Beyond TVL: Why Polygon’s David Silverman Says It’s Time for a Smarter DeFi Metric
Total Value Locked (TVL) has long been the go-to headline metric in decentralized finance (DeFi), but according to David Silverman of Polygon Labs, it's time the industry looked deeper. In a recent interview with BeInCrypto, Silverman argued that while TVL gives a snapshot of on-chain assets, it fails to capture the full utility and real-world impact of those assets within a blockchain ecosystem.
Silverman, who serves as Senior Vice President of Strategic Product Initiatives at Polygon Labs, proposes an alternative: Chain-Aligned TVL (CAT)—a metric designed to better reflect the economic activity that truly supports a blockchain network.
TVL: A Misleading Measure of Blockchain Value?
TVL has become a cornerstone of DeFi reporting, often used to rank chains and projects based on the value of crypto assets locked within them. Ethereum, for example, currently dominates the landscape with a TVL exceeding $44 billion, according to April 2025 data from DefiLlama. Polygon, by comparison, holds around $760 million in locked assets.
But Silverman argues that these figures can be misleading. “Most people don’t really understand what TVL represents. It looks impressive in headlines but doesn’t say much about how assets are actually being used,” he said.
Simply put, assets sitting idle in wallets may inflate TVL without offering any tangible benefit to the network or its users.
Introducing Chain-Aligned TVL: A Smarter Approach
Chain-Aligned TVL focuses on the actual utility of assets, measuring only those that actively contribute to the ecosystem—either by earning yield, facilitating lending, or being deployed in productive protocols.
Silverman used the example of stablecoins like USDT. “If they’re just sitting in a wallet, they’re not helping anyone. But if that $1 million in USDT is on a lending protocol like Morpho and generating yield, then it’s creating value,” he explained.
This shift in focus—from passive asset presence to active economic contribution—is the foundation of CAT.
Why CAT Matters for Users and Developers
For users, CAT could become a valuable tool in identifying projects that offer real opportunities. Protocols with higher chain-aligned TVL are more likely to be backed by their native ecosystems, which may mean better incentives, smoother integrations, and more competitive interest rates.
“Users benefit through better access to high-yield opportunities, faster and cheaper transitions, and a more connected DeFi experience,” Silverman noted.
Developers, in turn, would have clearer direction on where to build, since chains will prioritize supporting projects that enhance their ecosystem health.
An Ecosystem-Wide Shift
The implications of CAT extend beyond individual protocols. Silverman highlighted that transaction fees alone aren’t a sustainable revenue model for most chains. Instead, fostering long-term engagement through aligned, productive assets offers a more durable growth strategy.
A case in point is Agora’s AUSD on Polygon. Unlike traditional stablecoins that often result in passive TVL, AUSD channels a portion of its yield back into the network, incentivizing protocols and rewarding active users—even when assets remain technically idle.
The Road Ahead: From Buzzwords to Meaningful Metrics
Despite its promise, CAT has yet to see widespread adoption. Shifting away from entrenched metrics like TVL will require industry-wide reeducation and a cultural shift in how value is measured.
Still, as DeFi matures, the limitations of TVL are becoming increasingly apparent. Metrics like Chain-Aligned TVL may soon find their place as the industry seeks deeper insights into the actual health and productivity of blockchain ecosystems.