Governance Tokens with Best Tokenomics in 2025

KERNEL is a multifunctional governance token for KernelDAO, a leading restaking ecosystem on the BNB Chain.

This governance token enables governance participation and access to various ecosystem features, including staking, liquidity, and rewards. It plays a key role in managing KernelDAO’s three major products, with a combined TVL exceeding $2 billion.

KERNEL has several utility functions, making it a core element of the ecosystem. Here are the assets’ use cases:

Governance: Token holders can participate in all governance decisions related to the Kernel platform, fees, slashing conditions, and other key updates. Additionally, they can also engage in governance for LRT & Gain by voting AVS selections, rebalances, operator-related proposals, platform fees and more. Shared Security: Staking KERNEL provides economic security for all projects built on the Kernel platform. Slashing Insurance: By staking KERNEL, token holders also help safeguard against potential slashing events. For doing that, they earn a share of protocol rewards in return. Liquidity Provision: Staking tokens in an AMM generates additional income in KERNEL.

The coin’s primary purpose is to govern and develop KernelDAO’s three products:

• Kelp: One of the leading liquid restaking protocols on Ethereum.
• Kernel: The restaking infrastructure on BNB Chain, integrated with over 20 projects, including AI and ZK solutions.
• Gain: A tokenized rewards program, providing users with access to airdrops and high-yield opportunities.

The total supply of KERNEL is 1 billion coins. The tokenomics of the asset is designed with a focus on the community. The distribution is as follows:

• 55% KERNEL: Community rewards and airdrops
• 20% KERNEL: Private sale
• 20% KERNEL: Team and advisors
• 5% KERNEL: Ecosystem and partners

DYDX is the governance token of the dYdX protocol. Founded in 2017, dYdX is one of the leading decentralized trading platforms for perpetuals. It’s the only fully open-source perp trading platform, and is built on Cosmos and Tendermint Proof-of-Stake (PoS) consensus protocol.

In 2023, dYdX launched its own Layer-1 and moved its DYDX token from Ethereum, launched in 2021, to its native Layer-1.The token serves as the key element of the ecosystem and there are over 60,000 DYDX holders around the world. These holders benefit from:

• Staking rewards: By staking their DYDX tokens, users earn rewards.
• Security: Staking DYDX bolsters the network’s security and stability.
• Governance: Token holders can participate in the fully decentralized governance model of dYdX.

In March, 2025, dYdX introduced its first-ever buyback program, where 25% of protocol fees are used to repurchase and remove DYDX tokens from active circulation. The main goal of this initiative is to show the community’s firm belief in the token’s prospects and to reinforce the connection between the DYDX token and protocol revenue growth. Now the community is actively discussing increasing buybacks to 100% of protocol fees.

DYDX’s maximum supply is capped at 1 billion tokens, the vast majority of which have already been unlocked, given dYdX’s long history, having launched the token in 2021. Currently, there are almost 762 million coins in circulation.

The DYDX’s distribution model looks like this:

• 10% – Treasury SubDAO for financial sustainability initiatives
• 25% – MegaVault
• 25% – Buyback Program
• 40% – Staking Rewards

All protocol fees are being reinvested into the ecosystem.

Venus Protocol facilitates lending, borrowing, and minting of synthetic stablecoins on BNB Chain and other EVM networks. Its native token, XVS, is built on BNB Chain and allows users to participate on updates within the Venus ecosystem.

To gain voting power, XVS holders need to stake their tokens in the Venus Vault. For that, they are rewarded with:

• Base Rewards: Previously known as Legacy Rewards; these are distributed every six months from protocol reserves.
• Protocol Income Share: Stakers receive a portion of the protocol’s revenue, primarily derived from borrow fees and liquidation fees.
• Venus Prime Benefits: Holders who qualify for Venus Prime receive enhanced annual percentage yields (APYs) on money markets, significantly boosting returns. The Venus Vault has a 7-day unlock period, and up to 10% of staked XVS may be used to cover protocol shortfalls if the risk fund is insufficient.

Apart from voting and staking, XVS holders also can add new collateral types, adjust risk parameters and change interest rates.

In 2025, Venus implemented a deflationary strategy for XVS, where new token emissions have been reduced to zero. This is needed to control the circulating supply and enhance token value. Venus also supports the XVS buyback and burn program.

