Emissions

Emissions are the new tokens a protocol issues over time according to a predefined schedule, typically distributed as rewards to stakers, liquidity providers, or other participants the protocol wants to attract. Emissions are the supply side of tokenomics: they fund incentives, but every emitted token dilutes existing holders unless matched by new demand.

A concrete example: a decentralized exchange might emit one million of its governance tokens per week, split across designated liquidity pools in proportion to votes or a fixed schedule, so that providers in those pools earn the token on top of trading fees. Proof-of-stake networks work similarly at the base layer — new tokens are emitted each epoch as staking rewards. Emission schedules usually decline over time, through step-downs or halvings, to limit long-term inflation.

Emissions explain most eye-catching DeFi yields: a 200 percent APY is usually not profit generated by the protocol but freshly printed tokens, and the common misconception is treating that as sustainable income when the realized return depends entirely on the token's price holding up while recipients sell. The industry has repeatedly seen the 'farm and dump' cycle: high emissions attract capital, sell pressure crushes the token, yields collapse, and the capital leaves. Well-designed protocols try to direct emissions where they buy lasting liquidity or security, and taper them as organic fee revenue grows.