Liquid Governance

Definition ∞ Liquid governance is a decentralized governance model that allows token holders to delegate their voting power to another participant, who then casts votes on their behalf. This delegation can be revoked or changed at any time, providing flexible and dynamic participation in protocol decision-making. Its aim is to enhance voter engagement and leverage specialized knowledge within a decentralized autonomous organization. This system promotes adaptive representation.
Context ∞ Liquid governance is an evolving area within DAO structures, seeking to address challenges such as voter apathy and potential centralization of influence in decentralized systems. Discussions often focus on finding an optimal balance between direct participant voting and the benefits of informed delegation. Its impact on protocol evolution is substantial.