diff --git a/polkadot/runtime/westend/src/lib.rs b/polkadot/runtime/westend/src/lib.rs
index 34f116eb9f04..6085b6e37455 100644
--- a/polkadot/runtime/westend/src/lib.rs
+++ b/polkadot/runtime/westend/src/lib.rs
@@ -1508,6 +1508,7 @@ pub mod migrations {
 		paras_registrar::migration::VersionCheckedMigrateToV1<Runtime, ()>,
 		pallet_nomination_pools::migration::versioned_migrations::V5toV6<Runtime>,
 		pallet_referenda::migration::v1::MigrateV0ToV1<Runtime, ()>,
+		pallet_nomination_pools::migration::versioned_migrations::V6ToV7<Runtime>,
 	);
 }
 
diff --git a/substrate/frame/nomination-pools/src/lib.rs b/substrate/frame/nomination-pools/src/lib.rs
index 2ec9b537d320..909a930e3821 100644
--- a/substrate/frame/nomination-pools/src/lib.rs
+++ b/substrate/frame/nomination-pools/src/lib.rs
@@ -538,6 +538,31 @@ impl<T: Config> PoolMember<T> {
 		}
 	}
 
+	/// Total balance of the member, both active and unbonding.
+	/// Doesn't mutate state.
+	#[cfg(any(feature = "try-runtime", feature = "fuzzing", test, debug_assertions))]
+	fn total_balance(&self) -> BalanceOf<T> {
+		let pool = BondedPool::<T>::get(self.pool_id).unwrap();
+		let active_balance = pool.points_to_balance(self.active_points());
+
+		let sub_pools = match SubPoolsStorage::<T>::get(self.pool_id) {
+			Some(sub_pools) => sub_pools,
+			None => return active_balance,
+		};
+
+		let unbonding_balance = self.unbonding_eras.iter().fold(
+			BalanceOf::<T>::zero(),
+			|accumulator, (era, unlocked_points)| {
+				// if the `SubPools::with_era` has already been merged into the
+				// `SubPools::no_era` use this pool instead.
+				let era_pool = sub_pools.with_era.get(era).unwrap_or(&sub_pools.no_era);
+				accumulator + (era_pool.point_to_balance(*unlocked_points))
+			},
+		);
+
+		active_balance + unbonding_balance
+	}
+
 	/// Total points of this member, both active and unbonding.
 	fn total_points(&self) -> BalanceOf<T> {
 		self.active_points().saturating_add(self.unbonding_points())
@@ -1189,11 +1214,11 @@ impl<T: Config> BondedPool<T> {
 		Ok(())
 	}
 
-	/// Bond exactly `amount` from `who`'s funds into this pool.
+	/// Bond exactly `amount` from `who`'s funds into this pool. Increases the [`TotalValueLocked`]
+	/// by `amount`.
 	///
-	/// If the bond type is `Create`, `Staking::bond` is called, and `who`
-	/// is allowed to be killed. Otherwise, `Staking::bond_extra` is called and `who`
-	/// cannot be killed.
+	/// If the bond is [`BondType::Create`], [`Staking::bond`] is called, and `who` is allowed to be
+	/// killed. Otherwise, [`Staking::bond_extra`] is called and `who` cannot be killed.
 	///
 	/// Returns `Ok(points_issues)`, `Err` otherwise.
 	fn try_bond_funds(
@@ -1224,6 +1249,9 @@ impl<T: Config> BondedPool<T> {
 			// found, we exit early.
 			BondType::Later => T::Staking::bond_extra(&bonded_account, amount)?,
 		}
+		TotalValueLocked::<T>::mutate(|tvl| {
+			tvl.saturating_accrue(amount);
+		});
 
 		Ok(points_issued)
 	}
@@ -1239,6 +1267,27 @@ impl<T: Config> BondedPool<T> {
 			});
 		};
 	}
+
+	/// Withdraw all the funds that are already unlocked from staking for the
+	/// [`BondedPool::bonded_account`].
+	///
+	/// Also reduces the [`TotalValueLocked`] by the difference of the
+	/// [`T::Staking::total_stake`] of the [`BondedPool::bonded_account`] that might occur by
+	/// [`T::Staking::withdraw_unbonded`].
+	///
+	/// Returns the result of [`T::Staking::withdraw_unbonded`]
+	fn withdraw_from_staking(&self, num_slashing_spans: u32) -> Result<bool, DispatchError> {
+		let bonded_account = self.bonded_account();
+
+		let prev_total = T::Staking::total_stake(&bonded_account.clone()).unwrap_or_default();
+		let outcome = T::Staking::withdraw_unbonded(bonded_account.clone(), num_slashing_spans);
+		let diff = prev_total
+			.defensive_saturating_sub(T::Staking::total_stake(&bonded_account).unwrap_or_default());
+		TotalValueLocked::<T>::mutate(|tvl| {
+			tvl.saturating_reduce(diff);
+		});
+		outcome
+	}
 }
 
 /// A reward pool.
@@ -1437,9 +1486,7 @@ impl<T: Config> UnbondPool<T> {
 	}
 
 	/// Dissolve some points from the unbonding pool, reducing the balance of the pool
-	/// proportionally.
-	///
-	/// This is the opposite of `issue`.
+	/// proportionally. This is the opposite of `issue`.
 	///
 	/// Returns the actual amount of `Balance` that was removed from the pool.
 	fn dissolve(&mut self, points: BalanceOf<T>) -> BalanceOf<T> {
@@ -1525,7 +1572,7 @@ pub mod pallet {
 	use sp_runtime::Perbill;
 
 	/// The current storage version.
-	const STORAGE_VERSION: StorageVersion = StorageVersion::new(6);
+	const STORAGE_VERSION: StorageVersion = StorageVersion::new(7);
 
 	#[pallet::pallet]
 	#[pallet::storage_version(STORAGE_VERSION)]
@@ -1602,6 +1649,14 @@ pub mod pallet {
 		type MaxUnbonding: Get<u32>;
 	}
 
