The post by 𝕏 user @tzedonn is a tactical guide for crypto founders who are considering “TVL deals” – arrangements where protocols pay or incentivize large depositors, market makers, or funds to bring total value locked (TVL) into their DeFi protocol. In the current market, many protocols use TVL deals as an alternative to or complement for traditional VC/token raises, often offering token incentives, fee rebates, or other deal structures in exchange for committed on-chain liquidity or deposits. The thread lays out how founders should evaluate whether such deals make sense, how to structure them, and the main pitfalls to avoid. Core themes include: first deciding whether the protocol genuinely needs rented TVL versus focusing on organic product–market fit and sustainable user demand; carefully modeling the unit economics of any TVL incentive (e.g., rewards vs. expected fee revenue and retention once incentives end); and treating TVL providers as sophisticated counterparties who negotiate hard on terms such as lockup, token price, downside protection, and governance rights. The guide emphasizes that poorly structured TVL deals can create artificial, mercenary liquidity, mislead other investors with inflated metrics, and leave protocols over-diluted or underperforming once incentives are withdrawn, so founders are urged to approach these deals with the same rigor they would apply to a major fundraising or strategic partnership.

AI-generated background, compiled from web sources — not editorial content.

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