TOKENS & ASSETS
Governance Token
Definition
Governance tokens give holders voting rights on protocol decisions such as parameter changes, upgrades, and treasury management. They represent democratic control over decentralized protocols and often appreciate with protocol success.
Example
Example
UNI token holders can vote on Uniswap protocol upgrades, fee structures, and treasury spending proposals.
Risks to Consider
Risks
- Governance attacks
- Token price volatility
- Low participation
Common Questions
Do worthless governance tokens have monetary value?
Yes, they trade on markets and derive value from the protocol's success and potential future cash flows or benefits.
