What role does on-chain governance play in decentralized finance (DeFi) platforms?

1 answers

• josMar 06, 2025 · 5 months ago
  On-chain governance is a vital component of decentralized finance (DeFi) platforms. It allows token holders to actively participate in the decision-making process and influence the platform's direction. Through on-chain governance mechanisms, such as voting and proposal systems, token holders can vote on important decisions, including protocol upgrades, parameter adjustments, and feature implementations. This ensures that the platform remains decentralized and community-driven. On-chain governance also promotes transparency and accountability, as all decisions and voting records are stored on the blockchain, making them immutable and auditable. By involving the community in the governance process, decentralized finance platforms can achieve a higher level of trust and legitimacy.
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