What Are Governance Tokens? | Binance Academy
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Governance tokens represent a class of utility tokens that give holders the right to vote on governance matters of decentralized blockchain projects.
Key Takeaways Governance tokens give holders voting rights on key decisions affecting a blockchain project, offering more decentralized decision-making than traditional centralized models. Common models include one-token-one-vote systems where smart contracts automatically implement voting results, though vote-escrow models have faced participation and governance-capture challenges in recent years. Governance tokens can align stakeholder interests and enable collaborative communities, but security risks such as flash loan attacks and possible classification as securities remain ongoing…
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