A governance token crypto token that includes voting power in the decentralized community that issued or uses it. Governance tokens let users determine future rules and goals as well as changes to the architecture of the blockchain they represent.
Governance tokens represent a user’s ownership in a decentralized protocol or project. They provide the token holders with certain rights that influence a protocol’s direction. This could include which new products or features to develop, how to spend a budget, which integrations or partnerships should be pursued, and more.
Governance tokens represent a different way to govern organizations. This model of organization through governance tokens offers a more equitable, decentralized, and transparent governance style. In most cases, one token equals one vote. These tokens are designed to bind the communities together to ensure blockchain projects can develop healthily.
Bear in mind that governance tokens are not solely meant to confer voting rights. Many blockchain projects also allow governance tokens to be used in other ways, including:
Extra reading:
https://crypto.com/university/what-are-governance-tokens
https://academy.binance.com/en/articles/what-are-governance-tokens
https://decrypt.co/resources/what-are-governance-tokens-how-token-owners-shape-dao
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