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Onchain Economics
Yield

Staking

Locking tokens in a protocol to earn rewards, secure a network, or gain governance rights.

In-Depth Explanation

Staking has multiple meanings: (1) Proof-of-stake validation where validators lock tokens as collateral; (2) Locking governance tokens for voting power and rewards; (3) Simply depositing tokens in a protocol. True staking rewards often come from inflation, so calculate real returns after dilution.

Related Terms

Validator

A participant in a proof-of-stake network who stakes tokens and is responsible for proposing and attesting to new blocks.

Liquid Staking

Staking tokens through a protocol that issues a liquid derivative token representing the staked position.

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Mercenary Capital

Capital that moves between protocols purely to chase the highest incentives, with no loyalty or long-term commitment.

Annual Percentage Yield

APY

The annualized return on an investment accounting for compound interest.

Annual Percentage Rate

APR

The annualized return on an investment without accounting for compounding.

Real Yield

Yield derived from actual protocol revenue and economic activity, not token emissions or inflation.

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