Are governance tokens (UNI, COMP) a good long-term investment?

[Abiky]

I've seen some governance tokens going all the way towards the "triple digits" within their initial days since launch. It's impressive how tokens like MKR and COMP reached such high prices within such a short amount of time. Uniswap's "UNI" token performed well in the past, but prices are relatively stagnant these days due to the platform's high ETH gas fees and poor performance. The current bear market made things worse, plunging major crypto asset's prices at a very fast pace. Given that governance tokens allow "hodlers" to make key decisions on decentralized trading platforms, it's possible demand will soar in the future.

Do you think governance tokens (UNI, COMP, MKR) are a good long-term investment? If not, why? Your input will be greatly appreciated. Thanks in advance.

[Yogee]

....Uniswap's "UNI" token performed well in the past, but prices are relatively stagnant these days due to the platform's high ETH gas fees and poor performance.

That doesn't sound right. This makes me think that you just came out of the cave after a long hibernation hehe. I'm pretty sure those who were really around knew the gas price measured in ETH were even higher when UNI was surging. A lot of the traders and investors didn't mind how much they will spend to buy or sell during that time since as long as they make a profit.

[Abiky]

That doesn't sound right. This makes me think that you just came out of the cave after a long hibernation hehe. I'm pretty sure those who were really around knew the price measured in ETH were even higher when UNI was surging. A lot of the traders and investors didn't mind how much they will spend to buy or sell during that time since as long as they make a profit.

It's been a long time since I don't use the Uniswap platform. I've sold all of my UNI after the airdrop. A good thing I've made that decision, or I would've had less money in my pocket today. I've only asked if governance tokens were a good long-term investment since they serve a unique purpose in crypto/Blockchain land. It doesn't seem to me that platforms like Uniswap and Compound are that popular compared to their counterparts on other Blockchain networks, but I could be wrong.

The high ETH gas fee is what killed most of these platforms, since only whales were able to participate in the system. How can it be called "decentralized finance" if only a select few are able to use it? This is nothing more but inequality baked right into the Blockchain. I hope things improve in the future so both Uniswap and Compound could reach mainstream adoption at a large scale. The market is bearish right now, so it wouldn't hurt buying a few of these tokens (mainly UNI and COMP) just in case.

[kaseygriffin]

...Do you think governance tokens (UNI, COMP, MKR) are a good long-term investment? If not, why? Your input will be greatly appreciated. Thanks in advance.

It could be yes or it could be no. I don't have much problem with them as, to be honest, they are also ideal in this market given the problems they are solving and also in the market. But considering the long or short situation, the profitability of this factor is also quite difficult to assess, as we do not all approach the market and leave when there is a profit or stop with a loss.
But for an idea that I think will happen to them in the future, they will bring new opportunities for us. If we can grasp them, then of course it will bring benefits or risks. depending on how it is managed afterwards.

[Heisenberg_Hunter]

Before we get into a discussion, there are some important points to be noted down. The primary one being, both Maker & Compound has lower maximum supply and they can be relatively controlled by the whales who has a few millions in their wallets through a targeted attack. Moreover, both these networks are popular because they brought new technological changes to the industry be it in terms of "single collateral DAI" or "decentralized money markets with algorithmically set interest rates". But to be honest, neither Maker nor Compound were shit projects which was pumped exclusively for profits like BAYC (even vitalik is worried about these monkeys going for $100k+ with absolutely no use case to the real world lol). Uniswap, just like MKR or COMP brought a ground breaking innovation to the industry and successfully tried to create a more decentralized structure for trading of crypto assets with the help of Liquidity Providers.

