Defining Total Value Secured (TVS) In Decentralized Oracle Networks

Total Value Secured (TVS) in Oracle Protocols
Blockchain DeFi Total Value Locked (TVL)
The aggregate DeFi TVL on the Ethereum blockchain ranks #1 with $172B while Binance Smart Chain ranks #2 with $17B; (source)
Chainlink Total Value Secured (TVS)
Total Value Secured (TVS) by Chainlink Data Feeds as of writing; (source)

How Oracles Secure Value Within Hybrid Smart Contracts

Aave Chainlink Price Feeds
Aave money markets are secured by Chainlink Price Feeds; (source)

If a faulty oracle network can cause an application to lose user deposited funds, then a properly operated oracle network is securing that application’s TVL by protecting it against data manipulation and downtime.

Diving Into Total Value Locked (TVL)

  • Decentralized money markets: the total value of all tokens held in the protocol’s smart contracts. Effectively tracks total value of deposits minus the total value of borrows. Some trackers show just the total value of deposits, which arguably is a different metric than TVL.
  • Decentralized exchanges: the total value of all deposited tokens across all liquidity pools in an automated market maker (AMM) or on-chain order book based exchanges.
  • Decentralized stablecoins: the total value of tokens deposited as collateral to back minted stablecoins, but not the market value of the minted stablecoins. The minted tokens are counted as TVL within the other applications they are deposited into.
  • Synthetic asset platforms: the total value of tokens deposited as collateral to back synthetic tokens, but not the market value of minted tokens. The synthetic tokens are counted as TVL within the other applications they are deposited into.
  • Rebase tokens: the total value of tokens deposited as collateral to back rebase tokens, but not the market value of the rebase tokens. The rebase tokens are counted as TVL within the other applications they are deposited into.
  • Privacy Mixers: the total value of tokens deposited into the mixer’s smart contract.
  • Futures/Perpetuals: the total value of tokens deposited as collateral to back existing futures positions or available as liquidity, but not the value of leveraged positions themselves.
  • Options: the total value of tokens deposited as collateral or available as liquidity to back calls and puts, and not the value of the options positions themselves.
  • Payment channels/networks: the total value of tokens deposited in the payment network’s smart contracts as liquidity.
  • Yield aggregators: the total value of deposited tokens into the protocol plus yield generated. Effectively tracking the value of tokens users are able to withdraw from the protocol.
  • Insurance: the total value of tokens deposited as collateral into the protocol or available as liquidity to back insurance agreements, but not the value of all outstanding coverage policies.
  • Cross-chain token bridges: the total value of tokens locked in custody on all host blockchains, which back the wrapped token representations minted on other receiving chains. Wrapped tokens created by a bridge can be counted as TVL within the other applications they are deposited into.
  • Staking Pools: the total value of all tokens/coins deposited in the protocol plus earned yield from Proof of Stake blockchains. Any minted derivative claim token can be counted as TVL within other applications it’s deposited into.
  • Staking of an application’s native governance token. Such staking is typically used for governance and exposure to revenue cash flows, but not commonly used within the actual on-chain financial product offered to users. However, there is not a strong consensus on this and TVL trackers often include toggles to include/exclude this portion.
  • Assets within a protocol’s “pool2,” an automated market maker liquidity pool where one of the tokens is the protocol’s native token. Pool2’s are designed to increase native token liquidity but are most often separate from a protocol’s financial product and are commonly built on existing AMMs. The TVL in a pool2 is taken into account in the AMM protocol in which liquidity is deployed. TVL trackers often include toggles to include/exclude pool2 in the native token protocol’s TVL.
  • Native tokens held idly by a protocol’s DAO treasury. Such capital is usually not used directly within the protocol and often consists of minted but not yet issued tokens.
  • Off-chain collateral that backs on-chain tokens. For example, the fiat currency backing centralized stablecoins is collateral that inherently exists off-chain. Growth in centralized stablecoins is a different metric usually tracked by market capitalization (which should be 1:1 to off-chain collateral).

Diving Into Total Value Secured (TVS)

Beyond Data Delivery

Conclusion

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