Dividends are the income a holder of an asset receives in the form of a distributed part of profit. In the classic sense, dividends are paid to a company's shareholders, but in the context of investments the term is often associated with the broader concept of return — ROI (Return on Investment), that is, the profitability of investments and the yield on invested capital.

The ROI indicator helps assess the effectiveness of an investment: it shows what profit or loss an asset has brought relative to the amount spent. It is calculated as the ratio of the net result of the investment to the amount of capital invested, after which it is expressed as a percentage. It is a universal benchmark that makes it possible to compare different instruments with one another.

Dividends in cryptocurrencies

In the crypto market there is no direct analogue of classic dividends, but there are similar mechanisms of passive income: staking rewards, payouts to token holders in distribution protocols, and income from providing liquidity. It is important to understand that any return is associated with risk, and a high historical yield does not guarantee a future result. Assessing ROI should take into account fees, volatility, and the investment horizon.