+	/// The sum of funds across all pools.
+	///
+	/// This might be lower but never higher than the sum of `total_balance` of all [`PoolMembers`]
+	/// because calling `pool_withdraw_unbonded` might decrease the total stake of the pool's
+	/// `bonded_account` without adjusting the pallet-internal `UnbondingPool`'s.
+	#[pallet::storage]
+	pub type TotalValueLocked<T: Config> = StorageValue<_, BalanceOf<T>, ValueQuery>;
+
 	/// Minimum amount to bond to join a pool.
 	#[pallet::storage]
 	pub type MinJoinBond<T: Config> = StorageValue<_, BalanceOf<T>, ValueQuery>;
@@ -1825,9 +1880,9 @@ pub mod pallet {
 		CannotWithdrawAny,
 		/// The amount does not meet the minimum bond to either join or create a pool.
 		///
-		/// The depositor can never unbond to a value less than
-		/// `Pallet::depositor_min_bond`. The caller does not have nominating
-		/// permissions for the pool. Members can never unbond to a value below `MinJoinBond`.
+		/// The depositor can never unbond to a value less than `Pallet::depositor_min_bond`. The
+		/// caller does not have nominating permissions for the pool. Members can never unbond to a
+		/// value below `MinJoinBond`.
 		MinimumBondNotMet,
 		/// The transaction could not be executed due to overflow risk for the pool.
 		OverflowRisk,
@@ -2114,7 +2169,7 @@ pub mod pallet {
 
 		/// Call `withdraw_unbonded` for the pools account. This call can be made by any account.
 		///
-		/// This is useful if their are too many unlocking chunks to call `unbond`, and some
+		/// This is useful if there are too many unlocking chunks to call `unbond`, and some
 		/// can be cleared by withdrawing. In the case there are too many unlocking chunks, the user
 		/// would probably see an error like `NoMoreChunks` emitted from the staking system when
 		/// they attempt to unbond.
@@ -2127,10 +2182,12 @@ pub mod pallet {
 		) -> DispatchResult {
 			let _ = ensure_signed(origin)?;
 			let pool = BondedPool::<T>::get(pool_id).ok_or(Error::<T>::PoolNotFound)?;
+
 			// For now we only allow a pool to withdraw unbonded if its not destroying. If the pool
 			// is destroying then `withdraw_unbonded` can be used.
 			ensure!(pool.state != PoolState::Destroying, Error::<T>::NotDestroying);
-			T::Staking::withdraw_unbonded(pool.bonded_account(), num_slashing_spans)?;
+			pool.withdraw_from_staking(num_slashing_spans)?;
+
 			Ok(())
 		}
 
@@ -2180,9 +2237,8 @@ pub mod pallet {
 			ensure!(!withdrawn_points.is_empty(), Error::<T>::CannotWithdrawAny);
 
 			// Before calculating the `balance_to_unbond`, we call withdraw unbonded to ensure the
-			// `transferable_balance` is correct.
-			let stash_killed =
-				T::Staking::withdraw_unbonded(bonded_pool.bonded_account(), num_slashing_spans)?;
+			// `transferrable_balance` is correct.
+			let stash_killed = bonded_pool.withdraw_from_staking(num_slashing_spans)?;
 
 			// defensive-only: the depositor puts enough funds into the stash so that it will only
 			// be destroyed when they are leaving.
@@ -2846,12 +2902,9 @@ impl<T: Config> Pallet<T> {
 			},
 			(false, false) => {
 				// Equivalent to (current_points / current_balance) * new_funds
-				balance(
-					u256(current_points)
-						.saturating_mul(u256(new_funds))
-						// We check for zero above
-						.div(u256(current_balance)),
-				)
+				balance(u256(current_points).saturating_mul(u256(new_funds)))
+					// We check for zero above
+					.div(current_balance)
 			},
 		}
 	}
@@ -2871,9 +2924,12 @@ impl<T: Config> Pallet<T> {
 		}
 
 		// Equivalent of (current_balance / current_points) * points
-		balance(u256(current_balance).saturating_mul(u256(points)))
-			// We check for zero above
-			.div(current_points)
+		balance(
+			u256(current_balance)
+				.saturating_mul(u256(points))
+				// We check for zero above
+				.div(u256(current_points)),
+		)
 	}
 
 	/// If the member has some rewards, transfer a payout from the reward pool to the member.
@@ -3242,6 +3298,7 @@ impl<T: Config> Pallet<T> {
 		let mut pools_members = BTreeMap::<PoolId, u32>::new();
 		let mut pools_members_pending_rewards = BTreeMap::<PoolId, BalanceOf<T>>::new();
 		let mut all_members = 0u32;
+		let mut total_balance_members = Default::default();
 		PoolMembers::<T>::iter().try_for_each(|(_, d)| -> Result<(), TryRuntimeError> {
 			let bonded_pool = BondedPools::<T>::get(d.pool_id).unwrap();
 			ensure!(!d.total_points().is_zero(), "No member should have zero points");
@@ -3257,6 +3314,7 @@ impl<T: Config> Pallet<T> {
 				let pending_rewards = d.pending_rewards(current_rc).unwrap();
 				*pools_members_pending_rewards.entry(d.pool_id).or_default() += pending_rewards;
 			} // else this pool has been heavily slashed and cannot have any rewards anymore.
+			total_balance_members += d.total_balance();
 
 			Ok(())
 		})?;
@@ -3280,6 +3338,7 @@ impl<T: Config> Pallet<T> {
 			Ok(())
 		})?;
 
+		let mut expected_tvl: BalanceOf<T> = Default::default();
 		BondedPools::<T>::iter().try_for_each(|(id, inner)| -> Result<(), TryRuntimeError> {
 			let bonded_pool = BondedPool { id, inner };
 			ensure!(
@@ -3300,13 +3359,28 @@ impl<T: Config> Pallet<T> {
 				"depositor must always have MinCreateBond stake in the pool, except for when the \
 				pool is being destroyed and the depositor is the last member",
 			);
+
+			expected_tvl +=
+				T::Staking::total_stake(&bonded_pool.bonded_account()).unwrap_or_default();
+
 			Ok(())
 		})?;
+
 		ensure!(
 			MaxPoolMembers::<T>::get().map_or(true, |max| all_members <= max),
 			Error::<T>::MaxPoolMembers
 		);
 
