Definition ∞ Web3 economics concerns the financial models and incentive structures within decentralized applications and blockchain-based ecosystems. It encompasses the design of tokenomics, governance mechanisms, and value distribution systems that underpin Web3 projects. This field analyzes how digital assets, smart contracts, and network participants interact to create economic activity and value. It differs from traditional internet economics by emphasizing decentralization, user ownership, and cryptographic security.
Context ∞ Web3 economics is a dynamic and evolving area, with continuous experimentation in token distribution, staking rewards, and protocol revenue sharing. News often reports on the success or failure of various tokenomics models and their impact on project sustainability and community engagement. Understanding these economic principles is crucial for assessing the long-term viability and innovation within the decentralized web.
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