What Is the Concept of a “Protocol Sink” for Governance Tokens?

A protocol sink is a mechanism that encourages or requires users to lock up or use the governance token for a specific function, effectively removing it from the liquid circulating supply. Examples include staking for security, locking for boosted governance power, or using the token as collateral.

The sink creates sustained demand and reduces velocity, thereby increasing scarcity and supporting a higher intrinsic value for the token.