In decentralized finance (DeFi), Total Value Locked (TVL) is a widely-used metric that measures the amount of capital held in DeFi protocols. But just how useful is it? Is TVL really the best measure of success, or is it just another number that can be easily manipulated?

A heated debate unfolded this week on X, led by Viktor Bunin, a protocol specialist at Coinbase, and Anatoly Yakovenko, the co-founder of Solana, highlighting the ongoing divide between the Ethereum and Solana communities over how much TVL really matters.

TVL: Hard to Manipulate?

Bunin sparked the discussion on Wednesday by defending TVL as a metric that is much more difficult to fake compared to figures such as transaction counts or active addresses. “Too many people got psyopsed into thinking TVL doesn’t matter,” Bunin tweeted. “When in reality, it’s the only metric that is actually expensive to game once transaction fees drop,” he added, explaining that while other metrics such as transaction volume or active wallets can be cheaply inflated by bots, artificially boosting TVL requires moving significant amounts of capital. 

For Bunin, TVL stands out because it requires actual capital to be deposited in DeFi protocols. “TVL means it’s deployed in DeFi protocols for trading, lending, borrowing, perps, etc. This means it’s productive capital,” he explained.

Yakovenko, on the other hand, challenged this reliance on TVL. From his perspective, TVL is only useful if the capital is generating actual economic value in the form of fees or revenue.

He argued that the focus should be on metrics like earnings, revenues, or transaction volumes that reflect real usage. “If it’s not making someone a profit, it’s not economically relevant,” Yakovenko insisted.

Bunin countered by pointing out that revenue can also be manipulated, explaining that large transactions could be structured in a way so as to artificially inflate revenue metrics. “You can get a whale to deposit $10 million, pay 100% in fees, [and] make it appear the protocol is generating $10 million in revenue, but then just pass the funds back to the whale in a side channel,” Bunin noted. In his view, while revenue might seem like a more dynamic metric, it’s still prone to manipulation, whereas TVL requires a sustained capital commitment, making it a more trustworthy measure of success.

Thomas Mattimore, head of platform at Reserve, agreed with Bunin’s argument that TVL is harder to fake than other metrics. “TVL a clear demonstration of trust,” Mattimore tweeted, supporting the idea that committing capital into DeFi protocols represents real commitment from users.

Mattimore believes that in a world where bot-generated transactions can inflate active user counts or transaction volume, TVL stands out as a metric that is much harder to game at scale.

Kyle Samani, co-founder of Multicoin Capital and a well-known Solana advocate, took Yakovenko’s side in the debate, arguing that TVL is more about supply than demand and doesn’t fully capture the health of a protocol. “TVL is very gameable, and is fundamentally a measure of supply, not demand,” Samani tweeted, implying that real economic activity—transactions, fees, and earnings—are more important indicators of DeFi’s growth. He pointed out that even protocols with relatively low TVL can generate significant activity and value.

Read more: SOL on Course to Flip ETH, Says Multicoin Capital’s Kyle Samani

The Numbers Behind the Debate

Looking at the numbers, Ethereum’s dominance in TVL remains undisputed. Ethereum leads all protocols with $45 billion in TVL, followed by Tron at $7.6 billion and Solana with $5.15 billion. But while Ethereum’s TVL represents a massive portion of the DeFi space, Yakovenko and Samani argue that it doesn’t necessarily mean Ethereum is more efficient or generating more value.

Bunin pointed out the potential discrepancies between transaction counts and TVL, cautioning that when chains have high transaction volumes but low TVL, it could indicate that manipulation is taking place. “Notice which chains are doing numbers in users or TPS, but not in TVL. The bigger the gap, the more likely it’s fake,” Bunin warned. 

However, Yakovenko has repeatedly argued that having too much TVL can also be a red flag if the capital isn’t being put to use. He believes TVL should only reflect the amount necessary to support volume. “All the excess TVL is useless—it’s capital at risk doing nothing,” he noted in an interview last December on Unchained.