DeFi Incentive Programs

Definition ∞ DeFi Incentive Programs are structured initiatives within decentralized finance protocols that offer rewards to users for contributing to the protocol’s operations or liquidity. These programs typically distribute native tokens or other assets to encourage actions such as providing liquidity to trading pools, staking tokens, or participating in governance. Their purpose is to bootstrap activity and sustain network participation.
Context ∞ Reports on DeFi Incentive Programs frequently assess their success in attracting capital and users to new or existing protocols. Analysis often centers on the annual percentage yields (APYs) offered, the economic sustainability of the reward distribution, and the potential for these programs to create short-term mercenary capital. The long-term impact on token value and protocol stability is a constant point of discussion.