MKR is the governance token for the decentralized Maker protocol. The coin ensures the stability of DAI stablecoin, which is pegged to the US dollar. MKR is used to vote on key changes within the protocol and to make decisions related to risk management and financial strategies.

Now, MKR’s market value stands at $839 million.

In addition to its governance function, the MKR token plays several other crucial roles:

• System Stabilization: MKR holders can vote on changes to the Maker protocol’s economic model, such as adjusting parameters to stabilize the value of DAI.
• Risk Protection: In the event of a system default, MKR can be used to cover debts and maintain stability.
• Rewards: Through governance mechanisms, MKR holders can profit from the protocol’s stable operations.
• Token Burning: A portion of MKR tokens can be burned, reducing the total supply and increasing the value of the remaining tokens.

The supply of MKR tokens is not limited, allowing flexible supply management based on the system’s needs. Currently, 880,000 MKR tokens are in circulation.

The distribution of MKR tokens is as follows:

• 30% MKR: Community
• 20% MKR: Investors and team
• 50% MKR: Reserve for risk management and covering debts in case of default

UNI is the governance token for the decentralized exchange Uniswap. It is one of the leading platforms on the Ethereum blockchain, with a TVL exceeding $5 billion.

Among all governance tokens, UNI has the highest market capitalization. At the time of writing, its market value exceeds $560.3 million.

The UNI token gives its holders the right to participate in decision-making related to further developing the Uniswap protocol. For example, users can vote on updates, changes to the fee model, and other important aspects of the ecosystem.

UNI also serves as a long-term incentive for holders. In addition to participating in the governance of the protocol, the token provides holders with the following opportunities:

• Earning a share of fees: UNI holders can receive a portion of the fees generated on the Uniswap platform by staking their tokens in liquidity pools.
• Access to new features: UNI holders may gain early access to new features and products launched on the Uniswap platform.
• Contributing to ecosystem development: UNI funds grants and initiatives to develop the Uniswap ecosystem.

Uniswap has one of the most active communities. UNI holders share their thoughts and discuss the protocol’s future on special online forums. They can also submit their proposals.

The total supply of UNI is limited to 1 billion tokens. Most of the tokens (60%) have been allocated to the community, while the remaining portion has been distributed to the reserve, the team, and investors.

The detailed tokenomics are as follows:

• 60% UNI: Users, the community, and liquidity
• 21.5% UNI: Team and consultants
• 18.5% UNI: Uniswap fund

SUSHI is the governance token for the SushiSwap ecosystem, one of the largest DEXs.

It is used to vote on protocol changes, incentivize liquidity, and manage the platform’s treasury. The DAO handles all of this through a new quadratic voting mechanism, which redistributes influence from large holders to active users and LPs (Liquidity Providers).

SUSHI holders participate in decision-making through Snapshot voting and can also increase their influence through NFTs and veSUSHI.

SUSHI is one of the biggest governance tokens, with a market capitalization approaching $233 million. It also performs several other key functions:

• Rewards for Liquidity Providers: LPs receive SUSHI for providing liquidity in SushiSwap pools and can participate in the Onsen program, which offers higher rewards.
• Staking and Platform Fees: Users can stake SUSHI in xSUSHI to receive a portion of the platform’s fees and increased bonuses.
• NFT Mechanism and Trading: LPs participating in long-term liquidity provision receive NFTs, which can be traded, transferring associated rewards.

SUSHI does not have a fixed supply. An emission rate of 1.5% APR controls inflation, ensuring stable rewards and a balance between inflation and sustainability.

The distribution of SUSHI tokens is as follows:

• LPs: Most SUSHI tokens are distributed among liquidity providers through the mining mechanism. For the first 100,000 blocks (two weeks), the emission rate was 1,000 SUSHI per block, after which it decreased to 100 SUSHI per block.
• Development Team: The development team receives 10% of the total SUSHI issued for operational activities, audits, and other needs.

CAKE is the center of the PancakeSwap ecosystem, the biggest DEX on the Binance Smart Chain (BSC). It is a BEP20 coin used for governance.

