The Basics of TVL

Total Value Locked (TVL) can refer to the fiat value locked for trading on a Network, Decentralized Exchanged (DEX), or DEX Trading Pair.

In this case we'll be looking at the the Moon/ETH trading pair on SushiSwap.

• You should know the TVL of this pair consists of two parts; 50% ETH and 50% Moons.
  • Moon Value is determined by: value of ETH in pool/number of Moons in the Pool.
    

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Looking at the Moon/Eth Pool

Although the Moon/ETH pool had a runup of close to $1M TVL, it has never hit that number. The closest it got was around ~$990K near the middle of August after the Kraken listing and currently sits at ~$841K.

https://preview.redd.it/5rea3clr42rb1.png?628&format=png&auto=webp&s=449bc82b5f52e99061c36233fcdceb340e77ce59

There are currently 253.3 ETH and 1.492M Moons in liquidity.

https://preview.redd.it/hwg0tm9wa2rb1.png?431&format=png&auto=webp&s=bee2d37963e689e4b790d2b290b3ce21ee397869

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How could TVL Change

There are three ways that the Moon/ETH TVL can Increase.

1. Individuals adding Liquidity.
2. Individuals buying Moons using ETH (More ETH in the Pool).
3. The value of ETH increases with no other changes to Liquidity.

There are three ways that the Moon/ETH TVL can Decrease. (the opposite of above).

1. Individuals removing liquidity.
2. Individuals selling Moons into ETH (Less ETH in the Pool).
3. The value of ETH decreases with no other changes to liquidity.

Note #3 is strictly a hypothetical - The value of Moons will never change identically with changes in the value of ETH, as arbitrage trades on fiat Moon pairs from Kraken, CDC, MEXC, etc... will provide support/resistance to price changes brought about by changes in the value of ETH.

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If you have any questions regarding TVL or the Moon/ETH Trading Pair on SushiSwap please let me know, and I'll do my best to answer them.