Active rewards are incentives granted for ongoing participation in a blockchain network or decentralized application. These compensations are contingent upon continuous engagement, such as providing liquidity or validating transactions. They contrast with passive rewards, which may require less direct involvement. Such rewards serve to align participant actions with the network’s operational requirements and security.
Context
News often reports on changes to active reward structures within various protocols, impacting participant profitability and network stability. Discussions surrounding active rewards frequently involve balancing token distribution with sustainable economic models. Protocols adjust these mechanisms to encourage desired behaviors, like maintaining network health or liquidity provision.
The protocol's Active Staking Rewards mechanism successfully converts token distribution utility into a self-reinforcing, high-yield capital magnet on Solana.
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