Coin Voting

Definition ∞ Coin voting is a governance model where voting power correlates with the quantity of tokens held. This system permits token holders to participate in protocol decisions, such as upgrades or parameter adjustments, by allocating their digital assets to proposals. The weight of each vote is directly proportional to the amount of cryptocurrency a participant possesses, influencing the outcome based on economic stake. This method aims to align incentives, ensuring that those with the most investment have a substantial voice in the network’s future.
Context ∞ Coin voting faces ongoing discussion regarding its susceptibility to whale concentration, where a few large holders might disproportionately sway decisions. Efforts to mitigate this include quadratic voting or other mechanisms designed to distribute influence more broadly. The effectiveness of coin voting in achieving true decentralization and fair governance remains a central topic in blockchain development and news reporting.