+		ensure!(
+			TotalValueLocked::<T>::get() == expected_tvl,
+			"TVL deviates from the actual sum of funds of all Pools."
+		);
+
+		ensure!(
+			TotalValueLocked::<T>::get() <= total_balance_members,
+			"TVL must be equal to or less than the total balance of all PoolMembers."
+		);
+
 		if level <= 1 {
 			return Ok(())
 		}
@@ -3424,20 +3498,30 @@ impl<T: Config> Pallet<T> {
 }
 
 impl<T: Config> sp_staking::OnStakingUpdate<T::AccountId, BalanceOf<T>> for Pallet<T> {
+	/// Reduces the balances of the [`SubPools`], that belong to the pool involved in the
+	/// slash, to the amount that is defined in the `slashed_unlocking` field of
+	/// [`sp_staking::OnStakingUpdate::on_slash`]
+	///
+	/// Emits the `PoolsSlashed` event.
 	fn on_slash(
 		pool_account: &T::AccountId,
 		// Bonded balance is always read directly from staking, therefore we don't need to update
 		// anything here.
 		slashed_bonded: BalanceOf<T>,
 		slashed_unlocking: &BTreeMap<EraIndex, BalanceOf<T>>,
+		total_slashed: BalanceOf<T>,
 	) {
-		if let Some(pool_id) = ReversePoolIdLookup::<T>::get(pool_account) {
-			let mut sub_pools = match SubPoolsStorage::<T>::get(pool_id).defensive() {
-				Some(sub_pools) => sub_pools,
-				None => return,
-			};
-			for (era, slashed_balance) in slashed_unlocking.iter() {
-				if let Some(pool) = sub_pools.with_era.get_mut(era) {
+		let Some(pool_id) = ReversePoolIdLookup::<T>::get(pool_account) else { return };
+		// As the slashed account belongs to a `BondedPool` the `TotalValueLocked` decreases and
+		// an event is emitted.
+		TotalValueLocked::<T>::mutate(|tvl| {
+			tvl.defensive_saturating_reduce(total_slashed);
+		});
+
+		if let Some(mut sub_pools) = SubPoolsStorage::<T>::get(pool_id) {
+			// set the reduced balance for each of the `SubPools`
+			slashed_unlocking.iter().for_each(|(era, slashed_balance)| {
+				if let Some(pool) = sub_pools.with_era.get_mut(era).defensive() {
 					pool.balance = *slashed_balance;
 					Self::deposit_event(Event::<T>::UnbondingPoolSlashed {
 						era: *era,
@@ -3445,10 +3529,11 @@ impl<T: Config> sp_staking::OnStakingUpdate<T::AccountId, BalanceOf<T>> for Pall
 						balance: *slashed_balance,
 					});
 				}
-			}
-
-			Self::deposit_event(Event::<T>::PoolSlashed { pool_id, balance: slashed_bonded });
+			});
 			SubPoolsStorage::<T>::insert(pool_id, sub_pools);
+		} else if !slashed_unlocking.is_empty() {
+			defensive!("Expected SubPools were not found");
 		}
+		Self::deposit_event(Event::<T>::PoolSlashed { pool_id, balance: slashed_bonded });
 	}
 }
diff --git a/substrate/frame/nomination-pools/src/migration.rs b/substrate/frame/nomination-pools/src/migration.rs
index 606123daa9c6..eef2a976f1a2 100644
--- a/substrate/frame/nomination-pools/src/migration.rs
+++ b/substrate/frame/nomination-pools/src/migration.rs
@@ -27,6 +27,16 @@ use sp_runtime::TryRuntimeError;
 pub mod versioned_migrations {
 	use super::*;
 
+	/// Migration V6 to V7 wrapped in a [`frame_support::migrations::VersionedMigration`], ensuring
+	/// the migration is only performed when on-chain version is 6.
+	pub type V6ToV7<T> = frame_support::migrations::VersionedMigration<
+		6,
+		7,
+		v7::VersionUncheckedMigrateV6ToV7<T>,
+		crate::pallet::Pallet<T>,
+		<T as frame_system::Config>::DbWeight,
+	>;
+
 	/// Wrapper over `MigrateToV6` with convenience version checks.
 	pub type V5toV6<T> = frame_support::migrations::VersionedMigration<
 		5,
@@ -37,6 +47,83 @@ pub mod versioned_migrations {
 	>;
 }
 
+/// This migration accumulates and initializes the [`TotalValueLocked`] for all pools.
+///
+/// WARNING: This migration works under the assumption that the [`BondedPools`] cannot be inflated
+/// arbitrarily. Otherwise this migration could fail due to too high weight.
+mod v7 {
+	use super::*;
+
+	pub struct VersionUncheckedMigrateV6ToV7<T>(sp_std::marker::PhantomData<T>);
+	impl<T: Config> VersionUncheckedMigrateV6ToV7<T> {
+		fn calculate_tvl_by_total_stake() -> BalanceOf<T> {
+			BondedPools::<T>::iter()
+				.map(|(id, inner)| {
+					T::Staking::total_stake(
+						&BondedPool { id, inner: inner.clone() }.bonded_account(),
+					)
+					.unwrap_or_default()
+				})
+				.reduce(|acc, total_balance| acc + total_balance)
+				.unwrap_or_default()
+		}
+	}
+
+	impl<T: Config> OnRuntimeUpgrade for VersionUncheckedMigrateV6ToV7<T> {
+		fn on_runtime_upgrade() -> Weight {
+			let migrated = BondedPools::<T>::count();
+			// The TVL should be the sum of all the funds that are actively staked and in the
+			// unbonding process of the account of each pool.
+			let tvl: BalanceOf<T> = Self::calculate_tvl_by_total_stake();
+
+			TotalValueLocked::<T>::set(tvl);
+
+			log!(info, "Upgraded {} pools with a TVL of {:?}", migrated, tvl);
+
+			// reads: migrated * (BondedPools +  Staking::total_stake) + count + onchain
+			// version
+			//
+			// writes: current version + TVL
+			T::DbWeight::get().reads_writes(migrated.saturating_mul(2).saturating_add(2).into(), 2)
+		}
+
+		#[cfg(feature = "try-runtime")]
+		fn pre_upgrade() -> Result<Vec<u8>, TryRuntimeError> {
+			Ok(Vec::new())
+		}
+
+		#[cfg(feature = "try-runtime")]
+		fn post_upgrade(_data: Vec<u8>) -> Result<(), TryRuntimeError> {
+			// check that the `TotalValueLocked` written is actually the sum of `total_stake` of the
+			// `BondedPools``
+			let tvl: BalanceOf<T> = Self::calculate_tvl_by_total_stake();
+			ensure!(
+				TotalValueLocked::<T>::get() == tvl,
+				"TVL written is not equal to `Staking::total_stake` of all `BondedPools`."
+			);
+
+			// calculate the sum of `total_balance` of all `PoolMember` as the upper bound for the
+			// `TotalValueLocked`.
+			let total_balance_members: BalanceOf<T> = PoolMembers::<T>::iter()
+				.map(|(_, member)| member.total_balance())
+				.reduce(|acc, total_balance| acc + total_balance)
+				.unwrap_or_default();
+
+			ensure!(
+				TotalValueLocked::<T>::get() <= total_balance_members,
+				"TVL is greater than the balance of all PoolMembers."
+			);
+
+			ensure!(
+				Pallet::<T>::on_chain_storage_version() >= 7,
+				"nomination-pools::migration::v7: wrong storage version"
+			);
+
+			Ok(())
+		}
+	}
+}
+
 mod v6 {
 	use super::*;
 
