Each project sets different rules about how their governance tokens work. Tokens are distributed to stakeholders, including the founding team, investors, and users, according to different calculation models. Some governance tokens only vote on a certain set of governance issues, while others vote on most things. Some governance tokens can earn financial dividends, while others don’t.Governance tokens have some great benefits.
The biggest challenge of government tokens is the so-called whales problem. Whales are people who hold a large percentage of a certain crypto. If the biggest whales of a crypto project hold a significant portion of the overall supply of its governance token, they could swing the voting process to their favor. Projects need to make sure token ownership is truly decentralized and evenly distributed.
Governance tokens give xep🧿 holders voting power on issues that govern the development and operations of a blockchain project. ElectraProtocol
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