DeFi & Yield

What is a governance token in a DeFi protocol?

A governance token is a crypto token that gives holders voting rights over how a DeFi protocol is run. Holders can propose and vote on decisions such as fee changes, supported assets, treasury spending, and upgrades, usually with voting power scaled to how many tokens they hold. For example, a protocol might let token holders vote to adjust the interest-rate model on its lending markets. Owning the token confers influence, not a claim on profits, and its market value can move sharply. Looking at who controls a protocol, and how, is part of the structural analysis we bring to crypto at Qatobit. Read our research.