Why we exclude minted stablecoin from tvl of a CDP/ Algostable protocol

[g1nt0ki]

When projects try list a CDP or algostable product, they sometimes include their minted stablecoin supply as tvl or staked tokens in stability pool under 'staking' field. But we exclude stablecoin value in both cases because we treat only the non-protocol related assets locked in the protocol as tvl.

For example, we count only the locked ETH in liquity as their tvl, the LUSD in their stability pool is ignored.

Sometimes, LP token with one side being the stablecoin is locked in the protocol, in these cases, we compute the value of stablecoin in the locked LP and subtract it from overall tvl. You can check our implementation of Maker or Frax for this.

[whankinsiv]

In my opinion this would be considered a double count because the collateral assets backing the CDP stable in theory have already been counted and have a greater value. CDP / Algo stables are a derivative product of the supplied collateral. If a CDP / algo stable is deposited into a different protocol it is fair to count it as TVL because there are no other assets already being counted on behalf of those tokens.