Ecosystem Finance

Definition ∞ Ecosystem finance refers to financial activities and services that operate within an interconnected network of participants, technologies, and protocols. This framework considers the entire value chain and interdependent components rather than isolated transactions. It encompasses how various entities, from developers to end-users, interact and contribute to the economic activity within a digital or traditional financial system. This approach emphasizes network effects and collaborative value creation.
Context ∞ In the digital asset sphere, ecosystem finance describes the financial dynamics within a blockchain network, including decentralized finance (DeFi) protocols, stablecoins, and associated infrastructure. News often covers the growth and evolution of these digital ecosystems, reporting on new protocols, liquidity provision, and the economic models that drive participation. Understanding ecosystem finance helps interpret trends in usage-based rewards and infrastructure revenue within these digital domains.