Token-based governance models use tokens to allow participants to influence decisions within a project or network. In these systems, token holders can propose changes, vote on proposals, and generally steer the direction of the project.Tokens can represent voting power, often proportional to the amount held by a participant. This means that those with more tokens have a greater say in governance matters, such as changes to protocols, fund allocations, or the adoption of new features.These models aim to foster community engagement and decentralized decision-making. By leveraging tokens for governance, projects can ensure that multiple stakeholders have a voice, promoting transparency and accountability. However, the concentration of tokens can lead to power imbalances, where a small group holds significant influence, raising questions about fairness and representation.Overall, token-based governance seeks to create a collaborative environment where decisions are made collectively, aligning the interests of the community with the project’s goals.