What is LGT?

What is a liquid governance token (LGT)?

A Liquid Governance Token (LGT) is a tokenized representation of governance power that stays liquid, meaning holders can freely trade or transfer it without having to unlock or unstake the underlying governance tokens.

In most governance models, locking tokens for maximum governance weight comes at the cost of flexibility: once locked, you cannot exit until the lock period expires. LGTs solve this problem by allowing users to participate in governance while enabling holders to enter or exit at any time through secondary markets.

Key benefits of LGTs:

• Liquidity: Sell or swap at any time without waiting for lock expiration.

• Composability: Can be used in DeFi protocols while still holding governance weight.

• DAO protocol revenue share mechanics are baked in to the LGT, making it value accruing.