Want to understand Market Cap/TVL Ratio

[Henri9009]

Hi all!

I understand what is the Market Cap.

I'm having a hard time finding information about what precisely means the TVL Ratio.

CoinGecko info: Ratio of market capitalization over total value locked of this asset. A ratio of more than 1.0 refers to its market cap being greater than its total value locked.

Can anybody explain me what it means? I don't fully understand.
When it's over 1, for instance, it's a bad sign or what?



Another question: why on CoinGecko sometimes there's that information (Market Cap/TVL Ratio), and sometimes not?



Thanks a lot!

[Zed0X]

I'm having a hard time finding information about what precisely means the TVL Ratio.

TVL refers to the fiat value (USD of other currencies) of tokens locked in a DeFi smart contract

CoinGecko info: Ratio of market capitalization over total value locked of this asset. A ratio of more than 1.0 refers to its market cap being greater than its total value locked.

Can anybody explain me what it means? I don't fully understand.

With the description of TVL above, you should know by now.

When it's over 1, for instance, it's a bad sign or what?

I cannot say if it's bad or good. It just means that the number of tokens on holders hand and on exchanges are more than those locked.

Another question: why on CoinGecko sometimes there's that information (Market Cap/TVL Ratio), and sometimes not?

That's because MC/TVL ratio only applies to DeFi related projects.

[Henri9009]

Thanks Zed0X!

So, "locked" means that? https://academy.binance.com/en/glossary/token-lockup [nofollow]

The owners cannot sell them in the moment?

[Zed0X]

~ The owners cannot sell them in the moment?

It's what locked exactly means.

They'll have to unlock/unfreeze/unstake or whatever term the platform uses in order to sell/move it again.