Corporations and institutional investors have found their way into the crypto space due to the recent bull run. The volume of investors flowing into this space has opened doors for new sophisticated and more user-friendly solutions and rapid growth in the financial side of blockchain. DeFi (Decentralized Finance) has answered most, if not all, the concerns people had about the real world use cases of blockchain and cryptocurrencies. Most experts have termed DeFi as the future of finance. With the current growth of cryptocurrencies and blockchain, people are slowly moving towards these concepts and understanding them.
DeFi and Governance Tokens
The term DeFi can be used to define all the blockchain-based solutions that eliminate the need for traditional financial systems and intermediaries - or simply create brand-new tools that cannot be matched by anything in traditional finance. DeFi not only redefines value creation and transfer but also has a lot of other complex but essential financial applications.
Governance Tokens can be ranked as one of the most promising and critical components within this umbrella of DeFi. By acquiring governance tokens, a user shall have the power to participate in the governance curation of DeFi products - be it bringing in new updates, technological improvement, or any other software mechanisms.
Governance tokens have proven to be an especially fantastic opportunity for investors as they appreciate rapidly in value. A prime example of this is Uniswap. Their Governance token UNI which was launched in September 2020 for around $3, now stands at a valuation of above $30, climbing up 10x in a few months.
Although the core use of these governance tokens is to influence decisions in the ecosystem, yet there are projects which allow added value by coupling them with DeFi use cases such as lending, yield farming, etc. While a select few amp the prospects even further, such as a Nimbus and their Governance Token, the GNBU is a key to over 15 revenue channels.
Nimbus, a DAO-governed ecosystem of more than 15 financial and investment tools, has introduced additional revenue streams for people willing to invest in their governance token, the GNBU. They have an equity model where GNBU token holders get cuts from the over 15 revenue streams generated by the 4 Nimbus dApps. These dApps are based on:
- Classic IPO participation through crypto
- Lending and Borrowing for users with different risk appetite
- Startup financing with access to equity and convertible notes of future unicorns
- Crypto Arbitrage-Trading
Since most people entering the crypto space are in for the revenues based on true value, projects like Nimbus surely help facilitate the maturation and adoption of DeFi even further. Apart from getting access to these revenue streams, Nimbus's governance token holders also get to vote on economic, technical, and governance-related aspects of the platform.
Looking at Nimbus’ ongoing developments and wide user-adoption, our team got in touch with the CMO of Nimbus Platform, Alexandra Serebrennikova. In this interview, she outlines the potential of the DeFi industry and the governance tokens’ role in it - as well as the unique value proposition of the Nimbus Platform and how they’re bridging DeFi and traditional finance.
Can you explain the functionalities and mechanisms present on the Nimbus offers briefly?
Nimbus is not just a DeFi platform but a holistic ecosystem that offers 15 revenue-generating tools for users in a single spot. Many of them are based on the most attractive investment products from traditional finance - such as IPOs or startup crowdfunding with access to equity and convertible notes.
With Nimbus, these opportunities become available in crypto for the first time in history. But due to the decentralization and automation, they become even more efficient and accessible for all. Simultaneously, leveraging the existing tools makes it easier for an average user to understand what happens to their assets and how exactly the value is created. Finally, all of these opportunities can be accessed via 2 tokens: NBU, the Platform’s utility token, and GNBU, our governance token.
What are the best use-cases seen in the DeFi space thus far?
We see the delivery of many traditional finance opportunities on a decentralized platform as the single most important development in many decades and reminiscent of the dawn of the Internet age. Imagine the impact on the over 1 billion unbanked citizens of the world. GNBU holders get access to over 15 different revenue streams at a click - this has never been done until now, even in the current DeFi market. With this, wealth-creation becomes seamless even for those who have no access to traditional financial and investment products in fiat money.
What's the significance of governance tokens in the DeFi ecosystem?
The governance tokens could be compared to voting shares - but a much more transparent, fair and effective version. With them, anyone can contribute in the future of a DeFi project while receiving economic incentives for doing the right thing. That’s a very elegant and sustainable way of motivating users to bring to life the solutions that they need the most - in a mutually beneficial way.
