---
title: Governance Token
url: "https://www.unknowngravity.com/en/glosario/token-de-gobernanza"
site: Unknown Gravity
published: "2026-09-21T11:55:12+00:00"
modified: "2026-09-21T11:55:14+00:00"
language: en-US
description: "A governance token grants the right to vote on the decisions of a protocol or a DAO: parameters, treasury, upgrades. It does not promise income — it promises a voice."
section: "Home > Governance Token"
---

# Governance Token

GLOSSARY · BLOCKCHAIN & WEB3

What a governance token is: the right to vote on the decisions of a protocol or DAO, how it works in practice and when it brushes the regulatory boundary.

WHAT IS IT? · FOR DUMMIES

A **governance token** grants the right to vote on the decisions of a protocol or a DAO: parameters, treasury, upgrades. It does not promise income — it promises a voice. In practice, how much voice and whose is the interesting question.

WHAT IS IT? · PRO

The typical mechanics: on-chain proposals, token-weighted voting (sometimes with delegation to representatives) and execution either automatic or by [multisig](/en/glosario/multisig-multifirma). Its known problems: concentration (whales and funds decide), apathy (tiny participation) and bought or rented votes. Cases such as [Ondo](/en/articulos/ondo-finance-ondo-explained) or the large DeFi protocols — as we analyse in [Lido](/en/articulos/lido-dao-ldo-que-es-y-como-funciona) — show real governance with those real limits.

The regulatory boundary: if the governance token also distributes economic flows of the protocol or works as a disguised equity stake, it can be reclassified — the [tokenomics](/en/glosario/tokenomics) analysis and the legal one go together.

## 01 / Key points

- Right to vote on the decisions of a protocol or DAO
- Mechanics: proposals, weighted voting, delegation, execution
- Problems: concentration, apathy, bought votes
- With added economic rights it can be reclassified by regulators

## 02 / Advantages

- Verifiable, open protocol governance
- Aligns the community with the project's evolution
- Delegation enables expert governance

## 03 / Disadvantages

- Plutocracy: whoever holds most, decides
- Very low real participation in most DAOs
- Reclassification risk if it distributes economic value

This entry is informative. It is not legal, tax or investment advice. The rules cited change: check the current version on [BOE](https://www.boe.es) and [EUR-Lex](https://eur-lex.europa.eu).