What is Total Value Locked (TVL)?

TVL represents the total amount of assets currently deposited in the protocol's smart contracts. For this pool, the TVL is $1,695,791, indicating the depth of available liquidity.

Is a high TVL better?

Generally, yes. A higher TVL implies more liquidity, which reduces price slippage for traders and suggests higher trust in the protocol's security.

Dashboard Protocols Chains Stability

Next to USDT Overview →

Polygon Compound V3

Market Depth Analysis

Protocol: Compound V3 | Asset: USDT

$1.70M

Total Value Locked

Liquidity Reserves

Relative Visualisation (Cap: $50M)
Status: Moderate Depth

Deep Dive Metrics

Raw TVL $1,695,791

Chain Dominance 1.234%

Est. Solvency Score 0.8/10

Whale Tolerance Threshold:
Recommended max deposit/withdrawal limit: $16,958 (approx. 1% of Pool). Exceeding this may trigger arbitrage bots.

Technical Market Report

1. Strategic Positioning

Current on-chain data signals that Compound V3 maintains a strategic foothold on the Polygon network. Commanding a dominance of 1.23%, this pool serves as a primary liquidity venue for the USDT asset class.

Analysing the capital allocation, the Total Value Locked (TVL) of $1,695,791 acts as a barometer for investor confidence. In the broader DeFi context, this level of capitalisation suggests a developing market structure.

2. Liquidity & Volatility Profile

Mid-cap liquidity levels suggest a balanced risk profile. The pool can handle day-to-day volume but requires caution during high-volatility events. The depth of the liquidity pool is directly correlated to the asset's ability to absorb shock without drastic price displacement. With a calculated "Volatility Buffer" rating of Moderate, the smart contract demonstrates varying resistance to market manipulation.

3. Capital Efficiency & Slippage

Monitor price impact on orders exceeding $8,479. For traders looking to enter or exit positions in USDT, understanding the price impact is vital for capital preservation. Below is a theoretical projection of price impact based on constant product market maker formulae relative to total TVL:

Trade Size	Est. Impact (Theoretical)	Risk Assessment
$1,000	0.0590%	Safe
$10,000	0.5897%	Moderate
$100,000	5.8970%	CRITICAL ALERT

*Note: Slippage values are theoretical estimates. Actual execution depends on routing paths and active order books.

TVL Education Guide

TVL as a Trust Indicator

Total Value Locked acts as a 'Solvency Score' in Decentralised Finance. High TVL generally correlates with verified smart contracts and high community trust, though it is not a guarantee of safety.

Impact on APY

There is often an inverse relationship between TVL and Yield. As more capital enters the pool to chase rewards, the APY is diluted among more participants, leading to rate compression over time.

Frequently Asked Questions

What happens if TVL drops suddenly? A sudden drop in TVL often indicates a "Bank Run" or a loss of confidence in the protocol. This usually leads to higher volatility and lower liquidity for remaining users.

Does TVL affect APY? Yes. In most yield farming scenarios, as TVL increases, the APY decreases because the fixed token rewards are shared among more participants (dilution).

Data Analysis by MooniTooki

Chief Data Architect @DeFiStar.io Follow on X for real-time alpha and risk updates.

Data sourced via internal indexer. Active Tracking: 04 Dec 2025, 11:04 UTC. Disclaimer: Data is for informational purposes only. Past performance does not guarantee future results. Terms of Service apply.