Fees, incentives, and value capture
High yields funded mainly by inflation are not real yield.
Fees, incentives, and value capture
| Concept | Explanation | |---|---| | Protocol fees | Amounts users pay for transactions or services. | | Revenue | Portion of fees retained by the protocol or distributed to stakeholders, depending on methodology. | | Token incentive | New tokens paid to users, validators, or liquidity providers. | | Real yield | Rewards funded by economic activity rather than only new token issuance. | | Fee burn | Fees used to permanently remove tokens. | | Value capture | Mechanism connecting network use to token-holder benefit. |
High yields can be misleading when funded mainly by inflation. Compare rewards with dilution, fees, and the sustainability of user demand.