The Role of Governance Tokens in DeFi

Governance tokens are digital assets that give holders voting rights in decentralized protocols. Why are they important? - Decentralized decision-making: Token holders can propose and vote on changes to the protocol. - Incentivized participation: Active governance can be rewarded with additional tokens. - Community-driven development: Governance tokens align the interests of users and developers. Examples include UNI (Uniswap), COMP (Compound), and AAVE (Aave). Effective governance ensures the long-term sustainability of DeFi projects.