Definition ∞ Economic sustainability in the context of digital assets and blockchain protocols refers to the long-term viability and stability of a system’s economic model. This involves ensuring that the incentives for participants, the cost of operations, and the overall tokenomics support the network’s continued function and growth. It addresses whether a decentralized system can maintain its value and utility over extended periods. It considers factors like inflation, transaction fees, and reward distribution.
Context ∞ Economic sustainability is a critical discussion point for new and established blockchain projects, especially concerning their tokenomics and governance structures. Debates often focus on balancing short-term rewards with long-term network health. Future innovations aim to create more robust and adaptive economic models that can withstand market fluctuations and evolving user demands.
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