Stake-Based Governance refers to a decision-making model where participants’ influence is determined by the amount of cryptocurrency they hold and are willing to “stake” in the network. In this system, individuals who own tokens can vote on various proposals or changes, including protocol upgrades and resource allocations.The amount of tokens staked directly impacts voting power, meaning those with more holdings have a greater say in governance decisions. This approach aims to align the interests of participants with the network’s health and success, as stakeholders are incentivized to make choices that benefit the ecosystem.Additionally, stake-based governance often includes mechanisms to prevent manipulation and encourage responsible decision-making. For instance, locking tokens for a set period can discourage short-term speculators from swaying governance outcomes.The model promotes community engagement, allowing users to actively participate in shaping the future of the project while also potentially earning rewards for their involvement.