Clear DefinitionsYield (Tokenomics)
1 min read
Pronunciation
[yeeld toh-ken-om-iks]
Analogy
Yield in tokenomics is like the interest rate on a savings account or dividends from stocks.
Definition
The return earned by token holders through mechanisms like staking rewards, liquidity mining, or fee sharing, expressed as an annualized percentage.
Key Points Intro
Yields reward participation via:
Key Points
Staking rewards: Tokens earned for securing network.
Liquidity incentives: Rewards for providing liquidity.
Fee distributions: Share of protocol fees allocated to holders.
Compound potential: Reinvested yields boost effective APY.
Example
Staking 1 000 tokens at 8% yield generates 80 tokens per year, which can be restaked to compound returns.
Technical Deep Dive
Yield calculated as `rewardAmount / stakedAmount / timePeriod × annualFactor`. Distribution contracts track `accRewardPerShare` and `rewardDebt` to compute per‑user pending yields.
Security Warning
High advertised yields may be unsustainable and attract speculative attacks.
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