A native yield protocol is a decentralized finance application or mechanism that generates returns directly from the core operations or economic design of a blockchain network. These protocols often leverage staking, transaction fees, or other intrinsic network activities to provide yield to participants. Unlike protocols that rely on external assets or complex financial strategies, native yield protocols derive value from the fundamental utility and security of the underlying chain. This approach aims to offer a more sustainable and less volatile form of return. It is closely tied to the network’s inherent economic properties.
Context
The concept of native yield protocols is a significant topic in decentralized finance, particularly as market participants seek more sustainable sources of return. A key discussion revolves around distinguishing true native yield from synthetic or inflated yields derived from token issuance. A critical future development involves the innovation of new mechanisms that align native yield generation with network security and decentralization goals. The appeal of these protocols lies in their potential to offer robust returns without reliance on external market conditions or speculative assets.
The new Bitcoin L2 introduces a non-custodial BTC staking mechanism, transforming dormant capital into a yield-bearing primitive to bootstrap decentralized social network adoption.
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