Apart from that, CAKE holders can also:

• Rewards for Liquidity: Users can earn CAKE by participating in liquidity pools, farming, and staking on the platform.
• Incentive and Bonus Programs: CAKE is frequently used in various promotions, giveaways, and bonus programs to attract new users and retain existing ones.
• Fee Payments: Users can use CAKE to pay for transaction fees on the platform.
• Participate in the PancakeSwap Lottery: Each ticket costs 5 CAKE. The price may slightly fluctuate depending on the CAKE exchange rate. The lotteries are held twice daily.
• CAKE’s market value is $427 million, while PancakeSwap’s TVL exceeds $1,6 billion.

The total supply of CAKE is not capped. Currently, 290 million tokens are in circulation. The PancakeSwap developers have implemented an inflationary mechanism to manage the issuance of coins.

Inflation is minimized through a token-burning mechanism that reduces the total supply of CAKE over time.

The distribution of the native PancakeSwap tokens is as follows:

• 60% CAKE: Liquidity and rewards for users
• 30% CAKE: Staking and farming
• 10% CAKE Reserves and development

CRV is the governance token for the decentralized Curve Finance protocol. Curve is one of the leading DEXs specializing in optimized stablecoin swaps with minimal fees.

The CRV token is primarily used for voting on important protocol changes. It is also one of the largest governance tokens, with a market capitalization exceeding $689 million as of this writing.

In addition to its governance role, CRV has another three main use cases, which require veCRV–locked CRV:

• Liquidity Incentives: CRV holders can earn rewards for providing liquidity in Curve pools and participating in liquidity pool incentives.
• Staking: CRV holders can participate in long-term staking through the Gauge Voting program, earning additional rewards for voting and supporting liquidity.
• Liquidity and Additional Income: Participants can earn income from providing liquidity and staking CRV across various DeFi platforms and protocols.

The total CRV supply is capped at 3 billion tokens. Its distribution looks like this:

• 62% CRV: Community liquidity providers
• 30% CRV: Shareholders (team and investors) with 2-4 years vesting
• 5% CRV: Community reserve
• 3% CRV: Employees with 2 years vesting

AAVE is the governance token for the decentralized protocol Aave, which allows users to borrow and lend assets in DeFi on Ethereum and other networks.

This governance token is also the largest in terms of market capitalization. Currently, AAVE’s market value is estimated to be $3.9 billion.

AAVE is primarily used for governance and staking. Its holders can vote on updates to the protocol or create proposals.

AAVE also provides its holders with additional benefits, such as reduced fees and participation in liquidity provision.

The AAVE governance token is also used to protect the protocol from instability and unforeseen events, such as borrower defaults. This mechanism is called the Safety Module (SM), and it helps maintain the entire system’s stability.

The total supply of AAVE is limited, which helps control inflation and maintain the token’s value. Many of the tokens were distributed among the community and used for liquidity provisioning.

The maximum supply of tokens issued is 16 million AAVE. This cap helps prevent inflation and maintains the token’s value over time.

According to the tokenomics, the distribution of these tokens is as follows:

• 60% AAVE: Community
• 25% AAVE: Team and consultants
• 13% AAVE: Reserve for liquidity support and other purposes

BAL is the governance token behind the Balancer protocol, a decentralized automated market maker (AMM) on Ethereum. BAL’s market value stands at $120 million.

With the BAL token, holders can vote on key decisions and updates concerning the Balancer ecosystem. However, to vote, users need to hold veBAL (vote-escrowed BAL), an extension of the original token designed for decision-making.

This system was borrowed from the Curve (veCRV) mechanism. It allows users to lock their BAL tokens in an 80/20 BAL/WETH pool for up to one year.

By locking their tokens, users receive veBAL, which grants them voting rights and participation in collecting protocol fees. In return, users can earn increased rewards for providing liquidity and governance participation.

With veBAL, users can vote and earn up to 82.5% of protocol fees, including fees from swaps and tokens in Core Pools. Additionally, through the Gauge Voting system, users can direct the emission of BAL tokens to specific liquidity pools, earning extra rewards.

The total supply of BAL is capped at 100 million tokens, with 47.5 million tokens set to be issued through the veBAL system. BAL emissions decrease every four years, which helps control inflation.

The protocol manages the emission of BAL to incentivize long-term participation in the ecosystem. The distribution of tokens is as follows:

• 50% BAL: Incentives for liquidity and user rewards, including the veBAL program.
• 30% BAL: For the community and ecosystem, including liquidity pool support and protocol development.
• 20% BAL: For the team and investors.