But as you stated above, the interest in Defi or DAO based coins are diminishing to quite an extent and the primary reason for this market turnover can be linked over to the bear market in general rather than increasing gas fees. For example, inexperienced traders or the one relatively new to this web3 space would always stick to cheaper blockchains like Solana or BSC sacrificing the decentralization aspect even if ETH moves to POS in the upcoming days. But, more experienced traders would prefer to stay in decentralized blockchains like BTC or ETH by paying higher gas fees. In addition to that, the real innovation happens in decentralized blockchains and cheaper blockchains just tend to copy the innovations by masking them with cheaper fees to attract new & inexperienced traders.

Concluding that, in my opinion governance tokens like UNI, COMP or MKR are still a good long term investment because they reinvented the wheel and along with that they weren't targeted for new investors who trades only during the bull market. We are in the accumulating phase for these tokens and there is a higher possibility these will soar in near future.

The high ETH gas fee is what killed most of these platforms, since only whales were able to participate in the system.

The high ETH fees are preventing newbies from participating in the network which is quite good. If the gas is relatively lower like Solana, the network would be spammed to an extent which will obviously push the developers to abruptly halt them for a short amount of time.

[fzkto]

MKR turned out to be a very good investment if you bought it a few years ago, when Defi did not yet exist as an everyday technology. But MKR has proven itself very well. As for UNI and COMP, only history can show the success of these projects, although I have no doubt that UNI will or probably already has become a proven project too.  The distribution of their tokens already speaks volumes.

[SirLancelot]

I've seen some governance tokens going all the way towards the "triple digits" within their initial days since launch. It's impressive how tokens like MKR and COMP reached such high prices within such a short amount of time. Uniswap's "UNI" token performed well in the past, but prices are relatively stagnant these days due to the platform's high ETH gas fees and poor performance. The current bear market made things worse, plunging major crypto asset's prices at a very fast pace. Given that governance tokens allow "hodlers" to make key decisions on decentralized trading platforms, it's possible demand will soar in the future.

Do you think governance tokens (UNI, COMP, MKR) are a good long-term investment?

The bear market makes the price of most cryptos go down but at the same time it has some benefits because the transaction fees have also declined by some folds. Isn't that a good thing? Especially for the platforms like uniswap where the fees are used to be high.

Now we can now be able to use this platform mostly for buying our favorite erc20 based cryptos and maybe it is time for us now to dispose our shit cryptos and still earn something if we are lucky. Yes op I do think they are a good asset in addition to our portfolio. I will surely buy more of these three coins featured on this thread if I have the money. I just hope tho that bear can last a little longer hehe.

[Abiky]

Before we get into a discussion, there are some important points to be noted down. The primary one being, both Maker & Compound has lower maximum supply and they can be relatively controlled by the whales who has a few millions in their wallets through a targeted attack. Moreover, both these networks are popular because they brought new technological changes to the industry be it in terms of "single collateral DAI" or "decentralized money markets with algorithmically set interest rates". But to be honest, neither Maker nor Compound were shit projects which was pumped exclusively for profits like BAYC (even vitalik is worried about these monkeys going for $100k+ with absolutely no use case to the real world lol). Uniswap, just like MKR or COMP brought a ground breaking innovation to the industry and successfully tried to create a more decentralized structure for trading of crypto assets with the help of Liquidity Providers.

But as you stated above, the interest in Defi or DAO based coins are diminishing to quite an extent and the primary reason for this market turnover can be linked over to the bear market in general rather than increasing gas fees. For example, inexperienced traders or the one relatively new to this web3 space would always stick to cheaper blockchains like Solana or BSC sacrificing the decentralization aspect even if ETH moves to POS in the upcoming days. But, more experienced traders would prefer to stay in decentralized blockchains like BTC or ETH by paying higher gas fees. In addition to that, the real innovation happens in decentralized blockchains and cheaper blockchains just tend to copy the innovations by masking them with cheaper fees to attract new & inexperienced traders.

Concluding that, in my opinion governance tokens like UNI, COMP or MKR are still a good long term investment because they reinvented the wheel and along with that they weren't targeted for new investors who trades only during the bull market. We are in the accumulating phase for these tokens and there is a higher possibility these will soar in near future.

