Vetoken Governance Model

Definition ∞ A Vetoken governance model utilizes vote-escrowed tokens, where users lock up their tokens for a specified period to gain enhanced voting power and potentially higher rewards. The longer the lock-up duration, the greater the governance influence and incentives received. This mechanism aligns user incentives with the long-term success of the protocol. It encourages active and committed participation in decentralized decision-making.
Context ∞ The Vetoken governance model is a prominent feature in many decentralized finance protocols, aiming to strengthen community involvement and reduce short-term speculative behavior. News often discusses the effectiveness of these models in achieving true decentralization and preventing hostile takeovers. Understanding the Vetoken governance model is crucial for evaluating the long-term stability and democratic principles of various digital asset projects.