Web3 governance refers to the systems that allow people to influence and choose in a blockchain network or DAO (Decentralized Autonomous Organization). Governance is usually done through voting systems which are token-based. Suggest and vote on changes, so that decision-making is decentralized, transparent, and shared control over protocols and applications.
At the core of Web3 governance are token-based voting systems, which enable users to propose, discuss, and vote on changes to a project’s rules or operations using governance tokens. Most often, the token votes are proportional to the amount of tokens held and the token often represents a stake in the project.
DAOs are one of the best examples of governance in action with this architecture as users can directly influence how the ecosystem develops, from adding new features to allocating treasury monies to changing technical protocols. They have no centralized leadership, instead they choose based on token holders. Community-focused proposals could be things like funding new development projects, and operational changes could be anything from changing interest rates of a DeFi protocol, etc.
Web3 governance solutions log all votes, ideas, and decisions on the blockchain to encourage transparency, and smart contracts often automatically carry out the decisions made by these votes, ensuring the changes are clear, unchangeable, and error-free. This ensures that all participants can audit the procedure, and so builds community trust.
Additionally, the governance is decentralized; this means there is only shared power among a broad number of people; making it immune to one person (or body) censoring or controlling.