This year, governance tokens, which empower users to influence the development of DeFi projects, have emerged as major successes within the Ethereum community.
Indeed, as of now, the cumulative value of these governance token projects has soared to over $4.3 billion USD. Ethereum’s top 8 DeFi To put this in perspective, the market cap of bitcoin currently stands at $169 billion, with ether at $26 billion, XRP at $6 billion, and bitcoin cash at $4 billion.
This surge indicates that governance tokens are becoming more prominent in the crypto world by enabling direct involvement in the control of DeFi platforms. However, many people are still in the dark about these tokens and their functions. To shed light on the key players in Ethereum's governance token scene, let's delve into the prominent and emerging tokens, Curve's CRV and mStable's MTA.
COMP
Market cap : $1.68 billion
Current total supply : 10,000,000
Current price : $168
Presently, COMP, belonging to the Compound money market protocol, ranks as the governance token with the largest market cap. It grants its holders the power to vote on significant modifications to Compound, and COMP can also be delegated to others for voting purposes.
As Compound flourished as a hub for decentralized lending and borrowing, its popularity in DeFi was well established even before its governance token, COMP, was released in June 2020. Since its launch, the introduction of COMP liquidity mining, which allows users to earn tokens based on their activities, has significantly enhanced Compound's stature as a leading DeFi dApp, boasting nearly $700 million in assets locked within its protocol currently.
SNX
Market cap : $669.6 million
Current total supply : 194,006,803
Current price : $3.45
SNX serves as the core token for Synthetix, a decentralized platform designed for issuing Ethereum-based synthetic assets that can mimic real-world assets like currencies, commodities, and more. announced a transition In December 2019, Synthetix embarked on its journey towards decentralized governance, initially entrusting a handful of significant stakeholders with control over the project's treasury, before SNX token holders assumed control.
Beyond governance, SNX holds other functionalities as users can secure SNX as collateral to mint Synths like sUSD, representing synthetic USD. This demonstrates that SNX is not solely a governance token but is evolving to encompass this role more comprehensively.
MKR
Market cap : $447.4 million
Current total supply : 1,005,577
Current price : $444.93
MKR, the governance token that lies at the heart of MakerDAO's popular DeFi lending and stablecoin venture, was the inaugural governance token in the DeFi space.
Its influence has subsequently inspired a myriad of other projects to pursue decentralized governance, providing a benchmark by which these contemporary initiatives evaluate their own governance tokens.
LEND
Market cap : $385.5 million
Current total supply : 1,299,999,942
Current price : $0.30
MKR plays a crucial role in voting on pivotal adjustments to the Maker protocol, such as approving new forms of collateral.
Currently, MKR lacks an integrated vote delegation feature akin to COMP but is actively working towards incorporating this capability. In comparison with many of its counterparts, MKR is notably deflationary since fees paid in MKR to the Maker protocol are burnt.
KNC
Market cap : $333.8 million
Current total supply : 210,552,294
Current price : $1.59
LEND plays a dual role as both a collateral and a governance token for Aave, a rising force in the decentralized borrowing and lending scenes on Ethereum. most popular Similar to Compound in its offerings, Aave distinguishes itself with unique options such as flash loans and credit delegation, allowing users to permit others to borrow against their collateral.
BAL
Market cap : $294 million
Current total supply : 35,870,000
Current price : $8.20
When you stake LEND, it not only grants voting rights but also entitles holders to a share of the fees generated by the Aave protocol. Additionally, these staked LEND tokens act as a safeguard for Aave during large-scale liquidation events.
BZRX
Market cap : $286 million
Current total supply : 1,030,000,000
Current price : $0.28
KNC forms the backbone of the Kyber Network, functioning as the native token for this on-chain liquidity aggregator protocol that facilitates decentralized trading. In July 2020, Kyber initiated the Katalyst upgrade along with KyberDAO, thereby enabling users to stake KNC for earning voting rewards and to participate in guiding the Kyber Network. v3 token model Kyber, notably, stands among Ethereum's decentralized exchanges.
UMA
Market cap : $187.3 million
Current total supply : 100,312,319
Current price : $444.93
Balancer, functioning as an Ethereum-based automated market maker (AMM), shares some similarities with Uniswap.
CRV
(Stats TBD)
While Uniswap offers two-token liquidity pools, Balancer extends the possibility of forming pools with up to 8 different ERC20 tokens. BAL serves as Balancer's governance token, empowering holders to shape the protocol's trajectory.
MTA
(Stats TBD)
The project, newly launched, also features a liquidity mining campaign, where Balancer users receive BAL rewards on an ongoing basis.
Conclusion
bZx, a decentralized protocol supporting both lending and margin trading, is driven by its team behind the Fulcrum and Torque platforms. protocol politicians This summer, the team unveiled BZRX, bZx's governance token, which can be staked to earn protocol fees, along with Balancer fees and BAL rewards by serving as a liquidity provider within Balancer pools.
UMA emerged in April 2020 as the governance token of the UMA protocol, capable of creating a diverse array of synthetic, 'priceless' assets. DeFi platforms These unique assets are considered priceless as they significantly reduce oracle reliance by not depending on an on-chain price feed.
Consequently, UMA token holders are granted the authority to determine crucial protocol parameters, supported asset types, and more.
