Onchain Yield

Definition ∞ Onchain Yield refers to returns generated directly from activities performed on a blockchain network, such as staking, providing liquidity to decentralized exchanges, or lending through smart contracts. These returns are typically paid in cryptocurrency and are verifiable on the public ledger. It represents a form of passive income within the digital asset ecosystem.
Context ∞ Onchain yield is a prominent concept in crypto news, especially within the decentralized finance (DeFi) sector. Investors seek to maximize these yields, but they also contend with associated risks like smart contract vulnerabilities and impermanent loss. The pursuit of sustainable and secure onchain yield mechanisms continues to drive innovation and discussion in the digital asset space.