From TVL to TVU: Web3 needs a new narrative

Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial. For the past several years, web3 has been dominated by one metric: Total Value Locked. Entire ecosystems have been valued, ranked, and rewarded based on how much capital they can silo within their smart contracts and bridges. However, while TVL has been an easy number to point to, it’s also led us down a narrow path that reinforces fragmentation, not freedom. I feel it’s time to shift the narrative. Web3 shouldn’t be about how much value is locked away on isolated chains; it should be about how much value is unlocked and made usable everywhere. The industry needs a new north star: Total Value Unlocked (TVU). The failure of TVL as a metric Some readers might argue that TVL is a necessary measure for assessing economic security and user trust. Others may contend that full interoperability increases systemic risk, especially given the growing frequency of cross-chain bridge exploits. While I agree that these risks must be addressed, they do not justify the continued fragmentation of the ecosystem. TVL incentivizes protocols to hoard assets through staking rewards, yield farming and native token lockups, creating liquidity silos, fragmented networks that are difficult and risky to bridge. Developers are pressured to align with specific ecosystems while users must navigate a fractured, complex landscape. Recent trends, such as the proliferation of Layer 2s (a Gemini Institutional Insights report noted how a new Ethereum L2 solution is launched roughly every 19 days) and application-specific chains have exacerbated this problem. Projects like Base and Blast are expanding Ethereum’s reach but are also reinforcing value lock-in. Meanwhile, interoperability promises, such as those made by Cosmos and Polkadot, have yet to fully solve cross-chain composability at scale. Introducing Total Value Unlocked Total Value Unlocked shifts the focus from isolation to accessibility. TVU is a measure of how much usable, verifiable, and interoperable value a blockchain ecosystem can unlock, not just on its own, but in concert with others. It’s about enabling liquidity, data, smart contracts, and infrastructure to be accessed universally, across all chains. This is what web3 urgently needs now: the ability to use the best applications, the most relevant data, and the deepest liquidity, regardless of where they originated. To make this possible, the ecosystem needs more than just cross-chain bridges. It requires a universal foundation for verifiability and interoperability, a settlement layer that validates data, transactions, and smart contracts across diverse environments. Unlocking value through universal verification Instead of relying on trust-based integrations, systems could use mathematical proofs to ensure correctness. Whether it’s a transaction from Ethereum (ETH), a smart contract execution on Solana (SOL), or an AI model inference on a Layer 3 network, a verifiable settlement layer would allow developers to verify once and use anywhere. This model allows liquidity from one chain to be deployed across others without losing integrity, while enabling smart contracts written in one language to be verified and referenced by another chain’s execution environment. Additionally, it allows AI models and off-chain computations to be cryptographically verified and made usable across applications and chains, ultimately bringing together off-chain knowledge and on-chain state under a single verifiable architecture. With TVU, we stop measuring how much value is trapped and start measuring how much is empowered. As more chains launch and as application-specific infrastructure continues to proliferate, the fragmentation of web3 will only accelerate in tandem. If we cannot share liquidity, contracts, or data easily across environments, user experience will remain fractured and mainstream adoption will stall. TVU offers a new framework for thinking about growth, prioritizing composability, reach, and usability over isolated numbers. It rewards developers who build interoperable systems, and it guides ecosystem architects to design infrastructure that connects rather than isolates. By focusing on TVU, and by developing a universal settlement and verification infrastructure, web3 can move beyond liquidity islands and toward a truly interconnected ecosystem. Grigore Roșu Grigore Roșu is the founder & CEO of Pi Squared. Grigore is a professor of computer science at the University of Illinois and a former NASA engineer, where he developed the K Framework—an open-source “Rosetta Stone” for programming language semantics. Grigore also founded Runtime Verification, now the leading formal verification company in web3. In 2023, he founded Pi Squared with a vision to solve fragmentation and trust limitations in today’s blockchain infrastructure. Source: https://crypto.news/from-tvl-to-tvu-web3-needs-a-new-narrative-opinion/