diff --git a/substrate/frame/nomination-pools/src/mock.rs b/substrate/frame/nomination-pools/src/mock.rs
index 3884518a992b..d806ba071bd4 100644
--- a/substrate/frame/nomination-pools/src/mock.rs
+++ b/substrate/frame/nomination-pools/src/mock.rs
@@ -20,7 +20,7 @@ use crate::{self as pools};
 use frame_support::{assert_ok, parameter_types, traits::fungible::Mutate, PalletId};
 use frame_system::RawOrigin;
 use sp_runtime::{BuildStorage, FixedU128};
-use sp_staking::Stake;
+use sp_staking::{OnStakingUpdate, Stake};
 
 pub type BlockNumber = u64;
 pub type AccountId = u128;
@@ -46,7 +46,8 @@ parameter_types! {
 	pub static CurrentEra: EraIndex = 0;
 	pub static BondingDuration: EraIndex = 3;
 	pub storage BondedBalanceMap: BTreeMap<AccountId, Balance> = Default::default();
-	pub storage UnbondingBalanceMap: BTreeMap<AccountId, Balance> = Default::default();
+	// map from a user to a vec of eras and amounts being unlocked in each era.
+	pub storage UnbondingBalanceMap: BTreeMap<AccountId, Vec<(EraIndex, Balance)>> = Default::default();
 	#[derive(Clone, PartialEq)]
 	pub static MaxUnbonding: u32 = 8;
 	pub static StakingMinBond: Balance = 10;
@@ -60,6 +61,19 @@ impl StakingMock {
 		x.insert(who, bonded);
 		BondedBalanceMap::set(&x)
 	}
+	/// Mimics a slash towards a pool specified by `pool_id`.
+	/// This reduces the bonded balance of a pool by `amount` and calls [`Pools::on_slash`] to
+	/// enact changes in the nomination-pool pallet.
+	///
+	/// Does not modify any [`SubPools`] of the pool as [`Default::default`] is passed for
+	/// `slashed_unlocking`.
+	pub fn slash_by(pool_id: PoolId, amount: Balance) {
+		let acc = Pools::create_bonded_account(pool_id);
+		let bonded = BondedBalanceMap::get();
+		let pre_total = bonded.get(&acc).unwrap();
+		Self::set_bonded_balance(acc, pre_total - amount);
+		Pools::on_slash(&acc, pre_total - amount, &Default::default(), amount);
+	}
 }
 
 impl sp_staking::StakingInterface for StakingMock {
@@ -105,8 +119,11 @@ impl sp_staking::StakingInterface for StakingMock {
 		let mut x = BondedBalanceMap::get();
 		*x.get_mut(who).unwrap() = x.get_mut(who).unwrap().saturating_sub(amount);
 		BondedBalanceMap::set(&x);
+
+		let era = Self::current_era();
+		let unlocking_at = era + Self::bonding_duration();
 		let mut y = UnbondingBalanceMap::get();
-		*y.entry(*who).or_insert(Self::Balance::zero()) += amount;
+		y.entry(*who).or_insert(Default::default()).push((unlocking_at, amount));
 		UnbondingBalanceMap::set(&y);
 		Ok(())
 	}
@@ -116,11 +133,13 @@ impl sp_staking::StakingInterface for StakingMock {
 	}
 
 	fn withdraw_unbonded(who: Self::AccountId, _: u32) -> Result<bool, DispatchError> {
-		// Simulates removing unlocking chunks and only having the bonded balance locked
-		let mut x = UnbondingBalanceMap::get();
-		x.remove(&who);
-		UnbondingBalanceMap::set(&x);
+		let mut unbonding_map = UnbondingBalanceMap::get();
+		let staker_map = unbonding_map.get_mut(&who).ok_or("Nothing to unbond")?;
+
+		let current_era = Self::current_era();
+		staker_map.retain(|(unlocking_at, _amount)| *unlocking_at > current_era);
 
+		UnbondingBalanceMap::set(&unbonding_map);
 		Ok(UnbondingBalanceMap::get().is_empty() && BondedBalanceMap::get().is_empty())
 	}
 
@@ -144,14 +163,17 @@ impl sp_staking::StakingInterface for StakingMock {
 	}
 
 	fn stake(who: &Self::AccountId) -> Result<Stake<Balance>, DispatchError> {
-		match (
-			UnbondingBalanceMap::get().get(who).copied(),
-			BondedBalanceMap::get().get(who).copied(),
-		) {
+		match (UnbondingBalanceMap::get().get(who), BondedBalanceMap::get().get(who).copied()) {
 			(None, None) => Err(DispatchError::Other("balance not found")),
-			(Some(v), None) => Ok(Stake { total: v, active: 0 }),
+			(Some(v), None) => Ok(Stake {
+				total: v.into_iter().fold(0u128, |acc, &x| acc.saturating_add(x.1)),
+				active: 0,
+			}),
 			(None, Some(v)) => Ok(Stake { total: v, active: v }),
-			(Some(a), Some(b)) => Ok(Stake { total: a + b, active: b }),
+			(Some(a), Some(b)) => Ok(Stake {
+				total: a.into_iter().fold(0u128, |acc, &x| acc.saturating_add(x.1)) + b,
+				active: b,
+			}),
 		}
 	}
 
diff --git a/substrate/frame/nomination-pools/src/tests.rs b/substrate/frame/nomination-pools/src/tests.rs
index 67183e25689e..2749e89ecff3 100644
--- a/substrate/frame/nomination-pools/src/tests.rs
+++ b/substrate/frame/nomination-pools/src/tests.rs
@@ -59,6 +59,9 @@ fn test_setup_works() {
 		assert_eq!(StakingMock::bonding_duration(), 3);
 		assert!(Metadata::<T>::contains_key(1));
 
