Tokenomics & On-chain

What is a governance token?

A governance token is a cryptocurrency that grants its holders the right to vote on decisions about a protocol, such as changes to parameters, treasury spending, or upgrades. Voting power usually scales with the number of tokens held. For example, a decentralized exchange might let holders vote on fee structures or how to allocate community funds. Governance tokens convert ownership into influence over a project's direction, though actual participation and the weight of votes vary widely. Reading a protocol's governance rules shows how much real control a token confers versus how much stays with founders.