Is Aave TVL Being Overestimated? 0xngmi Directly Refutes: The Data Isn’t as “Inflated” as You Think

0xngmi (Founder of DefiLlama) posted a response to the controversy: The claim that Aave’s TVL is overestimated due to circular lending is not true.
The core logic is actually very simple:
In TVL calculations, deposited assets are counted, but the borrowed portion is stripped out or offset—so even if there is circular lending, it won’t artificially inflate the total value locked.
He also added that DefiLlama has already handled the issue of duplicate counting caused by similar collateral loops like Ethena, and the current data has already been optimized to remove repeats.
In other words, the seemingly complex “tangled lending” doesn’t change the true scale of TVL.
In the crypto market, many disputes come from things that “seem reasonable,” but aren’t necessarily “logical” in reality.
Data doesn’t lie—so long as you truly understand how it’s calculated.
Don’t let appearances lead you by the nose. The depth of your understanding determines whether you’re seeing noise or an opportunity.