Governance tokens are the heart of decentralized decision-making in Web3. Whether you're building a DAO, launching a decentralized app, or experimenting with community-driven projects, governance tokens give your users voting power and influence.
The best part? You can create and distribute governance tokens without spending a cent.
This article walks you through the zero-cost route to building a governance token from scratch, using free tools, test networks, and battle-tested open-source code.
What Is a Governance Token?
A governance token is a type of cryptocurrency that gives holders the right to vote on proposals that affect the direction of a project. These decisions can include:
- Protocol upgrades
- Budget allocations
- New features
- Treasury management
Governance tokens are typically built on Ethereum using the ERC-20 standard, often combined with additional functionality for voting and delegation.
Step 1: Use OpenZeppelin’s Free & Secure Contracts
You don’t have to reinvent the wheel. OpenZeppelin provides audited and secure contract templates that are ideal for governance tokens.
For basic governance functionality, use:
ERC20Votes-
Governormodules (if you're going full DAO)
Here’s a minimal governance token example:
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;
import "@openzeppelin/contracts/token/ERC20/extensions/ERC20Votes.sol";
contract GovToken is ERC20Votes {
constructor() ERC20("GovToken", "GOV") ERC20Permit("GovToken") {
_mint(msg.sender, 1000000 * 10 ** decimals());
}
}
✅ Why it's secure: OpenZeppelin contracts are widely used and thoroughly vetted.
✅ Why it’s free: These libraries are open-source and cost nothing to use.
Step 2: Deploy for Free on Ethereum Testnets
Before going live on a mainnet, deploy your token on a testnet like:
- Sepolia
- Goerli
- Holesky
Use Remix (a free in-browser IDE) and MetaMask to connect to a testnet. You can claim free test ETH from faucets to cover "fake" gas fees.
✅ Why it’s free: Testnets simulate the Ethereum network without real costs.
✅ Why it’s useful: You can test your governance token as if it were live.
Step 3: Add Governance Logic
If you’re building a DAO or a system with actual proposals and voting, you’ll need to add governance mechanisms.
OpenZeppelin provides Governor contracts with modular components:
-
GovernorCountingSimple -
GovernorVotes GovernorTimelockControl
This lets you create full DAO-style governance with proposal creation, voting, and time-delayed execution.
✅ Why it's free: These modules are 100% open source.
✅ Why it's secure: Based on audited patterns used by real DAOs like Compound and ENS.
Step 4: Use Free Tools to Distribute Tokens
You can distribute your governance tokens using:
- Manual transfers (from Remix or a script)
- Claim portals using open-source UIs like Scaffold-ETH
- Snapshot.org for off-chain voting, no gas needed
✅ Snapshot is gasless and free to use
✅ Scaffold-ETH gives you a free, hackable UI template
If you’re using testnets, all of this is completely cost-free.
Step 5: Create a DAO on a Budget
You can build a functioning DAO with:
- Governance token (from above)
- Snapshot page (free)
- Telegram or Discord (free)
- Notion site or GitHub Pages (free)
- Off-chain discussion (Discourse, Reddit, etc.)
You don’t need funding to prove your concept. Once your governance model works on testnets, you can apply for grants or go live on a low-fee chain.
Pro Tips for Zero-Cost Governance
- Fork from working examples like NounsDAO, Moloch, or Compound
- Avoid mainnet until ready — gas fees can eat up your budget fast
- Test everything: simulate proposals, votes, quorum thresholds, and timelocks
- Keep it transparent: post all contracts and updates to GitHub
When You’re Ready to Go Live
Eventually, you might want to launch on a low-cost network like:
- Polygon
- Arbitrum
- Optimism
- Celo
- Base
These chains offer low gas fees, Ethereum compatibility, and often provide free grants or community support for new projects.
Need a Full Guide?
If you want a complete step-by-step tutorial—covering governance tokens, native coins, ERC-20 tokens, and even how to customize mining rules—I’ve written a comprehensive, beginner-friendly PDF just for you.
📘 My complete guide, available for just $10
It’s packed with practical advice, code examples, deployment tips, and real-world insights for crypto creators.
Whether you're launching your first token or building a whole ecosystem from scratch, this guide can save you hours of trial and error.
Thanks for reading! If you enjoyed this, drop a comment or share your experience with governance tokens—especially if you're building on a budget.
Top comments (2)
pretty cool how you can set all this up without spending much tbh - took me forever to learn all that stuff on my own lol
Thanks. As with almost anything, it can be done for free if you have to. The PDF file will help a lot, if you are planning a serious project or just want to create something for the hell of it.