On August 5, DeFi Llama announced on Twitter that it would automatically disable the double count function of DeFi protocols. This is the move made by this information site after the article exposing the Saber developer on Solana.
As reported by CoinCu, Ian Macalinao, the developer behind the AMM Saber protocol on Solana, has also built 11 other projects in this ecosystem using other anonymous identities. The purpose of Macalinao is to link the products into a closed loop and inflate the TVL value of these projects in particular and Solana in general.
This discovery has created a hot topic of discussion in the crypto community. Many argue that Ian Macalinao’s actions are wrong to hide his identity but also admit that the DeFi field is depending on TVL numbers to inflate each project.
Total Value Locked indicates the value of assets locked in each crypto project or an entire ecosystem. It compares DeFi or blockchain protocols with each other to see where the money is focusing and show the project’s popularity.
However, there is a problem that a coin that moves back and forth between protocols in an ecosystem can be counted repeatedly, creating a “double count.” This happens on most of the protocols in the ecosystems like Ethereum, Solana, Avalanche, Polygon, etc.
Following the change, the TVL metrics of protocols and blockchains on DeFi Llama have decreased slightly. Accordingly, the current Total Value Lock of Ethereum before removing the double count is $58.85 billion. After the update, it is only $40.67 billion. This shows that as much as 30.8% of TVL comes from a coin counted up to 2 times when moved between different protocols.
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Harold
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