Token Value Accrual

Definition ∞ Token value accrual describes the process by which a digital token gains economic worth through its utility, scarcity, or association with a successful decentralized protocol. This involves mechanisms where protocol fees, governance rights, or staking rewards contribute to the token’s demand and price appreciation. It is a key aspect of a token’s economic design.
Context ∞ Understanding token value accrual is essential for assessing the long-term viability and investment potential of digital assets. News often discusses various protocol upgrades or economic model adjustments aimed at enhancing a token’s accrual properties. The ongoing challenge for projects involves designing sustainable mechanisms that align with network activity and provide tangible utility to token holders.