GlossaryIntermediate
Governance Token
A token that grants holders voting rights over a protocol's decisions.
A governance token gives its holder the right to vote on proposals affecting a protocol or DAO, such as changes to its rules, fee structure, or treasury spending.
Voting power is often, though not always, proportional to how many governance tokens a participant holds or has delegated to them.
Examples
- Holding a governance token might let a user vote on a proposed change to a protocol's fee structure.
- Some users delegate their governance token voting power to others rather than voting directly.