TVL measures the total value of funds committed to a market’s liquidity system. In prediction markets, this usually represents the value of assets locked in automated market maker pools or collateral backing open positions. The higher the TVL, the more liquidity the market has to absorb trades smoothly and maintain stable pricing.
Platforms such as Polymarket, Myriad, and certain Manifold experiments use smart-contract-based pools where traders deposit assets to provide liquidity. These deposits create a foundation that keeps markets active, reduces slippage, and enables real-time pricing even in volatile environments. Because TVL tracks how much capital is committed, it becomes one of the most reliable indicators of market health and depth within prediction markets data.
TVL often rises around major events, as traders allocate more capital to markets where new information is expected to drive meaningful probability changes.
TVL shows the strength and resilience of a prediction market. High TVL supports smoother price movement, stronger forecasts, and cleaner prediction markets data.
It determines how easily traders can execute positions without causing large price swings. High TVL absorbs big trades, reducing volatility and improving probability stability. Low TVL makes markets fragile, where even small trades create outsized moves. TVL helps analysts evaluate the quality and reliability of prediction markets data.
Markets with deeper liquidity produce smoother, more meaningful probability curves. When TVL is high, prices reflect real information rather than liquidity noise. This leads to more accurate forecasts and stronger prediction markets data. Conversely, low TVL creates jumpy pricing that complicates interpretation.
Analysts can identify which events attract serious interest, where capital concentrates, and when markets are vulnerable to manipulation or mispricing. Sudden spikes or drops in TVL may signal rising uncertainty, approaching information shocks, or shifting trader focus. These patterns help make prediction markets data more interpretable.
A Polymarket crypto-related market sees TVL surge a few days before a major protocol upgrade announcement. The rising capital indicates strong trader interest and improved liquidity, leading to more stable and reliable probability movements as traders position for the news.
Evaluating TVL requires accurate liquidity and pool-size data. FinFeed's Prediction Markets API provides detailed prediction markets data, allowing developers to analyze TVL trends, build liquidity dashboards, and study how capital depth affects forecasting performance.
