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Algorand Foundation - Why TVL is a Poor Metric For Investment Decisions

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Manage episode 492349577 series 2537879
Content provided by Brave New Coin. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Brave New Coin or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.

Staci Warden is the Algorand Foundation CEO, and Dr. Matthew Brigida is Chief Economist at Algorand Foundation. In June, the Algorand Foundation’s tokenomics team released a new study questioning the assumption that TVL is a meaningful investment signal. Despite being widely cited as a proxy for legitimacy, the research found that TVL doesn’t correlate with token performance, even when adjusted for known distortions like double-counting.

Why you should listen

The team analyzed 300+ cryptocurrencies from 2023–2024, simulating weekly long/short strategies based on TVL rankings. The result? No outperformance, no alpha. And no meaningful insight once broader market movements are accounted for.

As Pew reported last year, most Americans still don’t trust crypto. If TVL continues to be used as a shorthand for credibility, that only adds noise. This paper adds to the growing push for better metrics in DeFi.

Algorand’s mission is to power a world where information has integrity and innovative ideas can scale. The Algorand Foundation supports Algorand’s rapidly growing ecosystem by providing a best-in-class developer environment, supporting key infrastructure and setting technical standards, offering comprehensive support to builders and entrepreneurs, and providing the framework for decentralized governance.

Supporting links

Stabull Finance

The TVL Study White Paper

The TVL Study Blog Post

Algorand

Andy on Twitter

Brave New Coin on Twitter

Brave New Coin

If you enjoyed the show please subscribe to the Crypto Conversation and give us a 5-star rating and a positive review in whatever podcast app you are using.

  continue reading

622 episodes

Artwork
iconShare
 
Manage episode 492349577 series 2537879
Content provided by Brave New Coin. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Brave New Coin or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.

Staci Warden is the Algorand Foundation CEO, and Dr. Matthew Brigida is Chief Economist at Algorand Foundation. In June, the Algorand Foundation’s tokenomics team released a new study questioning the assumption that TVL is a meaningful investment signal. Despite being widely cited as a proxy for legitimacy, the research found that TVL doesn’t correlate with token performance, even when adjusted for known distortions like double-counting.

Why you should listen

The team analyzed 300+ cryptocurrencies from 2023–2024, simulating weekly long/short strategies based on TVL rankings. The result? No outperformance, no alpha. And no meaningful insight once broader market movements are accounted for.

As Pew reported last year, most Americans still don’t trust crypto. If TVL continues to be used as a shorthand for credibility, that only adds noise. This paper adds to the growing push for better metrics in DeFi.

Algorand’s mission is to power a world where information has integrity and innovative ideas can scale. The Algorand Foundation supports Algorand’s rapidly growing ecosystem by providing a best-in-class developer environment, supporting key infrastructure and setting technical standards, offering comprehensive support to builders and entrepreneurs, and providing the framework for decentralized governance.

Supporting links

Stabull Finance

The TVL Study White Paper

The TVL Study Blog Post

Algorand

Andy on Twitter

Brave New Coin on Twitter

Brave New Coin

If you enjoyed the show please subscribe to the Crypto Conversation and give us a 5-star rating and a positive review in whatever podcast app you are using.

  continue reading

622 episodes

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