Old governance tokens have the fundamentals to stand the test of time. Even though there's not much interest in them because of the bear market, I believe they will reach higher prices in the future due to "De-Fi" maturing as a serious alternative to centralized finance. Maker, Compound, and Uniswap were all pioneers of this movement. Other projects simply copied them (eg: PancakeSwap, JustSwap, USDJ, etc) to take advantage of the situation. Their popularity is only attributed to the low fees in their underlying Blockchain networks. But the original ones are still the best option if you're looking for reliability, security, and decentralization.

I've never accumulated COMP nor MKR, mainly because of the high ETH gas fees. But now that things have changed, it wouldn't hurt buying and "hodling" these tokens to cash them out within the next bull market. All of the original projects are decentralized, so I'm pretty sure they will improve both in terms of functionality and performance over time. Who knows what the future holds for the entire crypto/Blockchain industry? Just my thoughts

[passwordnow]

They're all relying to the market's condition and that's why if we've seen them pumping as much as they can and looking that it's almost impossible for them to correct. Then, they have to go through what's with the market. I honestly think that if you're complete with what you're holding which is composed of bitcoin and Ethereum and looking for something else to buy, you may have that consideration with them. So, for example, you've given is the compound that has pumped to $800+ during the bull run last year, it's now $56. That's really a lot of percentage with its gain and you're the one to think if it will be back there or not.

[RussianEnglishTranslation]

Governance tokens for AMMs can be a good investment, if they offer profit sharing like Cake and Boo do. I don't see any real use for UNI right now. Forks of Uniswap, like the Candle Chain DEX, won't have a token to start and don't need one, but a platform with a full suite of DeFi dapps like paintswap needs one to function. It all depends on what the developers are trying to achieve and how complex they wish their platform to be.

[TastyChillySauce00]

Do you think governance tokens (UNI, COMP, MKR) are a good long-term investment? If not, why? Your input will be greatly appreciated. Thanks in advance.

The main point is as long as the platform was still alive and the governance token will always be used by the platform. The governance token was so good for the long term. The fact that if so many times the governance token can survive during the bearish market.
If people are thinking if that was good for short term and they must have learned again about what governance token is.
There are so many advantages started from being used to vote and staking. There would be more utilities that may come to the token soon.

[Anonylz]

....Uniswap's "UNI" token performed well in the past, but prices are relatively stagnant these days due to the platform's high ETH gas fees and poor performance.

That doesn't sound right. This makes me think that you just came out of the cave after a long hibernation hehe. I'm pretty sure those who were really around knew the gas price measured in ETH were even higher when UNI was surging. A lot of the traders and investors didn't mind how much they will spend to buy or sell during that time since as long as they make a profit.

Yeah surprisingly the huge gas fees did not prevent most traders to trade in uniswap as much as they could back then, some investors made a huge profit despite the high gass fee. As long as uniswap exit i don't see why buying some uni for long term base is not a good idea, the current market condition making things to be slow but it also gives an opportunity to buy these coins very cheap, look at the price of comp now compare to its previous price, it is a discount.  

[jrrsparkles]

Well, it depends. Look at the growth of BNB started as a token but now created their own blockchain and also lured many projects to use the blockchain because of the competitors are relatively high gas fee or having issues with the scalability. But if the token is going to remain same since the beginning then the growth will last long only till the hype exist apart from that we can't expect huge from it.

[Abiky]

They're all relying to the market's condition and that's why if we've seen them pumping as much as they can and looking that it's almost impossible for them to correct. Then, they have to go through what's with the market. I honestly think that if you're complete with what you're holding which is composed of bitcoin and Ethereum and looking for something else to buy, you may have that consideration with them. So, for example, you've given is the compound that has pumped to $800+ during the bull run last year, it's now $56. That's really a lot of percentage with its gain and you're the one to think if it will be back there or not.

