Blog ·
Why TVL lies, and what to read instead
Every DEX dashboard leads with total value locked. It is easy to compute and easy to compare, and for constant-product pools it used to be a fair proxy for how much you could trade. Concentrated liquidity broke that. Liquidity providers now choose where their capital sits, and much of it can sit far from the price, where it earns nothing and absorbs nothing.
Take two pools with the same TVL. In one, most of the liquidity is placed in a narrow band around the current price; in the other it is spread across a wide range, or parked at prices the market left weeks ago. The first pool can take a large order with little slippage. The second cannot, and nothing on the TVL line tells you which is which.
Routers already know this; they simulate every swap. Everyone else is reading the wrong number. beepbewp is an attempt to publish the right one where contracts can reach it.