Definition ∞ On-Chain Economic Policy refers to the set of rules, parameters, and algorithms encoded directly into a blockchain protocol that govern its economic behavior and resource distribution. These policies dictate aspects such as token issuance schedules, transaction fee structures, staking rewards, and inflation mechanisms. They are immutable once deployed unless altered through governance.
Context ∞ News frequently analyzes the impact of On-Chain Economic Policy on a protocol’s sustainability, decentralization, and market dynamics. Debates often arise regarding optimal fee burning mechanisms, staking reward rates, and the long-term supply schedules of native tokens. These policies are critical for maintaining network health and incentivizing participant behavior.
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