What is Governance Token?

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Accepted Answer

A **Governance Token** is a type of cryptocurrency that grants its holders voting rights and a direct stake in the decision-making process of a decentralized protocol, typically a Decentralized Autonomous Organization (DAO) or a Decentralized Finance (DeFi) application. These tokens are fundamental to decentralized governance, allowing the community to propose and vote on critical changes such as fee structures, protocol upgrades, and treasury fund allocation.

Governance Token

What is Governance Token?

What is the primary function of a Governance Token in a Decentralized Autonomous Organization (DAO)?

How do Governance Tokens create value and incentivize participation within the DeFi ecosystem?

What are the key risks and challenges associated with the governance model enabled by Governance Tokens?

When did Governance Tokens emerge, and what are some of the most influential examples in the crypto space?

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