Coin-Weighted Voting

Definition ∞ Coin-weighted voting is a governance mechanism where an individual’s voting power within a decentralized autonomous organization or protocol is proportional to the quantity of a specific cryptocurrency they possess. This system grants greater influence to larger token holders when deciding on protocol upgrades, treasury allocations, or other critical proposals. The approach directly links economic stake to decision-making authority, intending to align the interests of those with the most investment with the long-term success of the project. It represents a common method for on-chain governance in digital asset ecosystems.
Context ∞ The state of coin-weighted voting in decentralized governance frequently sparks debate regarding equitable representation and potential centralization of power. Critics contend that it could lead to plutocratic control, where a few large holders dictate outcomes. Future developments in this area include proposals for hybrid governance models that incorporate additional factors beyond token holdings, aiming to foster broader participation and prevent undue influence by whales.