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What Is a Governance Token and How Does It Grant Voting Power?

A governance token is a cryptocurrency that represents voting power within a decentralized autonomous organization (DAO). Holders can use their tokens to vote on proposals that affect the protocol's future, such as adjusting fees, changing collateral types, or upgrading the smart contract.

The voting power is typically proportional to the number of tokens held or staked.

What Is the Difference between Governance and Ownership Tokens in Fractionalization?
What Is ‘Token-Weighted Voting’?
How Do Governance Tokens Work within a DAO?
How Can a DAO Use Tokenized Vaults to Manage Its Governance Participation?