When Cleisthenes first introduced democracy to ancient Athens, the general idea was to give the common man a chance to represent themselves in the assembly and vote for laws that would govern the state. Today, these concepts have even seeped into the world of cryptocurrencies and blockchain technology.
With the spirit of voting strong with everyone at the moment, it’s definitely time to give more light to these governance tokens.
What are governance tokens?
Governance tokens are tokens on cryptocurrency / blockchain networks that enable owners to participate in the decision-making of the project. Owners of these tokens typically gain voting rights and can join the rest of its community in voting campaigns that decide on its direction.
Trading for governance tokens at Coinhako
Today, the existence of such tokens has grown exponentially and at Coinhako, we have several of them listed on our platform for trading.
1. Maker (MKR)
MakerDAO, was one of the first Decentralized Autonomous Organizations (DAO) that was introduced in 2015. MakerDAO’s native token, MKR, is an integral part of the ecosystem where it serves as the governance token.
MKR holders can play a vital role in managing the stability and security of the platform, by locking their MKR tokens as collateral for the issuance of DAI stablecoins.
MKR holders can also participate in shaping the risk management framework and deciding on critical parameters like stability fees.
2. Compound (COMP)
The Compound protocol has become synonymous with decentralized lending and borrowing.
What sets Compound apart is the governance aspect facilitated by its native token, COMP. Holders of COMP have the power to propose and vote on protocol upgrades, including the addition of new assets, changes to interest rates, or modifications to the protocol's codebase. This unique system of community governance ensures that Compound evolves in a decentralized and inclusive manner.
3. Aave (AAVE)
Aave, another prominent player in DeFi, operates a decentralized lending platform.
Its governance token, AAVE, provides holders with voting rights and rewards for participation. AAVE holders can influence important parameters such as the listing and collateralization of assets, fee structures, and propositions for protocol improvements. Aave's governance module introduces an engaging and democratic approach to shaping the future evolution of the platform.
4. Uniswap (UNI)
Uniswap, one of the most well-known decentralized exchanges (DEXs), introduced its governance token, UNI, in September 2020.
UNI holders play a crucial role in deciding the protocol's direction, voting on proposals related to fee structures, listing new trading pairs, and even modifying governance parameters. By enabling community-led governance, Uniswap achieves a more inclusive and decentralized decision-making process.
5. Synthetix (SNX)
Synthetix is a trailblazer in the creation of synthetic assets on the blockchain. Its native token, Synthetix Network Token (SNX), has a dual purpose: staking and governance.
SNX holders stake their tokens as collateral to enable the issuance of synthetic assets. Alongside that, they actively participate in governing the protocol. SNX holders can suggest improvements, vote on proposed changes, and adjust collateralization ratios—all of which contribute to maintaining the stability and security of the Synthetix ecosystem.
How to start voting with these crypto?
At Coinhako, we offer our users one of the most reliable ways to access the crypto-economy with our renowned fiat on / off ramp services.
Users can gain access to these governance tokens by trading with SGD, USD and other crypto pairings.
- Sign up for a Coinhako account
- Fund your account or go straight to ‘Trade’ your crypto of choice
- Select the payment method
- Make the trade!
Thereafter, you can send your coins to a wallet provider that allows you to tap into the networks and / or is supported by any of these cryptocurrencies / blockchain projects from Coinhako.
The rise of governance cryptocurrencies has brought about a profound paradigm shift in the realm of decentralized finance. Projects like Maker, Compound, Aave, Uniswap, and Synthetix have successfully leveraged the power of their governance tokens to empower the crypto community.
By involving participants in decision-making processes, these projects promote decentralization, transparency, and inclusion.
Interested in shaping the future of cryptos?
Sign up for a Coinhako account
Disclaimer: All writers’ opinions are their own and do not constitute financial advice. As a company, we do our best to provide information that is accurate and valuable. The contents of this blog post are intended for educational purposes only. Individuals are advised to perform due diligence before purchasing any cryptocurrencies as these assets are subject to high volatility, and understand the risks associated with trading cryptocurrencies.