@lunask
Governance tokens give holders the power to participate in the decision-making process of a decentralized protocol. Token holders can vote on important matters like protocol upgrades, changes in fees, or how funds are allocated. This decentralized governance structure allows the community to have a say in the protocol’s future direction, ensuring transparency and fairness. However, large token holders or whales can disproportionately influence decisions, raising concerns about centralization. Despite these risks, governance tokens empower users to shape the ecosystem’s evolution while maintaining decentralized control.
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