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What Is a ‘Governance Token’ and What Utility Does It Provide to Its Holders?

A governance token grants holders voting rights to propose and decide on the future development of a decentralized protocol (DAO).
Greeks.Live17.11.25

What Is a ‘Governance Token’ and What Utility Does It Provide to Its Holders?

A governance token is a type of cryptocurrency that grants its holders voting rights on the future development and operational decisions of a decentralized protocol, such as a DeFi platform. The utility lies in the holder's ability to propose and vote on changes to the protocol's parameters, fee structures, or smart contracts.

This mechanism facilitates decentralized autonomous organization (DAO) management, allowing the community to steer the project's direction rather than a centralized team.

What Is a Governance Token and Its Role in a DAO?
How Does a Decentralized Autonomous Organization (DAO) Use Governance Tokens?
What Is the Function of a ‘Governance Token’ in a DeFi Protocol?
How Do Governance Tokens Enable Participation in a DAO?

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