+		// initial member.
+		assert_eq!(TotalValueLocked::<T>::get(), 10);
+
 		let last_pool = LastPoolId::<Runtime>::get();
 		assert_eq!(
 			BondedPool::<Runtime>::get(last_pool).unwrap(),
@@ -218,10 +221,7 @@ mod bonded_pool {
 
 			// slash half of the pool's balance. expected result of `fn api_points_to_balance`
 			// to be 1/2 of the pool's balance.
-			StakingMock::set_bonded_balance(
-				default_bonded_account(),
-				Pools::depositor_min_bond() / 2,
-			);
+			StakingMock::slash_by(1, Pools::depositor_min_bond() / 2);
 			assert_eq!(Pallet::<Runtime>::api_points_to_balance(1, 10), 5);
 
 			// if pool does not exist, points to balance ratio is 0.
@@ -238,10 +238,7 @@ mod bonded_pool {
 
 			// slash half of the pool's balance. expect result of `fn api_balance_to_points`
 			// to be 2 * of the balance to add to the pool.
-			StakingMock::set_bonded_balance(
-				default_bonded_account(),
-				Pools::depositor_min_bond() / 2,
-			);
+			StakingMock::slash_by(1, Pools::depositor_min_bond() / 2);
 			assert_eq!(Pallet::<Runtime>::api_balance_to_points(1, 10), 20);
 
 			// if pool does not exist, balance to points ratio is 0.
@@ -637,12 +634,12 @@ mod join {
 			// Given
 			Currency::set_balance(&11, ExistentialDeposit::get() + 2);
 			assert!(!PoolMembers::<Runtime>::contains_key(11));
+			assert_eq!(TotalValueLocked::<T>::get(), 10);
 
 			// When
 			assert_ok!(Pools::join(RuntimeOrigin::signed(11), 2, 1));
 
 			// Then
-
 			assert_eq!(
 				pool_events_since_last_call(),
 				vec![
@@ -651,6 +648,7 @@ mod join {
 					Event::Bonded { member: 11, pool_id: 1, bonded: 2, joined: true },
 				]
 			);
+			assert_eq!(TotalValueLocked::<T>::get(), 12);
 
 			assert_eq!(
 				PoolMembers::<Runtime>::get(11).unwrap(),
@@ -660,7 +658,7 @@ mod join {
 
 			// Given
 			// The bonded balance is slashed in half
-			StakingMock::set_bonded_balance(Pools::create_bonded_account(1), 6);
+			StakingMock::slash_by(1, 6);
 
 			// And
 			Currency::set_balance(&12, ExistentialDeposit::get() + 12);
@@ -672,8 +670,12 @@ mod join {
 			// Then
 			assert_eq!(
 				pool_events_since_last_call(),
-				vec![Event::Bonded { member: 12, pool_id: 1, bonded: 12, joined: true }]
+				vec![
+					Event::PoolSlashed { pool_id: 1, balance: 6 },
+					Event::Bonded { member: 12, pool_id: 1, bonded: 12, joined: true }
+				]
 			);
+			assert_eq!(TotalValueLocked::<T>::get(), 18);
 
 			assert_eq!(
 				PoolMembers::<Runtime>::get(12).unwrap(),
@@ -2359,11 +2361,15 @@ mod unbond {
 			.min_join_bond(10)
 			.add_members(vec![(20, 20)])
 			.build_and_execute(|| {
+				assert_eq!(TotalValueLocked::<T>::get(), 30);
 				// can unbond to above limit
 				assert_ok!(Pools::unbond(RuntimeOrigin::signed(20), 20, 5));
 				assert_eq!(PoolMembers::<Runtime>::get(20).unwrap().active_points(), 15);
 				assert_eq!(PoolMembers::<Runtime>::get(20).unwrap().unbonding_points(), 5);
 
+				// tvl remains unchanged.
+				assert_eq!(TotalValueLocked::<T>::get(), 30);
+
 				// cannot go to below 10:
 				assert_noop!(
 					Pools::unbond(RuntimeOrigin::signed(20), 20, 10),
@@ -2669,8 +2675,9 @@ mod unbond {
 			.add_members(vec![(40, 40), (550, 550)])
 			.build_and_execute(|| {
 				let ed = Currency::minimum_balance();
-				// Given a slash from 600 -> 100
-				StakingMock::set_bonded_balance(default_bonded_account(), 100);
+				// Given a slash from 600 -> 500
+				StakingMock::slash_by(1, 500);
+
 				// and unclaimed rewards of 600.
 				Currency::set_balance(&default_reward_account(), ed + 600);
 
@@ -2702,8 +2709,9 @@ mod unbond {
 						Event::Bonded { member: 10, pool_id: 1, bonded: 10, joined: true },
 						Event::Bonded { member: 40, pool_id: 1, bonded: 40, joined: true },
 						Event::Bonded { member: 550, pool_id: 1, bonded: 550, joined: true },
+						Event::PoolSlashed { pool_id: 1, balance: 100 },
 						Event::PaidOut { member: 40, pool_id: 1, payout: 40 },
-						Event::Unbonded { member: 40, pool_id: 1, points: 6, balance: 6, era: 3 }
+						Event::Unbonded { member: 40, pool_id: 1, balance: 6, points: 6, era: 3 }
 					]
 				);
 
@@ -2863,6 +2871,7 @@ mod unbond {
 				);
 
 				// When the root kicks then its ok
+				// Account with ID 100 is kicked.
 				assert_ok!(Pools::fully_unbond(RuntimeOrigin::signed(900), 100));
 
 				assert_eq!(
@@ -2883,6 +2892,7 @@ mod unbond {
 				);
 
