The world of crypto has shown incredible growth over the past few years in terms of valuation, technological innovation, adoption.

The increasing adoption also comes with demands for more innovative ideas to flow into the space that benefit the investors and project owners alike. Governance tokens are one of these innovative ideas which are slowly getting traction. 

What are governance tokens?

Governance tokens in simplified terms are assets that give you a stake in a particular protocol. Getting a hold of these tokens allows you to influence the decisions pertaining to the core protocol.

Any software implementation, update, or technological changes in the project can be influenced by these token holders mainly through voting procedures. These tokens promote true democracy within the system as no centralized party makes the decisions.

Due to the utility of these tokens, they appreciate rapidly. For example, Uniswap's governance token UNI was launched later in 2020 at around $1 and the currency is currently trading at over $30. This is over 30x growth in less than a year.

Apart from this, there are other schemes through which some DeFi governance tokens allow users to gain profit. COMP token, for example, has a yield farming ecosystem. A user can lock his tokens to increase the liquidity of the system and get a number of tokens as a reward. 

Particular governance tokens also offer an array of other use cases, such as taking out a secured loan in a completely trustless way. 

All of this utility is provided in addition to the basic governance powers that the project gives its users. This means that without interference from the executive team of the project you can propose changes to the protocol, debate, and vote on whether to implement changes suggested by others.

But the utility and profit generation of such tokens doesn't stop there. Other projects have taken a rather creative approach to the profitability part of the consumers. GNBU - the governance token of the Nimbus DeFi Platform - opens doors for users with a set of benefits other than price appreciation. 

This includes getting cuts from over 10 revenue streams generated by 4 Nimbus dApps that shall be launched in the coming months and enable:

  • Classic IPO participation through crypto 
  • Peer-to-peer lending for users with different risk appetite
  • Startup financing with access to equity and convertible notes of future unicorns
  • Crypto Arbitrage-Trading, the centralized version of which has already been used by 50,000 users

With such a diverse set of dApps generating the revenues for GNBU holders, it’s no surprise that GNBU market value has more than tripled in just 2 days from launch. 

On March 17, GNBU gets listed on Uniswap - the largest decentralized exchange in the world. So, getting a hold of the GNBU token at this stage might give users the possibility of getting huge returns by trading only. 

Furthermore, Nimbus also aims to bridge the gap between traditional markets and cryptos by getting listed on a major North American stock exchange by the end of 2021. Since the platform has a user base of over 50,000 users, their governance token is set to grow. So, this one's a prime example of a governance token that you should keep an eye on.

Other platforms that are contributing to the DeFi space with their concept of governance include Kyber, MakerDao, Synthetix, Aave, Balancer, etc. The growing community of these projects ensures that the idea of governance tokens will attract a plethora of projects that would enter the crypto DeFi space. 

All-in-all, crypto projects and startups are contributing to innovation which is increasing the adoption. Be it NFTs, DeFi products, dApps, or governance tokens, the ideas of innovation, use cases, and profitability are what attract new users to the market. 

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at are those of the individual authors and do not necessarily represent the opinion of or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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