TVL reflects net collateral, not lending activity, Stani Kulechov argues

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TVL is insufficient for DeFi valuations

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Yaroslav Dmytrenko

24.05.2026

TVL reflects net collateral, not lending activity, Stani Kulechov argues — TVL is insufficient for DeFi valuations

Stani Kulechov, founder and chief executive officer (CEO) at Avara, cautions against relying on total value locked (TVL) as the primary metric to assess DeFi lending protocols.

He emphasizes that while TVL measures net collateral, it does not indicate lending activity. Illustrating his point, Kulechov compares Aave and SoFi at the end of 2025, noting that Aave recorded approximately $52 billion supplied and $22 billion in active loans.

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Earlier this year, Kulechov confirmed that WETH loan-to-value ratios on Aave were restored to pre-incident levels, allowing borrowing and swaps on all affected networks. In a separate update, he stated that Arbitrum-recovered funds were being moved to Aave LLC as part of the ongoing rsETH asset recovery process. These events follow continued scrutiny of risk and asset management on major DeFi protocols.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.

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