Developers create Governance tokens to give token holders a voice in how a system evolves. Holders of governance tokens have the ability to influence project activities such as proposing and deciding on new feature proposals, as well as modifying the governance system itself.

Governance tokens are digital assets that represent voting power in a blockchain-based project. They’ve been largely implemented into DeFi projects recently since they need to distribute powers and rights to users in order to stay decentralized.