 				// When the bouncer kicks then its ok
+				// Account with ID 200 is kicked.
 				assert_ok!(Pools::fully_unbond(RuntimeOrigin::signed(902), 200));
 
 				assert_eq!(
@@ -2921,7 +2931,7 @@ mod unbond {
 				);
 				assert_eq!(
 					*UnbondingBalanceMap::get().get(&default_bonded_account()).unwrap(),
-					100 + 200
+					vec![(3, 100), (3, 200)],
 				);
 			});
 	}
@@ -3020,7 +3030,10 @@ mod unbond {
 				}
 			);
 			assert_eq!(StakingMock::active_stake(&default_bonded_account()).unwrap(), 0);
-			assert_eq!(*UnbondingBalanceMap::get().get(&default_bonded_account()).unwrap(), 10);
+			assert_eq!(
+				*UnbondingBalanceMap::get().get(&default_bonded_account()).unwrap(),
+				vec![(6, 10)]
+			);
 		});
 	}
 
@@ -3298,7 +3311,7 @@ mod unbond {
 			assert_eq!(PoolMembers::<Runtime>::get(10).unwrap().unbonding_points(), 0);
 
 			// slash the default pool
-			StakingMock::set_bonded_balance(Pools::create_bonded_account(1), 5);
+			StakingMock::slash_by(1, 5);
 
 			// cannot unbond even 7, because the value of shares is now less.
 			assert_noop!(
@@ -3368,21 +3381,58 @@ mod pool_withdraw_unbonded {
 
 	#[test]
 	fn pool_withdraw_unbonded_works() {
-		ExtBuilder::default().build_and_execute(|| {
-			// Given 10 unbonded directly against the pool account
-			assert_ok!(StakingMock::unbond(&default_bonded_account(), 5));
-			// and the pool account only has 10 balance
-			assert_eq!(StakingMock::active_stake(&default_bonded_account()), Ok(5));
-			assert_eq!(StakingMock::total_stake(&default_bonded_account()), Ok(10));
-			assert_eq!(Currency::free_balance(&default_bonded_account()), 10);
+		ExtBuilder::default().add_members(vec![(20, 10)]).build_and_execute(|| {
+			// Given 10 unbond'ed directly against the pool account
+
+			assert_ok!(Pools::unbond(RuntimeOrigin::signed(20), 20, 5));
+
+			assert_eq!(StakingMock::active_stake(&default_bonded_account()), Ok(15));
+			assert_eq!(StakingMock::total_stake(&default_bonded_account()), Ok(20));
+			assert_eq!(Balances::free_balance(&default_bonded_account()), 20);
 
 			// When
+			CurrentEra::set(StakingMock::current_era() + StakingMock::bonding_duration() + 1);
 			assert_ok!(Pools::pool_withdraw_unbonded(RuntimeOrigin::signed(10), 1, 0));
 
-			// Then there unbonding balance is no longer locked
-			assert_eq!(StakingMock::active_stake(&default_bonded_account()), Ok(5));
-			assert_eq!(StakingMock::total_stake(&default_bonded_account()), Ok(5));
-			assert_eq!(Currency::free_balance(&default_bonded_account()), 10);
+			// Then their unbonding balance is no longer locked
+			assert_eq!(StakingMock::active_stake(&default_bonded_account()), Ok(15));
+			assert_eq!(StakingMock::total_stake(&default_bonded_account()), Ok(15));
+			assert_eq!(Balances::free_balance(&default_bonded_account()), 20);
+		});
+	}
+	#[test]
+	fn pool_withdraw_unbonded_creates_tvl_diff() {
+		ExtBuilder::default().add_members(vec![(20, 10)]).build_and_execute(|| {
+			// Given 10 unbond'ed directly against the pool account
+			assert_ok!(Pools::unbond(RuntimeOrigin::signed(20), 20, 5));
+
+			assert_eq!(StakingMock::active_stake(&default_bonded_account()), Ok(15));
+			assert_eq!(StakingMock::total_stake(&default_bonded_account()), Ok(20));
+			assert_eq!(Balances::free_balance(&default_bonded_account()), 20);
+			assert_eq!(TotalValueLocked::<T>::get(), 20);
+
+			// When
+			CurrentEra::set(StakingMock::current_era() + StakingMock::bonding_duration() + 1);
+			assert_ok!(Pools::pool_withdraw_unbonded(RuntimeOrigin::signed(10), 1, 0));
+			assert_eq!(TotalValueLocked::<T>::get(), 15);
+
+			let member_balance = PoolMembers::<T>::iter()
+				.map(|(_, member)| member.total_balance())
+				.reduce(|acc, total_balance| acc + total_balance)
+				.unwrap_or_default();
+
+			// Then their unbonding balance is no longer locked
+			assert_eq!(StakingMock::active_stake(&default_bonded_account()), Ok(15));
+			assert_eq!(StakingMock::total_stake(&default_bonded_account()), Ok(15));
+			assert_eq!(Currency::free_balance(&default_bonded_account()), 20);
+
+			// The difference between TVL and member_balance is exactly the difference between
+			// `total_stake` and the `free_balance`.
+			// This relation is not guaranteed in the wild as arbitrary transfers towards
+			// `free_balance` can be made to the pool that are not accounted for.
+			let non_locked_balance = Balances::free_balance(&default_bonded_account()) -
+				StakingMock::total_stake(&default_bonded_account()).unwrap();
+			assert_eq!(member_balance, TotalValueLocked::<T>::get() + non_locked_balance);
 		});
 	}
 }
@@ -3412,24 +3462,33 @@ mod withdraw_unbonded {
 				let unbond_pool = sub_pools.with_era.get_mut(&3).unwrap();
 				// Sanity check
 				assert_eq!(*unbond_pool, UnbondPool { points: 550 + 40, balance: 550 + 40 });
+				assert_eq!(TotalValueLocked::<Runtime>::get(), 600);
 
 				// Simulate a slash to the pool with_era(current_era), decreasing the balance by
 				// half
 				{
 					unbond_pool.balance /= 2; // 295
 					SubPoolsStorage::<Runtime>::insert(1, sub_pools);
+
+					// Adjust the TVL for this non-api usage (direct sub-pool modification)
+					TotalValueLocked::<Runtime>::mutate(|x| *x -= 295);
+
 					// Update the equivalent of the unbonding chunks for the `StakingMock`
 					let mut x = UnbondingBalanceMap::get();
-					*x.get_mut(&default_bonded_account()).unwrap() /= 5;
+					x.get_mut(&default_bonded_account())
+						.unwrap()
+						.get_mut(current_era as usize)
+						.unwrap()
+						.1 /= 2;
 					UnbondingBalanceMap::set(&x);
+
 					Currency::set_balance(
 						&default_bonded_account(),
 						Currency::free_balance(&default_bonded_account()) / 2, // 300
 					);
-					StakingMock::set_bonded_balance(
-						default_bonded_account(),
-						StakingMock::active_stake(&default_bonded_account()).unwrap() / 2,
-					);
+					assert_eq!(StakingMock::active_stake(&default_bonded_account()).unwrap(), 10);
+					StakingMock::slash_by(1, 5);
+					assert_eq!(StakingMock::active_stake(&default_bonded_account()).unwrap(), 5);
 				};
 
