Blockchain & Cryptocurrency Glossary

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Token Value Accrual

1 min read
Pronunciation
[toh-ken val-yoo uh-skroo-uhl]
Analogy
Value accrual is like dividend payments to shareholders based on company profits.
Definition
Mechanisms by which economic value—fees, revenue, or earnings—is captured and distributed to token holders.
Key Points Intro
Value accrual models sustain token demand via:
Key Points

Fee sharing: Portion of transaction or protocol fees redistributed.

Buyback & burn: Protocol repurchases tokens and retires them.

Staking rewards: Economic rents paid to holders for securing network.

Revenue streams: Protocol-owned assets generate yield for tokens.

Example
A DEX charges 0.3% trading fee, allocates 50% of fees to token stakers who lock tokens in the protocol, increasing their effective yield.
Technical Deep Dive
Accrual implemented via fee router contracts: on each trade, a fraction of fees is transferred to a rewards pool. Rewards distributor uses Merkle trees or snapshot-based claim contracts for gas-efficient distribution. Burning uses `ERC20.burn` to reduce totalSupply, increasing scarcity.
Security Warning
Improper accrual logic can be exploited to siphon fees; audit fee routing and distribution modules.
Caveat
High accrual rates may attract speculators rather than real users; align incentives carefully.
Related Terms
Staking Rewards
Governance Token

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