I recently earned around $200 with three airdrops: Wallet Connect (WCT), Hyperlane (HYPER), and Zora (ZORA). As everyone in that case, I started to wonder if I'd better HODL or dump those tokens. After having read an interesting article on this topic, I decided to dump them. Watch details below:

However, I’ve noticed something troubling in the crypto space that does not only concern the airdrops, but more generally the so-called "governance tokens". Governance tokens, which are supposed to give holders a say in how decentralized projects operate, have become little more than tools for projects to print money and create hype. Sure, some governance tokens genuinely aim to decentralize decision-making, but let’s be honest—most are just marketing gimmicks designed to inflate prices and attract investors. By April 23, 2025, it’s clearer than ever that many of these tokens haven’t lived up to their promises.

While most governance tokens have seen dwindling participation and declining relevance, a few exceptions like AAVE stand out. Why? Because AAVE has managed to stay relevant by combining a profitable protocol with fee-switch mechanisms that incentivize token holders to engage. But before we dive into that, let’s break down why so many governance tokens have failed—and why AAVE might be one of the rare success stories.

What Are Governance Tokens Again?

In theory, governance tokens allow users to vote on decisions within blockchain projects or decentralized autonomous organizations. For example, if you hold MKR tokens from MakerDAO, you can technically influence how the protocol manages its stablecoin, DAI. Sounds great, right? But here’s the reality: most people holding governance tokens don’t even participate in voting. They’re just speculating on price movements, hoping to flip their bags for profit.

And then there are the airdrops—mass distributions of free tokens to users who interacted with a platform. These airdrops often come with the label “governance,” but how much actual governance happens? Not much.

Airdropped Governance Tokens: The Hype Train That Derails

Take Optimism (OP), for instance. When Optimism launched its Layer 2 scaling solution, it airdropped its OP governance token to early users. At first, everyone was excited. Free tokens! Decentralized decision-making! But fast forward to today, and OP has largely faded into obscurity. Most recipients of the airdrop likely sold their tokens immediately after claiming them, leaving the project’s ecosystem weaker than before.

Then there’s Arbitrum (ARB). When Arbitrum distributed its ARB token, it was hailed as a step toward decentralized governance. But guess what? Participation rates remain abysmally low. Like OP, ARB holders seem more interested in dumping their tokens than participating in governance.

AAVE: The Exception to the Rule

So why does AAVE stand out? Simple: it’s one of the few projects where governance tokens actually matter. AAVE’s fee-switch mechanism allows the protocol to generate revenue, which is then distributed to token holders who participate in governance. This creates a real incentive for users to engage, rather than just speculate.

In contrast, most governance tokens lack any tangible utility beyond voting rights—which, as we’ve seen, are rarely exercised. Without mechanisms like AAVE’s fee-switch, these tokens often become little more than digital lottery tickets wrapped in buzzwords.

The Bigger Picture: Printing Money Disguised as Decentralization

Here’s what I’ve learned: governance tokens are often just a smokescreen. Many projects slap the “governance” label onto their tokens to justify inflationary supply schedules and attract venture capital funding. Instead of fostering true community-driven decision-making, these tokens serve as marketing tools designed to pump prices temporarily.

Even worse, airdropped governance tokens often lead to short-term speculation rather than long-term engagement. Most recipients cash out as soon as they can, leaving the project’s ecosystem weaker than before.

Final Thoughts: Buyer Beware

Governance tokens aren’t inherently bad—in fact, they hold immense potential for creating truly decentralized ecosystems. However, the majority of projects treat them as cash-grabs rather than mechanisms for meaningful change. Before jumping into any governance token, ask yourself:

- Does this project genuinely need decentralized decision-making?
- Will my vote actually matter, or will whales call the shots?
- Is the token’s value tied to real-world utility, or is it purely speculative?

If you can’t answer those questions confidently, chances are you’re better off steering clear. After all, not every shiny token labeled “governance” deserves a spot in your portfolio—not when most are little more than digital lottery tickets wrapped in buzzwords.

So next time someone pitches you a governance token, remember: looks can be deceiving.