 				// Advance the current_era to ensure all `with_era` pools will be merged into
@@ -3465,6 +3524,7 @@ mod withdraw_unbonded {
 							era: 3
 						},
 						Event::Unbonded { member: 40, pool_id: 1, points: 40, balance: 40, era: 3 },
+						Event::PoolSlashed { pool_id: 1, balance: 5 }
 					]
 				);
 				assert_eq!(
@@ -3552,7 +3612,7 @@ mod withdraw_unbonded {
 
 				// Given
 				// current bond is 600, we slash it all to 300.
-				StakingMock::set_bonded_balance(default_bonded_account(), 300);
+				StakingMock::slash_by(1, 300);
 				Currency::set_balance(&default_bonded_account(), 300);
 				assert_eq!(StakingMock::total_stake(&default_bonded_account()), Ok(300));
 
@@ -3572,6 +3632,7 @@ mod withdraw_unbonded {
 						Event::Bonded { member: 10, pool_id: 1, bonded: 10, joined: true },
 						Event::Bonded { member: 40, pool_id: 1, bonded: 40, joined: true },
 						Event::Bonded { member: 550, pool_id: 1, bonded: 550, joined: true },
+						Event::PoolSlashed { pool_id: 1, balance: 300 },
 						Event::Unbonded { member: 40, pool_id: 1, balance: 20, points: 20, era: 3 },
 						Event::Unbonded {
 							member: 550,
@@ -4051,6 +4112,7 @@ mod withdraw_unbonded {
 	#[test]
 	fn full_multi_step_withdrawing_non_depositor() {
 		ExtBuilder::default().add_members(vec![(100, 100)]).build_and_execute(|| {
+			assert_eq!(TotalValueLocked::<T>::get(), 110);
 			// given
 			assert_ok!(Pools::unbond(RuntimeOrigin::signed(100), 100, 75));
 			assert_eq!(
@@ -4058,6 +4120,9 @@ mod withdraw_unbonded {
 				member_unbonding_eras!(3 => 75)
 			);
 
+			// tvl unchanged.
+			assert_eq!(TotalValueLocked::<T>::get(), 110);
+
 			// progress one era and unbond the leftover.
 			CurrentEra::set(1);
 			assert_ok!(Pools::unbond(RuntimeOrigin::signed(100), 100, 25));
@@ -4070,6 +4135,8 @@ mod withdraw_unbonded {
 				Pools::withdraw_unbonded(RuntimeOrigin::signed(100), 100, 0),
 				Error::<Runtime>::CannotWithdrawAny
 			);
+			// tvl unchanged.
+			assert_eq!(TotalValueLocked::<T>::get(), 110);
 
 			// now the 75 should be free.
 			CurrentEra::set(3);
@@ -4089,6 +4156,8 @@ mod withdraw_unbonded {
 				PoolMembers::<Runtime>::get(100).unwrap().unbonding_eras,
 				member_unbonding_eras!(4 => 25)
 			);
+			// tvl updated
+			assert_eq!(TotalValueLocked::<T>::get(), 35);
 
 			// the 25 should be free now, and the member removed.
 			CurrentEra::set(4);
@@ -4398,6 +4467,7 @@ mod create {
 			let next_pool_stash = Pools::create_bonded_account(2);
 			let ed = Currency::minimum_balance();
 
+			assert_eq!(TotalValueLocked::<T>::get(), 10);
 			assert!(!BondedPools::<Runtime>::contains_key(2));
 			assert!(!RewardPools::<Runtime>::contains_key(2));
 			assert!(!PoolMembers::<Runtime>::contains_key(11));
@@ -4411,6 +4481,7 @@ mod create {
 				456,
 				789
 			));
+			assert_eq!(TotalValueLocked::<T>::get(), 10 + StakingMock::minimum_nominator_bond());
 
 			assert_eq!(Currency::free_balance(&11), 0);
 			assert_eq!(
@@ -4701,9 +4772,10 @@ mod set_state {
 
 			// Given
 			unsafe_set_state(1, PoolState::Open);
-			let mut bonded_pool = BondedPool::<Runtime>::get(1).unwrap();
-			bonded_pool.points = 100;
-			bonded_pool.put();
+			// slash the pool to the point that `max_points_to_balance` ratio is
+			// surpassed. Making this pool destroyable by anyone.
+			StakingMock::slash_by(1, 10);
+
 			// When
 			assert_ok!(Pools::set_state(RuntimeOrigin::signed(11), 1, PoolState::Destroying));
 			// Then
@@ -4729,6 +4801,7 @@ mod set_state {
 				pool_events_since_last_call(),
 				vec![
 					Event::StateChanged { pool_id: 1, new_state: PoolState::Destroying },
+					Event::PoolSlashed { pool_id: 1, balance: 0 },
 					Event::StateChanged { pool_id: 1, new_state: PoolState::Destroying },
 					Event::StateChanged { pool_id: 1, new_state: PoolState::Destroying }
 				]
@@ -4927,8 +5000,10 @@ mod bond_extra {
 			assert_eq!(PoolMembers::<Runtime>::get(10).unwrap().points, 10);
 			assert_eq!(PoolMembers::<Runtime>::get(20).unwrap().points, 20);
 			assert_eq!(BondedPools::<Runtime>::get(1).unwrap().points, 30);
+
 			assert_eq!(Currency::free_balance(&10), 35);
 			assert_eq!(Currency::free_balance(&20), 20);
+			assert_eq!(TotalValueLocked::<T>::get(), 30);
 
 			// when
 			assert_ok!(Pools::bond_extra(RuntimeOrigin::signed(10), BondExtra::Rewards));
@@ -4936,6 +5011,8 @@ mod bond_extra {
 
