Token-Based Consensus refers to a system in which decision-making and validation within a network are governed by the ownership and distribution of tokens. Tokens can represent various assets or rights within the network, and holders of these tokens often participate in the consensus process.In this model, participants stake tokens to demonstrate their commitment to the network. Their stake can determine their influence in validating transactions, creating new blocks, or proposing changes to the protocol. This approach aims to align the interests of token holders with the health and security of the network.Different variations exist, such as Proof of Stake (PoS) and Delegated Proof of Stake (DPoS). In PoS, anyone can participate in the validation process based on the number of tokens they hold, while DPoS allows token holders to vote for delegates who will then validate on their behalf.Token-Based Consensus enhances security and decentralization while providing incentives for participants to act in the network’s best interest. Its effectiveness depends on the economic mechanisms and governance structures that underpin the token system.