Governance tokens give holders voting power in decentralized networks, allowing them to shape the future of the project. This article explores the importance of governance in crypto.
What Are Governance Tokens?: Define governance tokens as crypto assets that give holders the ability to vote on protocol upgrades, fee structures, and other decisions within decentralized platforms.
Examples of Governance Tokens: Highlight projects like Uniswap (UNI), Aave (AAVE), and MakerDAO (MKR), where governance tokens allow the community to participate in decision-making.
Challenges with Governance: Discuss the potential for governance to be centralized if a small number of holders control a large percentage of tokens, and how protocols attempt to ensure fair representation.