Governance Token
A governance token empowers holders with influence over a platform’s protocol, products, and future capabilities. These tokens are commonly issued via decentralized protocols that foster community-driven growth and self-sufficiency. With governance tokens, holders can suggest modifications to the protocol and engage in voting processes to determine the implementation of such changes. These tokens are instrumental in democratically managing a protocol in a fair and decentralized manner. In Proof-of-Stake (PoS) blockchains, governance tokens can also be staked within network validator nodes to enhance the platform’s security and operational efficiency while earning staking rewards.