What are the most common DAO tokens and how do they work?

DAO tokens are a crucial component of decentralized autonomous organizations, or DAOs, which are blockchain-based entities that operate according to predefined rules and collective decision-making. DAO tokens represent the rights and responsibilities of the members of a DAO, such as voting, governance, rewards, and access. In this article, we will explore some of the most common DAO tokens and how they work.

1 Maker (MKR)

Maker is a DAO that manages the Maker Protocol, a decentralized lending platform that allows users to borrow stablecoins called Dai against various types of collateral. MKR is the governance token of the Maker Protocol, which means that MKR holders can vote on key parameters and proposals that affect the system, such as interest rates, collateral types, and risk management. MKR also serves as a backstop for the system, as it can be minted or burned to balance the supply and demand of Dai and maintain its peg to the US dollar.

Add your perspective

Dmytro Romaniuk

Crafting Bespoke AI & Web3 Solutions That Streamline Businesses | CEO & Founder @OmiSoft
Report contribution
Maker (MKR) is like the boss of a DeFi lending platform called the Maker Protocol. This platform allows people to borrow a stablecoin called Dai by putting up collateral. MKR holders get to vote on stuff like interest rates, what you can use as collateral, and how risky things can get. MKR also acts as the emergency fixer. If things go out of whack and Dai's value strays from the US dollar, MKR tokens can be created or destroyed to balance things out. But, it's not all sunshine. Managing all this is complex, and if the Maker Protocol messes up, MKR's value can take a hit. It's a vital piece in the DeFi puzzle, and its decisions affect a lot of other DeFi projects. So, it's like the heart of decentralized finance.

Like

2 Compound (COMP)

Compound is a DAO that oversees the Compound Protocol, a decentralized money market that enables users to lend and borrow various crypto assets. COMP is the governance token of the Compound Protocol, which gives COMP holders the ability to propose and vote on changes to the protocol, such as adding new markets, adjusting interest rates, and upgrading the code. COMP also rewards users who supply or borrow assets on the protocol, as they receive a proportional share of the COMP distribution.

Add your perspective

Mohammad Humaid

Head of SEO at CryptoWallet.com | ex-TransferWise
Report contribution
Compound (COMP) allows users to lend and borrow cryptocurrencies and earn interest or pay fees. It is one of the leading projects in the decentralized finance (DeFi) industry, with over $10 billion of assets locked in its smart contracts. Compound uses a governance token called COMP, which gives holders the right to propose and vote on changes to the protocol. Compound supports nine different crypto assets, including ETH, DAI, USDC, WBTC, and UNI. Each asset has its own interest rate, which is determined by supply and demand in the market.

Like

3 Uniswap (UNI)

Uniswap is a DAO that runs the Uniswap Protocol, a decentralized exchange that allows users to swap any pair of ERC-20 tokens without intermediaries or fees. UNI is the governance token of the Uniswap Protocol, which grants UNI holders the power to vote on the development and direction of the protocol, such as allocating funds, upgrading features, and integrating new standards. UNI also incentivizes users who provide liquidity to the protocol, as they receive a portion of the UNI emission.

Add your perspective

Dylan Hatten

BD Veteran | ON-CHAIN Enthusiast | Exploring Web3
Report contribution
To get a proposal passed by the Uniswap DAO it would take you roughly 20 days Phase 1 - Request for comment - 7 days Phase 2 - temp check - 5 days Phase 3 - governance proposal- 9 days They use the phases to filter out the “junk”

Like

4 Aave (AAVE)

Aave is a DAO that controls the Aave Protocol, a decentralized lending and borrowing platform that offers innovative features such as flash loans, rate switching, and collateral swapping. AAVE is the governance token of the Aave Protocol, which enables AAVE holders to vote on various aspects of the protocol, such as adding new assets, setting risk parameters, and allocating reserves. AAVE also rewards users who deposit or borrow assets on the protocol, as they earn a slice of the AAVE distribution.

Add your perspective

5 Aragon (ANT)

Aragon is a DAO that facilitates the creation and management of other DAOs, by providing a modular and customizable framework for building and operating decentralized organizations. ANT is the governance token of the Aragon Network, which is a meta-DAO that governs the Aragon Protocol, a decentralized court system that arbitrates disputes between DAOs and their members. ANT holders can vote on the policies and parameters of the Aragon Network, such as fees, incentives, and jurors. ANT also allows users to participate in the Aragon Network DAO, which is a treasury and decision-making body for the Aragon ecosystem.

Add your perspective

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

Add your perspective

Arslan Habib®
Report contribution
🤝 DAO (Decentralized Autonomous Organization) tokens are key players in the crypto world! Common examples include $DAO, $MKR, and $COMP. These tokens represent ownership and voting power within DAOs. Holders can propose and vote on decisions, shaping the organization's future. Each token equals a voice, making DAOs a democratic force in the crypto space! 🗳️💱

Like

What are the most common DAO tokens and how do they work?

1

2

3

4

5

6

1 Maker (MKR)

2 Compound (COMP)

3 Uniswap (UNI)

4 Aave (AAVE)

5 Aragon (ANT)

6 Here’s what else to consider

Blockchain

Rate this article

Thanks for your feedback

More articles on Blockchain

More relevant reading

What are the most common DAO tokens and how do they work?

1

2

3

4

5

6

1 Maker (MKR)

2 Compound (COMP)

3 Uniswap (UNI)

4 Aave (AAVE)

5 Aragon (ANT)

6 Here’s what else to consider

Blockchain

Rate this article

Thanks for your feedback

Explore Other Skills