So, answering your question - governance tokens are extremely important as they enable the creation of DeFi tools that would bring lasting value to users in the most efficient way.
By the way in Nimbus, we’ve developed a rather unique motivation mechanism for that. GNBU holders receive not only the voting rights but also the Platform revenues. This ensures everyone has the skin in the game and the right motivation to do great things together and make the Platform thrive.
How do you justify giving power to the token holders? Not every person is knowledgeable, so how can they be trusted to help make decisions?
First, with the right motivation comes the ability to make better decisions. Considering that GNBU holders receive cuts from the Platform’s revenues, we expect them to be motivated to educate themselves and master their decision-making.
Second, the Nimbus voting process and GNBU tokenomics are specifically crafted in a way that minimizes the chances of “harmful” decisions being accepted. For example, GNBU holders need to hold a certain number of GNBU in order to be able to create proposals and vote. This effectively ensures that the governance participants have enough at stake to be careful. In the end, every decision affects them and the whole community quite dramatically.
Finally, even if the so-called “harmful” decisions are accepted - it’s the governance token holders to decide what is good for them and what’s not. The Nimbus team’s mission was simply to develop great tools - now it’s up to users to decide how to use them.
Uniswap showed rapid appreciation in the last few months in terms of valuation, can you predict the same for others including Nimbus?
While there is nothing I could predict with certainty, I strongly believe that solutions that effectively address users’ pain points can - and must! - appreciate in value.
Before steering Nimbus in the DeFi direction, we have carefully studied the market and spotted a few blind spots in both crypto and traditional financial sectors. Our large 50,000 user community also provided lots of useful feedback. So now, we know that our decision to combine traditional finance with much more efficient technology and governance practices will meet the users’ demand. It is then quite self-explanatory- when a project meets the most burning demands of its users, the growth and appreciation of such a project is bound to happen.
Besides participating in the governance of the Nimbus Platform, what other benefits does the GNBU token offer?
GNBU token provides value to users all along the way - not only when used for voting or exchanged for other assets.
GNBU holders receive cuts from more than 10 Platform revenue streams generated by the Nimbus dApps. All at once, on an ongoing basis! So even if one of the streams underperforms, you still have plenty of others as a safe bet. This ensures sustainability and the highest standards of risk mitigation for holders - unlike any other governance token today.
Moreover, GNBU can also be used in the diverse Nimbus functionality: staked for rewards, provided as liquidity, lent to borrowers, and so much more!
Also, Nimbus plans to get listed on a top North American Stock Exchange by the end of 2020, so this positions all GNBU holders at the very heart of both capital and crypto markets.
Your idea of governance tokens involves revenues like the stock market dividends. Can you explain how the two are different?
The stock market participants receive dividends from the net economic benefit of the operating company (for example, EBITDA). But the profits of the Nimbus company and the value that the platform generates for its GNBU holders are two very different things. Later, we will also separate these revenue types by doing an IPO for the operating Nimbus company.
What GNBU holders receive is the revenue generated by the users’ interaction with the platform according to the underlying smart contracts. These smart contracts run independently from the Nimbus company and its decisions. The revenue creation process is also independent from us and is initiated by the users themselves at their own will as they use the platform’s functionality.
In the end, what you receive is a constant, self-adjusting ecosystem where everybody benefits and nobody can interfere and harm the community - unless the community itself decides so.
Where do you see Nimbus in 5 years? What do you expect from the community?
We shall become a public company (via IPO), and at the same time, a community-owned entity - whereby both deliver certain types of value and change the way traditional banking services are delivered and benefits are shared with the members and shareholders alike.
This will transform Nimbus into a completely new, multi-dimensional type of entity that scales organically and delivers well-crafted financial and investment tools that the users need and all stakeholders find beneficial. That may sound like a dream now - but everything that surrounds us today was merely a dream a few decades ago. So, let us dream big and scale fast - we’ll see where it takes us.