@secants
Governance tokens in DeFi allow holders to participate in important decisions about the project’s development, such as protocol upgrades, fee structures, or treasury management. The more tokens a user holds, the greater their voting power. This decentralizes control, empowering the community rather than a central authority. However, if a small group controls a large portion of tokens, it can lead to centralization, undermining the project's decentralized nature. These tokens often provide an incentive for users to remain engaged and aligned with the project's long-term goals.
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