What Are the Primary Functions of Governance Tokens in a DAO’s Financial Structure?

Governance tokens are foundational to a DAO's financial structure, primarily granting holders voting rights on proposals. This allows token holders to influence key decisions, such as treasury spending, protocol upgrades, and strategic direction.

Financially, these tokens represent a stake in the organization, aligning the incentives of holders with the long-term success of the DAO. Their value is often tied to the utility and performance of the protocol, making them a core asset within the DAO's ecosystem.