Recent research by Algorand challenges the long-held belief that Total Value Locked (TVL) is a reliable predictor of token performance in decentralized finance (DeFi). Traditionally, TVL has been viewed as a key indicator of success, with billions locked in projects signaling positive momentum. However, Algorand's study, led by economist Dr. Matt Brigida, questions this assumption. The research analyzed over 300 tokens, excluding Bitcoin and stablecoins, to determine if TVL could predict returns. The findings revealed that trading based on TVL does not provide an advantage, as any perceived performance differences disappear when broader market trends are considered. This suggests that high TVL figures do not necessarily indicate a token's true value or investment potential. The study calls for a reevaluation of metrics in the crypto space, emphasizing the importance of user activity and protocol-level revenue over mere capital locked. As the industry evolves, it highlights the need for a deeper understanding of what constitutes real value in DeFi. Read more AI-generated news on: https://app.chaingpt.org/news

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