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This year, governance has become one of the hottest topics in decentralized finance (DeFi), thanks to the issuance of a swathe of governance tokens at some of DeFi’s most significant projects. These include lending platforms and decentralized exchanges (DEXs), which have seen their market caps soar since the spring.
A governance token gives holders voting rights over proposed revisions to smart contracts at issuing protocols, allowing them to have their voices heard when making changes to how that protocol operates. Some cryptos holders also benefit from a share of protocol fees, trading fees, and other rewards, particularly those issued by DEXs.
Thus, the YFI has risen from $790 at launch in July 2020 to close to $25,000 by December 2020, representing a market cap of $740 million.
Why are governance tokens necessary?
These cryptos extend the core tenet of decentralization. Digital assets and the blockchain networks they operate on are driven by the fundamental goal of decentralizing and democratizing the storage and transfer of value within peer-to-peer ecosystems.
Such tokens decentralize the decision-making process of a blockchain project or protocol, enforcing community decisions by code. A blockchain protocol that implements them ensures that invested stakeholders can only make future development of the protocol.
Best governance tokens in 2022
Since such crypto stays true to the original philosophy of DeFi, they carry a special place in the hearts of current blockchain and crypto enthusiasts. These cryptos are here to stay, and the following is the list of some of the upcoming and promising tokens in the crypto domain.
Nimbus Governance Token (GNBU)
It is a platform that allows every market participant to apply financial and investment tools to generate income. This includes P2P lending, IPOs, crypto arbitrage trading, crowdfunding, etc. Only token holders can take full advantage of this product.
It offers two types of coins:
- Utility token NBU
- Governance token GNBU
NBU provides access to all platform tools.
GNBU price chart
Price prediction 2025
The crypto price is expected to reach a minimum of $1.66 with a maximum value of $2.07 by 2025. At the same time, its average price will remain at $1.72.
Many platforms and analysts think that the price of this crypto will continue to grow in the next five years, surpassing the $2.46 mark by the end of 2025. Even though the price seems like a stretch, you never know.
Synthetix (SNX)
It is a decentralized platform that issues ETH-based synthetic assets. These assets differ because they track tangible assets like currencies, commodities, etc. In December of 2019, the platform announced a shift to decentralized governance, and the token holders have eventually taken control of the treasury and protocol itself.
SNX price chart
Price prediction 2025
This crypto has occasionally proven to be a decent investment. Aside from the technology, it is one of the most promising blockchain initiatives in terms of application cases as well. In addition, the blockchain is being used in a variety of real-world applications, enhancing its value.
It is very volatile and can change direction. Many platforms and analysts think that the price of this crypto will continue to grow in the next five years, surpassing the $15.26 mark by the end of 2025. Even though the price seems like a stretch, you never know.
Compound (COMP)
It is presently the most significant governance token per market cap. The token gives its community of holders the ability to vote on critical changes to this crypto. It can also be delegated to others for voting.
COMP price chart
Price prediction 2025
Many platforms and analysts think that the price of this crypto will continue to grow in the next five years, surpassing the $839.19 mark by the end of 2025. Even though the price seems like a stretch, you never know.
Balancer (BAL)
Crypto investors can see many similarities with Uniswap. This is another automated market-maker based on the ERC 20 smart contract system. But unlike the latter, which makes it possible to create liquidity pools only with two tokens, Balancers offer pools with many coins. Users can add up to eight different tokens.
This coin gives crypto investors access to the platform’s functionality and allows them to decide the future of the project. Token holders and company officials can vote on product development and its aspects.
BAL price chart
Price prediction 2025
Consider investing in this crypto if you are considering digital currencies. A long-term investment in the currency may prove to be highly beneficial. And it’s projected to hit its all-time high in the next few years if everything goes well.
Many platforms and analysts think that the crypto price will continue to grow in the next five years, surpassing the $68.50 mark by the end of 2025. Even though the price seems like a stretch, you never know.
Kyber Network (KNC)
Crypto investors, who always sought to conduct decentralized trades, have received this opportunity at the expense of this crypto. This company has created a unique on-chain liquidity aggregator designed to solve a similar problem in the DeFi sector. And starting from the middle of 2020, users have the opportunity to influence the future of the project directly.
Each investor who has this crypto can participate in voting and managing the network. The company also rewards active community members with a large number of coins. Crypto enthusiasts should buy this crypto and take advantage of this governance token.
KNC price chart
Price prediction 2025
This crypto has occasionally proven to be a decent investment. Aside from the technology, it is one of the most promising blockchain initiatives in terms of application cases as well. In addition, the blockchain is being used in a variety of real-world applications, enhancing its value.
Many platforms and analysts think that the price of this crypto will continue to grow in the next five years, surpassing the $9.58 mark by the end of 2025. Even though the price seems like a stretch, you never know.
Final thoughtsÂ
With the rise of governance tokens like the ones above will come factions, and from these factions will come protocol politicians, who will approach the newfound politics of these platforms in different ways.
This is just a taste of what’s to come, too; the potential of this political arena is now just beginning to take shape, just as the broader sector is.
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