Base Layer Yield

Definition ∞ Base layer yield refers to the native economic returns generated directly from participating in the foundational security and operation of a blockchain network. This yield is typically earned through staking mechanisms in proof-of-stake systems or mining rewards in proof-of-work protocols. It represents the intrinsic reward for contributing computational power or locked assets to maintain the network’s integrity and process transactions. The yield compensates participants for their role in network consensus.
Context ∞ Discussions around base layer yield are central to understanding the economic models of various blockchain protocols and frequently feature in crypto news concerning network upgrades and staking developments. The stability and predictability of this yield are crucial for network security and attracting participants, especially as competition among Layer 1 blockchains intensifies. Future developments in protocol design aim to optimize these yields while maintaining decentralization and security.