Definition ∞ Performance-linked assets are digital assets whose value or utility is directly tied to the achievement of specific metrics, milestones, or outcomes within a protocol, application, or real-world system. These assets might grant holders increased rewards, governance rights, or access to features based on the underlying system’s success. Their design aims to align the incentives of asset holders with the performance objectives of the associated project. This creates a direct correlation between asset value and operational success.
Context ∞ Performance-linked assets are increasingly discussed in the context of tokenomics design, particularly for decentralized autonomous organizations and Web3 projects. News often analyzes how these assets incentivize beneficial behavior and contribute to the long-term viability of protocols. The evaluation of such assets requires careful consideration of the underlying performance metrics.
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