Governance is an essential component of any Web3 project
Smart contracts and tokens distribute power amongst token holders. This is called governance. Web3 makes governance possible because anyone holding a governance token will receive the right to vote on propositions and to participate in decisions regarding protocols.
Most governance protocols are organized in the form of a DAO (Decentralized Autonomous Organization). The general concept of such an organization is to allow a virtual entity that has a certain set of members or shareholders to have the right to spend the entities funds and modify its codes (protocols).
Broadly speaking, DAOs or Web3 governance platforms are governance structures. They are structured like a private limited company or a co-op, but unlike these traditional structures, the decisions are coordinated and enforced on a blockchain.
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