Protocol revenue capture describes the ability of a blockchain protocol to generate and accrue economic value for its underlying token holders or the protocol itself. This refers to the mechanisms by which a decentralized protocol extracts value from its operations, typically through transaction fees, staking rewards, or a percentage of activity within its ecosystem. Effective revenue capture strengthens the protocol’s economic model and provides incentives for network security and development. It is a key metric for assessing a protocol’s long-term viability.
Context
Analyses of protocol revenue capture are common in crypto investment research and news, as it indicates the economic strength and sustainability of a decentralized application or network. Discussions frequently focus on how different fee structures, token burning mechanisms, or staking models contribute to or detract from a protocol’s ability to retain value.
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