Analyzing TVL Data: Authenticity, Technical Background, and Industry Practices

The authenticity of TVL data has always been a hot topic of discussion in the industry. Some believe that certain projects may inflate their TVL by counting the same funds multiple times. However, from a technical perspective, this practice is not feasible. The UTXO model dictates that funds can only be locked once, so the same funds cannot be counted in the TVL of multiple projects simultaneously.

In fact, most projects will make their staking addresses public, and even if they don't, they can be traced through on-chain analysis. These addresses are not only for users but also for investors to verify the project's control. Therefore, the operation of TVL data mainly focuses on these public addresses.

Many projects collaborate with large investors to boost TVL by injecting funds. For large investors, project parties usually promise a certain rate of return. This practice is quite common in the DeFi space, whether in the Ethereum or Bitcoin ecosystems, with similar operations in both European and American as well as domestic projects. This model seems to be a win-win: project parties achieve good TVL data, large investors gain high returns, ultimately attracting more retail investors to participate.

Taking a certain project as an example, it uses a common MPC wallet multi-signature model. Large holders do indeed transfer funds to the project's MPC wallet address, but the funds are managed jointly by the large holders and the project team. The MPC wallet achieves multi-party collaboration through multiple private key shards, ensuring that no single party can unilaterally access the funds. From an external perspective, these addresses belong to the project team, but the project team does not have complete control over the funds in those addresses.

This introduces the concept of "fake TVL". It is important to clarify that "fake TVL" does not refer to data falsification, but rather that this capital is actually static, cannot generate real value, and is only used to attract subsequent investors and project promotion.

TVL can be divided into real TVL and fake TVL. Real TVL refers to liquidity that can be effectively utilized, such as funds in lending or trading platforms, which can enhance user experience; fake TVL, on the other hand, refers to idle, unused liquidity, typically seen in funds within staking projects.

For staking projects, TVL is not a suitable evaluation metric. A high TVL may just be "inflated", mainly used for display rather than actual operations. The industry has long placed too much emphasis on TVL, but not all TVL has substantial value.

As users and investors, we should pay attention to the core value of the project: can it solve actual problems for users? Can it generate positive cash flow to prove the viability of its business model? Projects that can truly create value for users and the industry are the ones worth关注.