Definition ∞ On-Chain Yield Units represent quantifiable returns or interest generated from digital assets directly within a blockchain protocol, typically through decentralized finance (DeFi) applications. These units accrue to users who provide liquidity, stake assets, or participate in other yield-generating activities. Their value is determined by the underlying protocol’s economic mechanisms.
Context ∞ The discussion around on-chain yield units focuses on their role in attracting capital to DeFi ecosystems and providing new avenues for passive income. Its situation involves assessing the associated smart contract risks, impermanent loss, and the sustainability of high yield rates. Critical future developments include increased regulatory scrutiny of DeFi protocols and the evolution of more robust risk management frameworks for these yield-generating mechanisms.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
