Emission (Emission (Token))
Definition
Token emission refers to the rate and schedule at which new tokens are created and distributed by a protocol. Emissions are typically used to incentivize liquidity providers, stakers, or other protocol participants. The emission schedule (how many tokens are released over time) is a critical factor in tokenomics — too high causes inflation and selling pressure, too low fails to attract liquidity.
Example
Curve emits CRV tokens to liquidity providers based on gauge weights. The emission rate decreases over time following a pre-set schedule, reducing inflation gradually.
Risks to Consider
- Inflationary selling pressure
- Unsustainable APY projections
- Mercenary capital
Common Questions
Are emissions sustainable?
Emissions are only sustainable if the protocol generates enough real value (fees, revenue) to justify the token distribution. Protocols that rely purely on emissions without organic revenue eventually face a death spiral.
