The term “governance” in the cryptocurrency world refers to the groups or individuals who have the authority to make decisions about a given project.
All cryptocurrency projects must have a strong sense of governance. Because cryptocurrencies are built on decentralized blockchains, they often have a very liberal governance structure.
In blockchains, on-chain governance is one of the primary voting structures. Blockchain projects with on-chain governance have rules in place that govern who can participate in voting and make decisions.
In addition to on-chain governance, many cryptocurrency projects employ off-chain governance. Off-chain governance is used for both Bitcoin and Ethereum. Developers, blockchain miners, users and business supporters can participate in decision-making.
Governing a crypto project is critical because it determines who has the authority to make decisions. In both cases, there are benefits and drawbacks; however, the distribution of voting rights on the blockchain is becoming increasingly popular.