What Is the Concept of a “Governance Premium” in Token Valuation?

A "governance premium" is the additional value attributed to a token due to the power it grants its holder to influence the protocol's future. This premium is quantifiable as the difference between the token's market price and its value based purely on cash flows or utility.

It reflects the expected value of being able to vote on critical decisions, such as fee changes, treasury allocations, or future tokenomic shifts. Protocols with highly active and impactful governance typically command a higher premium.