Digital Assets Knowledge
What is the role of governance tokens in decentralized autonomous organizations (DAOs)?



Governance tokens in DAOs play an important role in enabling decentralized governance. Holders of these tokens are granted voting rights, which they can use to participate in the decision-making processes of the organization. This includes making decisions on proposals related to the development, management, and allocation of resources within the DAO. Governance tokens essentially democratize control and decision-making, allowing token holders to directly influence the direction and policies of the organization, in contrast to traditional organizations where decisions are made by a centralized group of leaders.