Definition ∞ Native yield refers to the inherent economic returns generated directly by participating in the core operations of a blockchain protocol or digital asset. This yield is not derived from external financial products or speculative trading, but rather from fundamental protocol activities like staking, transaction fee distribution, or block rewards. It represents a foundational incentive structure for network participants. This yield is often denominated in the protocol’s own token.
Context ∞ The discussion around native yield often distinguishes it from other forms of yield generation, emphasizing its direct connection to protocol utility and security. A key debate involves the sustainability of various native yield models, particularly concerning token issuance rates and network adoption. A critical future development to watch for is the ongoing optimization of these yield mechanisms to ensure long-term network health and provide predictable, value-aligned returns for participants.
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