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Wednesday, 08 Dec 2021
Crypto Notes
A weekly newsletter decoding crypto, blockchain and the entire ecosystem.
By Rohas Nagpal
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All about DAO tokens

Over the last few weeks, we discussed Dogecoin (DOGE), Cardano (ADA), Binance Coin (BNB), Solana (SOL), Bitcoin (BTC), Ether (ETH), Filecoin (FIL), Polkadot (DOT), Polygon (MATIC), Chainlink (LINK), Theta, Chiliz (CHZ), Avalanche (AVAX), Terra (LUNA), the top Metaverse cryptos, and the to DeFi protocols. This week we take on the most important DAO cryptos.

     

Let's start with some interesting crypto news.

Japan is working on a law to restrict stablecoin issuance to banks and wire transfer companies.

A Melbourne, Australia-based cryptocurrency exchange, MyCryptoWallet, has collapsed. It was established in 2017 and had 20,000 customers. It is the second Australian exchange to collapse this year.

Vietnamese police have arrested 59 suspects and have solved the country's biggest ever crypto gambling ring, which involved almost $4 billion.

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1. What is a DAO?

A decentralized autonomous organization (DAO) is "an Internet-based community with a shared bank account". You can think of it as a mutual fund where instead of a central manager, the participants decide on the investment decisions.

DAOs did not start too well. The first-ever DAO in 2016 was "hacked" and ultimately led to the original Ethereum network splitting into two.

The rules of a DAO are set and operated through smart contracts. Since DAOs run on public blockchains, anyone can check and verify all the financial transactions made by the DAO. Members of a DAO don't have to trust each other - they have to trust the code.

The most important DAO cryptos are:

Aave (AAVE)

Compound (COMP)

Curve DAO Token (CRV)

Dash (DASH)

Decred (DCR)

Maker (MKR)

Uniswap (UNI)

2. Top DAO cryptos

1. Aave (AAVE)

AAVE is two things - a decentralized finance protocol and a crypto token.

As a protocol, it enables the lending and borrowing of crypto. Lenders deposit digital assets into liquidity pools. Borrowers put up crypto collateral and take "flash loans" using the liquidity pools.

As a token, it gives holders discounted fees and also serves as a governance token by giving holders a vote in the protocol's development.

Price: $193

Market capitalization: $ 2.6 billion

2. Compound (COMP)

Compound is a Decentralised Finance (DeFi) lending protocol that enables depositors to earn interest on their cryptos. It also enables borrowers to take secured loans by depositing collateral.

Price: $229

Market capitalization: $1.4 billion

3. Curve DAO Token (CRV)

Curve DAO Token (CRV) incentivizes liquidity providers on the Curve Finance platform.

veCRV is vote-escrowed CRV i.e. CRV locked for some time. The longer an investor locks CRV, the more veCRV they earn. CRV can also be staked to receive trading fees from the Curve protocol.

Price: $3.9

Market capitalization: $1.7 billion

4. Dash (DASH)

Dash (DASH), whose name originates from "digital cash" is a 2014 fork of Litecoin. It was created to improve upon the privacy and transaction speed of Bitcoin. DASH is a "privacy coin" that is used to govern Dash's proposal system.

Price: $143

Market capitalization: $1.5 billion

5. Decred (DCR)

Decred (DCR) is the governance token of the Decred blockchain. It also facilitates open community interaction and sustainable funding policies.

Price: $97

Market capitalization: $1.3 billion

6. Maker (MKR)

MakerDAO is a decentralized organization while Maker Protocol is a software platform, that allows users to issue and manage the DAI stablecoin. Maker (MKR) is the governance token of the MakerDAO and Maker Protocol.

Price: $ 2,663

Market capitalization: $ 2.6 billion

7. Uniswap (UNI)

Uniswap is a very popular decentralized trading protocol for Ethereum tokens. It is an automated market maker and UNI is its governance token.

Price: $17.7

Market capitalization: $ 11 billion

Note: The data/graphs are from CoinMarketCap, Messari, and Future Money Wallet and may be rounded off.

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The author is an amateur boxer, a blockchain architect, a Tintinologist and a retired hacker.

     

Written by Rohas Nagpal. Produced by Nirmalya Dutta. Send in your feedback to newsletters@livemint.com.

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