Staking rewards are tokens earned by holders who lock (stake) their tokens to participate in network consensus, provide security, or support protocol operations. In Proof-of-Stake networks, stakers validate transactions and earn newly minted tokens as compensation.
Staking rewards are a primary source of token emissions in many protocols. While they incentivize network participation and security, they also increase the circulating supply. The real yield (staking rewards minus inflation) determines whether staking is truly profitable or merely offsets dilution.
Staking mechanisms can influence supply dynamics significantly. When a large percentage of tokens are staked, the effective circulating supply (tokens available for trading) decreases, which can support price stability even as total supply grows through emissions.