On-chain governance models refer to mechanisms that allow token holders to make decisions about a blockchain’s development and operations directly on the blockchain itself. This typically involves voting processes facilitated by smart contracts, where stakeholders can propose changes, improvements, or updates.In such models, each token holder’s voting power is often proportional to the number of tokens they own. Proposals can include adjustments to the protocol, changes in fees, or updates on governance frameworks. This transparency aims to create a more democratic environment, where the community has a direct say in the project’s direction.The advantages of on-chain governance include increased accountability, as decisions are recorded immutably on the blockchain, and greater engagement from the community. However, challenges exist, such as voter apathy or the risk of centralization if a few holders hold a significant amount of tokens. Balancing these dynamics is crucial for maintaining an effective and fair governance system.