital.” Sustainable TVL should reflect real users engaging with the protocol for its core services. Metrics like daily active users, transaction volume, and unique wallets can provide better insight into authenticity. Projects should prioritize organic growth strategies and transparent reporting. If TVL collapses as incentives are removed, it signals that the project lacks fundamental user demand and long-term viability.
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