Governance Model

Definition ∞ The established framework and set of rules by which a decentralized system or organization makes decisions and operates. This defines how participants interact, propose changes, and reach consensus on protocol upgrades or operational adjustments. Effective governance models are crucial for the long-term sustainability and decentralized nature of blockchain projects.
Context ∞ Discussions around governance models are prevalent when new proposals are introduced for protocol changes or when debates arise about decision-making processes within decentralized autonomous organizations (DAOs). News coverage often analyzes the effectiveness, fairness, and potential vulnerabilities of different governance structures, impacting investor confidence and project development.