Definition ∞ On-chain rewards are incentives distributed directly via a blockchain protocol for participating in network activities. These rewards are typically cryptocurrency tokens or other digital assets. They are automatically disbursed based on predefined smart contract rules or protocol mechanisms. Examples include block rewards for miners or validators and staking rewards for network participants.
Context ∞ The ongoing discourse concerning on-chain rewards often addresses their sustainability and the economic models underpinning various blockchain networks. News frequently reports on changes in reward structures and their impact on network security and decentralization. Future developments include more sophisticated reward distribution mechanisms and their role in encouraging specific user behaviors within decentralized applications. These elements are central to the long-term viability and participant motivation in blockchain ecosystems.
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