Governance Tokens

Governance tokens represent voting power and often align economic interest with protocol success — UNI for Uniswap, AAVE for Aave, MKR for Maker. Holding tokens does not guarantee profit; it grants voice in parameters and treasury use.

Vote-escrow models reward long locks with more voting power — Curve's veCRV pioneered influencing gauge weights. That reduces short-term mercenary voting at the cost of liquidity lockup.

Governance tokens without a fee switch or buybacks may lack cash flow — value is governance optionality and speculation. Understand what your token actually controls before treating it as an investment.