Of course. Any token or cryptocurrency moves either up or down in price depending on current market conditions. They usually follow Bitcoin's footsteps as it's the one cryptocurrency that started it all. But I think there's something special about governance tokens, since they provide "hodlers" the ability to make key decisions on the token's underlying network/platform. They're quite useful if you ask me. Some of them even have a limited supply of coins in circulation, making them a good store of value.

All of the old tokens reached high market prices since their day of launch. Some of them are now cheaper than they were before because of the bear market. But that doesn't mean they'll die anytime soon. Both Maker and Uniswap are solid projects in the crypto/Blockchain space, so I'd expect them to last a lifetime. How long they'll go in terms of market price, will entirely depend on the rules of supply and demand. As long as decentralization is prioritized, there should be nothing to worry about. Just my opinion

[Heisenberg_Hunter]

Other projects simply copied them (eg: PancakeSwap, JustSwap, USDJ, etc) to take advantage of the situation. Their popularity is only attributed to the low fees in their underlying Blockchain networks.

While projects such as Pancake deviated more or less from the UNI's contract source codes, however projects which were lead by Justin still relies on shitcoin tactics to lure the newbie investors into bad investments. May be at one point of time in future, we might be watching TRX failing miserably and Justin being questioned for the same but till then, the blockchain will run its course.

But the original ones are still the best option if you're looking for reliability, security, and decentralization.

As per the blockchain trilemma, we can either achieve only two among the following : Decentralization, Scalability and Security. I firmly believe that ETH might end up being controlled by a group of large staking pools rather than being decentralized once ETH 2.0 comes into practice!

[RussianEnglishTranslation]

Other projects simply copied them (eg: PancakeSwap, JustSwap, USDJ, etc) to take advantage of the situation. Their popularity is only attributed to the low fees in their underlying Blockchain networks.

While projects such as Pancake deviated more or less from the UNI's contract source codes, however projects which were lead by Justin still relies on shitcoin tactics to lure the newbie investors into bad investments. May be at one point of time in future, we might be watching TRX failing miserably and Justin being questioned for the same but till then, the blockchain will run its course.

But the original ones are still the best option if you're looking for reliability, security, and decentralization.

As per the blockchain trilemma, we can either achieve only two among the following : Decentralization, Scalability and Security. I firmly believe that ETH might end up being controlled by a group of large staking pools rather than being decentralized once ETH 2.0 comes into practice!

Wow, I wish you would post more here. Refreshing to see this kind of outlook. I'm not against forking code, as in the case of pancake as you cited, that's how we evolve as an industry. You couldn't have a 2022 Ferrari back in 1902; these things take time to develop and the same is true for blockchains and contracts. This is why I am so bullish on FTM and CNDL. While FTM is a DAG with high TPS and quick finality, CNDL is a traditional POS blockchain that can handle up to 80k TPS. Both are evolutionary branches off of Ethereum while it could be argued that Ethereum was an evolutionary branch of Bitcoin colored tokens.

[Abiky]

While projects such as Pancake deviated more or less from the UNI's contract source codes, however projects which were lead by Justin still relies on shitcoin tactics to lure the newbie investors into bad investments. May be at one point of time in future, we might be watching TRX failing miserably and Justin being questioned for the same but till then, the blockchain will run its course.

Justin Sun usually shills his projects to attract investors into them for his own benefit. It's all about "pumping" a cryptocurrency or token's price for Justin Sun to fill his pockets with money. He doesn't really care about decentralization after what happened with the STEEM/HIVE fork. That's why ETH is still the "King of Altcoins" even though it's somewhat slow and expensive to use. Underlying projects like Uniswap and Compound have been the pioneers of the "De-Fi" movement so it's unlikely they'll disappear anytime soon. Price-wise, the tokens could reach new All-time-highs depending on how BTC "behaves" in the future. Ultimately, it's all about decentralization. As long as decentralization prevails, there should be nothing to worry about. Just my opinion