Governance tokens are cryptocurrencies that give holders the right to participate in the decision-making process of a decentralized protocol, blockchain, or decentralized autonomous organization (DAO). These tokens allow users to propose and vote on changes to the project, such as protocol upgrades, fee structures, treasury allocations, or new feature implementations.

Key Features of Governance Tokens

1. Voting Power – Holders can vote on proposals related to the ecosystem.
2. Decentralized Decision-Making – Eliminates reliance on a central authority.
3. Staking & Rewards – Some governance tokens provide staking benefits.
4. Protocol Upgrades – Influence changes in smart contracts and development.
5. Treasury Management – Token holders decide on fund allocations.
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Examples of Governance Tokens

• UNI (Uniswap) – Governs the Uniswap DEX.
• COMP (Compound) – Controls the Compound lending protocol.
• AAVE (Aave) – Decides on Aave's lending and borrowing parameters.
• MKR (MakerDAO) – Manages the Maker protocol and DAI stablecoin system.
• CRV (Curve Finance) – Influences the rewards and liquidity incentives on Curve.