The Token Suite deployed on Binance Smart Chain (BSC) on February 8, 2024.
6 weeks later, it claimed the Number 1 spot on BSC for all tokenization projects. Furthermore, the Token Suite is quickly climbing the ranking on Base, Ethereum, and the broader Tokenization Ecosystem.
This post describes the mechanics of how Brickken’s Total Value Locked (TVL) is calculated, its benefits and drawbacks.
TVL stands for Total Value Locked, which is a metric commonly used in the decentralized finance (DeFi) sector to measure the overall value of assets that are deposited in DeFi protocols.
This metric is indicative of the amount of money that is currently being staked, lent, or otherwise engaged within a DeFi ecosystem or specific DeFi project.
It's often used to gauge the size and health of DeFi projects or the sector as a whole, as a higher TVL suggests more user engagement and trust in the platform. TVL can be denominated in various currencies, such as USD, and can vary widely between different protocols based on their popularity, functionality, and the incentives they offer to users.
TVL is oftentimes measured in different ways depending on the infrastructure and functionalities of a protocol.
Brickken’s TVL is dependent on the Issuer tokenizing their assets using the Token Suite. Every time an Issuer deploys new tokenized Real World Assets (RWA), the token equivalent is created. What exactly is being tokenized, how much, and its value directly impacts the TVL.
To enforce transparency, the valuation is not set when the issuer is tokenizing their assets. Why? Because in theory, applying a self-perceived value of an asset can arbitrarily misrepresent the actual valuation and thus TVL generated within the Brickken Ecosystem.
Instead, the valuation is set according to market demand & dynamics. This means that a valuation of a particular asset, or token, is only set once a Token Offering has been successful since the market responds to a valuation set by the Issuer. Once the Token offering has been successful, Brickken is attributed a TVL of the Price of the asset multiplied by the distribution of the Token Offering + any pre-distribution to current/private stakeholders.
TL;DR:
Brickkens TVL is the cumulative value of each successful Real World Asset Token Offering times its minted supply.
Even though the tokens are created, no TVL is yet attributed to the Brickken Ecosystem as there is no way of verifying a valuation of the asset on-chain.
Result: Since the Offering was successful, the market validated the value of the rental property at $100 for 0.1% of the of Property.
Thus, $100 X 1.000 $RES = $100.000 is added as TVL created through the Brickken Ecosystem.
Unsuccessful offerings will not count towards the TVL as the valuation was not acknowledged by the market. This does not mean that the tokenized asset was without inherent value, just over-valued, unsuccessfully marketed to the public, or any other factor. However, the tokenized asset will not have a representation in the TVL number.
Private distribution, such as stock options to Employees, or simply tokenization and distribution of ownership to current investors, will not conduct a Token Offering. Therefore, no valuation can be set since the asset doesn't reach the open market. In such cases, the value of the asset will not count towards the TVL.
Brickken’s TVL is the sum of all tokenizations that engage with- and gets validated by the open market through a set valuation. This is done through the Token Offering feature in the Token Suite. If an offering is successful, the valuation is validated and the $ value X minted Tokens are attributed to the Brickken Ecosystem TVL.
This means that the public TVL will always be a smaller representative of the actual value, as there are assets whose full valuation are not validated by the market through various factors. There are also tokenizations done through Brickken for other reasons than for Public Offerings, such as private distributions or asset management.
This is why there is a discrepancy between the tokenized value sometimes mentioned by BRickken, and the TVL displayed by sources such as Defillama. Despite this, the chosen way of calculating TVL appears as the most transparent and fair way of representing the growth in Brickken’s Ecosystem.
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