DAOs and their Governance tokens play an essential role in decentralising the internet - a vital aspect of Web3. Strong governance tokens such as the Sandbox (SAND), Aave (AAVE), and Fortrex: Color Duels (MAGG) contribute stability and security to their various DAO systems.
These tokens also ensure efficient scalability of their respective projects, with prospects of profitable rewards to their holders.
This article explores why and how these three tokens on our cryptocurrency list are the best in driving DAO projects.
The decentralized metaverse, The Sandbox, is a virtual world on the Ethereum blockchain where users play, create, and own properties and in-game assets. Most importantly, users can trade these assets to earn real money.
The Sandbox intends to leverage the potential of blockchain technology, DAO, and NFTs to empower users to earn as game creators or players.
It is distinct from other play-to-earn platforms in that it entirely consists of user-generated content. Consequently, it presents an exceptional opportunity for brands, artists, creators, and players to display their creativity.
Its unique features include the VoxEdit, Game Maker, a Marketplace, and different tokens like the SAND, LAND, and ASSETS.
SAND is the utility token for platform transactions. Users can buy, sell, trade, and swap items with $SAND. The Sandbox project also uses the SAND token to reward users on the platform.
The Sandbox project operates a DAO that governs with the SAND token. Holders of $SAND have the right to vote - and assign votes - on proposals and offer changes to the Sandbox platform.
In addition, $SAND holders can also contribute to the staking pools - to earn more revenue from LAND sales - and in the Sandbox Foundation pool.
The popular lending protocol, Aave (AAVE), is another big DAO project backed by the Ethereum blockchain. It is a decentralized exchange (DEX) where users can borrow or lend crypto tokens.
The Aave protocol is compatible with different blockchains. Consequently, various tokens - funded by liquidity providers - are available in the liquidity pools.
These providers deposit their tokens for a share of the pool’s fees. Conversely, borrowers must pay a fee to access the pool and deposit collateral before taking out the loan.
The Aave DAO is a fully decentralized, community-governed protocol with more than 100,000 token holders. AAVE is the protocol’s governance token - giving its holders the right to vote on community proposals and issues concerning the platform.
AAVE token holders bear the protocol's risks and contribute to it in a higher capacity. As a result, they have a vested stake in the protocol's behavior, safety, and operation.
In addition, AAVE holders benefit from reduced fees when borrowing from the liquidity pools.
Fortrex: Color Duels (MAGG)
The new-kid-on-the-block cryptocurrency, Fortrex Color Duels (MAGG), is one to watch out for. Its goal is to innovate the play-to-earn game sector.
It plans to utilize the various resources of the blockchain - such as liquidity pool staking, market marker, and a dual token model - to build a sustainable gaming economy and diversify revenue generation.
The revenues will come from game battle pass sales, in-game purchases, and NFT marketplace royalties.
The game developer, Magnolia Games, also intends to imbibe a DAO model - governed by the MAGG token - into the ecosystem. The Magnolia DAO will represent the opinions and interests of the community members.
Also, the DAO will receive a share of game revenues for rewarding MAGG token holders based on their holdings.
Governance tokens are unique to the cryptocurrency market. They promote the security, decentralization, and scalability of DAO projects - a vital sector in Web3.
Also, holding the above-listed tokens - SAND, AAVE, MAGG - gives you an opportunity to earn within a progressive community.