Value Capture Model

Definition ∞ A value capture model describes the strategic framework outlining how a business or protocol generates and retains economic benefit from its activities. This model specifies the mechanisms through which an entity extracts and accumulates value from its user base, network effects, or unique service offerings. It details the revenue streams, fee structures, or other economic incentives that translate utility into tangible worth for stakeholders. Understanding a value capture model is essential for assessing the financial sustainability and investment appeal of a venture.
Context ∞ In the cryptocurrency and blockchain space, the value capture model is a critical element for evaluating the economic design and long-term viability of digital assets, protocols, and decentralized applications. News frequently analyzes how various tokens or platforms accrue value, whether through transaction fees, staking rewards, governance rights, or burn mechanisms. A clear and sustainable value capture model is often seen as a key indicator of a project’s potential for enduring success and utility within the digital economy.