What Is Governance Token?

A governance token grants holders voting rights on protocol decisions such as fee structures, treasury allocation, and upgrade proposals. Examples include UNI (Uniswap), AAVE (Aave), and COMP (Compound). Whale accumulation of governance tokens can signal intent to influence protocol direction or expectation of value appreciation from upcoming governance decisions. Sonar Tracker classifies governance token transactions and tracks whale voting power concentration, giving traders insight into which protocols may see significant governance-driven changes.