Proof of Contribution

Definition ∞ Proof of Contribution is a consensus mechanism or reward system that allocates value or governance rights based on a participant’s verifiable contributions to a decentralized network. These contributions can include computational work, data provision, development effort, or other forms of value creation. It incentivizes active and beneficial participation within a blockchain ecosystem. This mechanism aims to align participant rewards with their positive impact on the system.
Context ∞ Proof of Contribution models are a subject of ongoing research and development in decentralized autonomous organizations (DAOs) and Web3 projects seeking fairer and more efficient incentive structures. The challenge lies in objectively quantifying and verifying diverse forms of contribution to prevent sybil attacks and ensure equitable distribution. Its adoption could significantly reshape governance and reward systems in future digital economies.