Governance Token
A governance token gives holders voting rights in a protocol's decisions. One token typically equals one vote on proposals ranging from fee changes to treasury allocation.
Understanding the Concept
Governance tokens give you a stake in the protocol's future. UNI holders vote on Uniswap's direction. AAVE holders decide Aave's parameters. It's like shareholder voting but for decentralized protocols. The value proposition is twofold: governance power and potential revenue sharing. Some protocols share fees with token holders or do buybacks. Others offer nothing but voting. Evaluate: what can you actually vote on? Do votes matter? (Some teams control enough tokens to override community votes.) Is there a path to value accrual? Not all governance tokens are worth holding.
Real-World Example
You hold 10,000 UNI tokens. A proposal comes up to enable fee switch—directing a portion of trading fees to UNI holders. You vote "yes" with your tokens. If it passes, your UNI becomes a revenue-generating asset.
How Strykr Helps
Strykr tracks Governance Token developments across the crypto ecosystem. Our AI provides real-time insights and alerts to help you navigate the market with confidence.
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