Value Accrual Model

Definition ∞ A value accrual model describes how economic worth or utility is generated and distributed within a digital asset or blockchain protocol. This model specifies the mechanisms through which a token or network captures and retains value, such as through transaction fees, staking rewards, or governance rights. Understanding a project’s value accrual model is essential for assessing its long-term economic viability and investment potential. It explains how participants are incentivized and how the system sustains itself.
Context ∞ Value accrual models are frequently analyzed in crypto news and investment research, as they are central to evaluating the economic design and sustainability of decentralized projects. The discussion often compares different models, examining their effectiveness in aligning incentives and fostering network growth. A critical future development involves the continuous innovation and refinement of these models to create more robust, equitable, and efficient digital economies within the blockchain space.