Governance token economics refers to the system that governs how tokens are used to make decisions within a blockchain project. These tokens grant holders the ability to participate in the decision-making process, such as voting on proposals for upgrades, changes in protocol, or other significant governance issues.Typically, users earn or buy governance tokens. The value of these tokens can be influenced by factors such as demand, the size of the user community, and the overall health of the project. This creates an incentive structure where token holders are encouraged to participate actively to protect their investments and influence the project’s direction.Through this model, governance tokens aim to decentralize control, allowing more stakeholders to have a say, rather than relying solely on a core development team. This approach promotes transparency, inclusiveness, and community-driven decision-making, which are essential for the sustainability and growth of decentralized ecosystems.