Equity-based governance refers to a system where stakeholders have a say in decisions based on their ownership or stake in a project. In this model, participants usually hold tokens or coins that represent their investment or commitment to the network.The governance process often involves voting mechanisms, where decisions about the development, changes, or direction of a project are determined by the community. Those with larger stakes have more influence, reflecting their investment in the project’s success. This creates a direct link between governance power and financial risk.A key aspect is transparency, as stakeholders can track proposals and outcomes on a public ledger. This openness encourages community engagement and a sense of ownership among participants.However, challenges exist, such as the risk of centralization when a few holders possess a significant amount of tokens. This could lead to decisions that benefit a small group rather than the community as a whole, potentially undermining the ideals of decentralization. Overall, equity-based governance aims to balance power among stakeholders while fostering collaborative decision-making.