 			// then
 			assert_eq!(Currency::free_balance(&10), 35);
+			assert_eq!(TotalValueLocked::<T>::get(), 31);
+
 			// 10's share of the reward is 1/3, since they gave 10/30 of the total shares.
 			assert_eq!(PoolMembers::<Runtime>::get(10).unwrap().points, 10 + 1);
 			assert_eq!(BondedPools::<Runtime>::get(1).unwrap().points, 30 + 1);
@@ -4945,6 +5022,8 @@ mod bond_extra {
 
 			// then
 			assert_eq!(Currency::free_balance(&20), 20);
+			assert_eq!(TotalValueLocked::<T>::get(), 33);
+
 			// 20's share of the rewards is the other 2/3 of the rewards, since they have 20/30 of
 			// the shares
 			assert_eq!(PoolMembers::<Runtime>::get(20).unwrap().points, 20 + 2);
@@ -5354,7 +5433,7 @@ mod reward_counter_precision {
 			);
 
 			// slash this pool by 99% of that.
-			StakingMock::set_bonded_balance(default_bonded_account(), DOT + pool_bond / 100);
+			StakingMock::slash_by(1, pool_bond * 99 / 100);
 
 			// some whale now joins with the other half ot the total issuance. This will trigger an
 			// overflow. This test is actually a bit too lenient because all the reward counters are
@@ -6868,3 +6947,73 @@ mod commission {
 		})
 	}
 }
+mod slash {
+	use super::*;
+
+	#[test]
+	fn slash_no_subpool_is_tracked() {
+		let bonded = |points, member_counter| BondedPool::<Runtime> {
+			id: 1,
+			inner: BondedPoolInner {
+				commission: Commission::default(),
+				member_counter,
+				points,
+				roles: DEFAULT_ROLES,
+				state: PoolState::Open,
+			},
+		};
+		ExtBuilder::default().with_check(0).build_and_execute(|| {
+			// Given
+			Currency::set_balance(&11, ExistentialDeposit::get() + 2);
+			assert!(!PoolMembers::<Runtime>::contains_key(11));
+			assert_eq!(TotalValueLocked::<T>::get(), 10);
+
+			// When
+			assert_ok!(Pools::join(RuntimeOrigin::signed(11), 2, 1));
+
+			// Then
+			assert_eq!(
+				pool_events_since_last_call(),
+				vec![
+					Event::Created { depositor: 10, pool_id: 1 },
+					Event::Bonded { member: 10, pool_id: 1, bonded: 10, joined: true },
+					Event::Bonded { member: 11, pool_id: 1, bonded: 2, joined: true },
+				]
+			);
+			assert_eq!(TotalValueLocked::<T>::get(), 12);
+
+			assert_eq!(
+				PoolMembers::<Runtime>::get(11).unwrap(),
+				PoolMember::<Runtime> { pool_id: 1, points: 2, ..Default::default() }
+			);
+			assert_eq!(BondedPool::<Runtime>::get(1).unwrap(), bonded(12, 2));
+
+			// Given
+			// The bonded balance is slashed in half
+			StakingMock::slash_by(1, 6);
+
+			// And
+			Currency::set_balance(&12, ExistentialDeposit::get() + 12);
+			assert!(!PoolMembers::<Runtime>::contains_key(12));
+
+			// When
+			assert_ok!(Pools::join(RuntimeOrigin::signed(12), 12, 1));
+
+			// Then
+			assert_eq!(
+				pool_events_since_last_call(),
+				vec![
+					Event::PoolSlashed { pool_id: 1, balance: 6 },
+					Event::Bonded { member: 12, pool_id: 1, bonded: 12, joined: true }
+				]
+			);
+			assert_eq!(TotalValueLocked::<T>::get(), 18);
+
+			assert_eq!(
+				PoolMembers::<Runtime>::get(12).unwrap(),
+				PoolMember::<Runtime> { pool_id: 1, points: 24, ..Default::default() }
+			);
+			assert_eq!(BondedPool::<Runtime>::get(1).unwrap(), bonded(12 + 24, 3));
+		});
+	}
+}
diff --git a/substrate/frame/staking/src/lib.rs b/substrate/frame/staking/src/lib.rs
index e59b2a3324a6..dcf57a464323 100644
--- a/substrate/frame/staking/src/lib.rs
+++ b/substrate/frame/staking/src/lib.rs
@@ -671,8 +671,14 @@ impl<T: Config> StakingLedger<T> {
 		// clean unlocking chunks that are set to zero.
 		self.unlocking.retain(|c| !c.value.is_zero());
 
-		T::EventListeners::on_slash(&self.stash, self.active, &slashed_unlocking);
-		pre_slash_total.saturating_sub(self.total)
+		let final_slashed_amount = pre_slash_total.saturating_sub(self.total);
+		T::EventListeners::on_slash(
+			&self.stash,
+			self.active,
+			&slashed_unlocking,
+			final_slashed_amount,
+		);
+		final_slashed_amount
 	}
 }
 
diff --git a/substrate/frame/staking/src/mock.rs b/substrate/frame/staking/src/mock.rs
index cf08f8be1f27..c41144278f2c 100644
--- a/substrate/frame/staking/src/mock.rs
+++ b/substrate/frame/staking/src/mock.rs
@@ -278,6 +278,7 @@ impl OnStakingUpdate<AccountId, Balance> for EventListenerMock {
 		_pool_account: &AccountId,
 		slashed_bonded: Balance,
 		slashed_chunks: &BTreeMap<EraIndex, Balance>,
+		_total_slashed: Balance,
 	) {
 		LedgerSlashPerEra::set((slashed_bonded, slashed_chunks.clone()));
 	}
diff --git a/substrate/primitives/staking/src/lib.rs b/substrate/primitives/staking/src/lib.rs
index 1621af164b37..8b5797d7918f 100644
--- a/substrate/primitives/staking/src/lib.rs
+++ b/substrate/primitives/staking/src/lib.rs
@@ -121,10 +121,12 @@ pub trait OnStakingUpdate<AccountId, Balance> {
 	/// * `slashed_active` - The new bonded balance of the staker after the slash was applied.
 	/// * `slashed_unlocking` - A map of slashed eras, and the balance of that unlocking chunk after
 	///   the slash is applied. Any era not present in the map is not affected at all.
+	/// * `slashed_total` - The aggregated balance that was lost due to the slash.
 	fn on_slash(
 		_stash: &AccountId,
 		_slashed_active: Balance,
 		_slashed_unlocking: &BTreeMap<EraIndex, Balance>,
+		_slashed_total: Balance,
 	) {
 	}
 }