You basically have the coin on an address, and you get rewarded a certain % each month/year for the amount you have. I may have some of the terminology off, i'm fairly new to crypto, but it's basically like that. Etherium and other coins do that as well.
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oh wow, I heard about NEO rewarding GAS coin recently :)
I remember reading someone said they are making a full time income off of GAS lol from the free gas from holding NEO... they either have a lot or live in a very cheap country compared to the US...