A governance system is the structured set of rules, roles, and processes by which a blockchain protocol or organisation makes collective decisions about its parameters, upgrades, and resource allocation. It defines who can propose changes, how they are ratified, and how outcomes are enforced and recorded. In blockchains it is integral to protocol evolution and to the auditability of decisions.
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- Governance can be on-chain, where votes directly trigger parameter changes, or off-chain, where social consensus and core-developer coordination drive upgrades adopted by node operators. Key design dimensions include voting power distribution, quorum and threshold rules, proposal lifecycles, and safeguards against capture or low participation. Recording proposals and outcomes immutably provides accountability and a verifiable history of how the system evolved.