Staking Yield
Staking yield is the annualized rate of return earned by token holders who lock their assets into a protocol to support network security. This return is derived from the protocol's issuance of new tokens and a portion of the transaction fees generated by network activity.
In the realm of tokenomics, the yield serves as an incentive to reduce circulating supply and align long-term holder interests with the protocol's health. Yield rates are often dynamic, adjusting based on the total amount of tokens staked across the network; as more tokens are staked, the yield per token typically decreases.
Investors must account for the inflation of the token supply, as the nominal yield may be offset by the dilution of their holdings. This metric is a primary driver of capital allocation in decentralized finance.