Definition of"governance token" in English
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governance token
Definitions
Noun
Examples
"Holders of the governance token can propose and vote on changes to the protocol's fee structure."
Holders of the governance token can propose and vote on changes to the protocol's fee structure.
"Acquiring governance tokens is essential for participating in the decision-making process of many decentralized finance (DeFi) platforms."
Acquiring governance tokens is essential for participating in the decision-making process of many decentralized finance (DeFi) platforms.
Synonyms
Etymology
Coined in the early 2020s within the cryptocurrency and blockchain space, combining "governance" (the act or manner of governing; control or rule) and "token" (a unit of value or representation on a blockchain). It reflects the shift towards decentralized control and user participation in project development.
Cultural Notes
Governance tokens are fundamental to the concept of decentralized governance, particularly within Web3, DeFi, and DAO ecosystems. They represent a departure from traditional centralized corporate structures by distributing decision-making power among a community of token holders, enabling collective oversight and evolution of blockchain-based projects. Their value often reflects both their utility in governance and speculative market interest.