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Published on Apr 8, 2022

Governance Token

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#Glossary
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Governance tokens are critical in defining the future of the projects within the blockchain. It influences the decision-making process within the blockchain. The voting power within the blockchain is distributed to nodes via governance tokens. As DeFi (decentralized finances) are the core of the technology, a voting system is important for the working of the blockchain.

With governance tokens, users can vote on governance proposals. Almost all DeFi tokens in the market are governance tokens. Don’t be mistaken, governance tokens can do a lot. Besides its ability to vote on protocols, you can also take out loans and list it for an exchange. Luna of the Terra network is one such example.


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