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

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. 

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The TVL Study White Paper

The TVL Study Blog Post

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