@jasperreedb2df1
Token staking can be a valuable mechanism for generating yield, but its sustainability depends on the source of rewards. Ideally, staking rewards come from real protocol revenue, such as transaction fees or service usage, rather than inflationary token issuance, which can dilute holders. Analyze whether staked tokens are locked with clear unbonding periods to prevent sudden liquidity shocks. Check if there are penalties for early withdrawal and whether the staking system is secure from slashing risks. Also, evaluate if staking provides governance rights, as this can enhance the value proposition by combining passive income with active decision-making power.
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