Governance tokens grant voting power over protocol parameters, treasury spending, and upgrades. Design choices — one-token-one-vote, delegation, vote-escrow — shape who actually controls the protocol.
Some protocols separate governance from utility — a stable staking token plus a volatile governance token. Complexity increases but can reduce governance attacks on fully liquid tokens.
When evaluating any governance token, ask what voters can actually change, whether the treasury is substantial relative to market cap, and if passed proposals execute on chain or get ignored.