Definition ∞ A governance parameter change refers to an alteration in the operational rules or settings of a decentralized protocol, decided by its community or token holders. These changes can affect critical aspects such as transaction fees, interest rates in lending protocols, collateral requirements, or the distribution of protocol rewards. Decisions are typically made through a voting process where token holders propose and approve modifications, reflecting the decentralized control of the system. The implementation of such changes is often executed via smart contract upgrades.
Context ∞ Governance parameter changes are a fundamental aspect of decentralized autonomous organizations (DAOs) and protocol evolution, allowing systems to adapt to market conditions and community needs. A significant discussion involves achieving sufficient participation and preventing malicious actors from manipulating voting outcomes. Future efforts will likely concentrate on designing more robust and efficient governance frameworks that balance security with responsiveness and inclusivity.
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