

What are the tokens for community governance in the currency circle? Is the voting power valuable? DAO treatment analysis
Jul 11, 2025 pm 08:18 PMIn the world of cryptocurrencies, community governance has become an important part of decentralized protocols and platforms. Governance tokens is one of the core tools to achieve this goal. They are not just digital assets, but also carry participants’ right to express their opinions on the future direction of a particular ecosystem. Holding these tokens usually means getting an opportunity to vote in major decisions such as protocol upgrades, parameter adjustments, or allocations. This model is designed to transfer control from centralized entities and give it to a wide range of token holders.
Basic functions of governance tokens
1. Granting voting rights is the most direct function of governing tokens. Holders can vote for or against various proposals proposed by the community based on the number of tokens they hold.
2. The right to propose is often linked to governance tokens. Individuals or groups with a certain number of governance tokens can usually propose their own community improvement or agreement changes.
3. Participate in the distribution of income or enjoy specific rights and interests. In some agreements, governance token holders may also be able to share the benefits generated by the agreement or qualify for participation in a specific activity.
4. They represent a proof of ownership and engagement of decentralized networks. The number of tokens is often directly related to the individual's influence in governance.
Discussion on the value of voting rights
1. The value of voting rights is not static. It depends largely on the activity, importance of the protocols it governs, and the level of community participation.
2. A governance-active agreement involving major decisions may be considered more valuable because it directly affects the development trajectory and potential success of the agreement.
3. Participating in voting has the opportunity to affect the economic model, fee structure or rules related to user interests of the agreement, which brings a layer of practical significance to the voting rights.
4. In some cases, voting rights may even become the focus of game or interest groups for influence. This could lead to additional market demand for governance tokens due to their voting capabilities.
5. However, if a community is inactive, has few proposals, or the voting results have a weak impact on the agreement, the actual value of its voting rights may be relatively low. The convenience, level of knowledge, and the existence of the entrusted voting mechanism will also affect the actual exercise and perceived value of voting rights.
DAO governance operation model
1. Decentralized autonomous organization (DAO) is a typical structure for collective decision-making using governance tokens. In DAO, there is no central authority and all decision-making processes are driven by code and community voting.
2. The DAO governance process usually starts with the proposal. Members who meet the requirements can submit proposals on agreement upgrades, fund use, strategic direction, etc.
3. The proposal enters the discussion stage. Community members can evaluate, debate and provide feedback on proposals through forums, social media or other platforms.
4. Enter the voting stage. Members holding governance tokens use their token weight to vote on the proposal on-chain. Voting results are usually open and transparent.
5. Once the proposal is supported by the majority vote and other conditions are met, its content will be automatically executed, usually implemented through smart contracts. This automated execution is one of the biggest differences between DAO and traditional organizations.
Analysis of mechanisms for decentralized decision-making
1. DAO's decentralized decision-making relies on smart contracts and blockchain technology to ensure the immutability and transparency of the voting process and results.
2. Different DAOs may adopt different voting mechanisms, such as simple majority voting, quadratic voting or delegated voting. These mechanisms are designed to balance efficiency and fairness.
3. Delegated voting allows token holders to delegate their voting rights to representatives they trust, thereby lowering the threshold for individuals to participate in each vote while also concentrating expertise in making decisions.
4. Quorum is an important setting in many DAO governance. The proposal must reach the set minimum number of tokens or number of voters to make the voting results valid.
5. A healthy DAO governance requires active community participation, clear communication channels, and a strong on-chain voting infrastructure. These factors jointly build a framework for decentralized decision-making.
The above is the detailed content of What are the tokens for community governance in the currency circle? Is the voting power valuable? DAO treatment analysis. For more information, please follow other related articles on the PHP Chinese website!

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