![]() In return for staking their tokens, participants earn additional tokens as rewards. Staking Rewards: Staking allows users to lock up their tokens in a smart contract for a specified period to support network security, governance, or other functions. The number of tokens received typically depends on the amount of liquidity provided and the duration of participation.Ĥ. In return for their contribution, users are rewarded with additional tokens from the project. It involves users providing liquidity to a decentralized exchange (DEX) or lending platform by depositing their tokens into a liquidity pool. Liquidity Mining: Liquidity mining, also known as yield farming, is a popular token emission mechanism in DeFi. Airdrops are often used to increase awareness, reward early adopters, or incentivize specific actions within the ecosystem.ģ. ![]() Airdrops: Airdrops involve the free distribution of tokens to individuals who meet certain criteria, such as holding a specific token or being an active user of a particular platform. The token price and allocation details are usually predetermined by the project team.Ģ. Participants who invest in the project during the ICO phase typically receive tokens in proportion to their investment. Initial Coin Offering (ICO): In an ICO, a project offers a limited supply of tokens to the public for sale. Here are some common examples of token emission mechanisms in DeFi projects:ġ. Token emissions can take various forms depending on the project’s design and goals. It is a mechanism used by DeFi projects to incentivize and reward various actors for their contributions to the ecosystem. Token emission, in the context of investing in DeFi projects ( decentralized finance), refers to the process by which new tokens are created and distributed to participants or stakeholders within a particular project or protocol.
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