Definition ∞ Decentralized Exchange Governance is the system through which a decentralized exchange (DEX) is managed and updated, typically empowering token holders to vote on proposed changes. This framework distributes decision-making authority among the community, rather than centralizing it with a single entity. It allows for collective input on protocol parameters, fee structures, and future development directions. This ensures community-driven evolution.
Context ∞ Discussions surrounding decentralized exchange governance frequently appear in crypto news, particularly concerning the implementation of new features, adjustments to trading fees, or the allocation of treasury funds. The effectiveness and inclusivity of these governance models are often scrutinized, with concerns sometimes raised about voter apathy or the concentration of voting power. Community participation remains a key metric for evaluating the health of a DEX.
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