What is BadgerDAO?

Badger DAO, is an interesting DeFi protocol, which seeks to attract bitcoiners to the DeFi world that has life in the Ethereum, BSC and Polygon ecosystems, thanks to the use of tokenized BTC and a protocol with decentralized governance. 

lDecentralized Autonomous Organizations (DAO) are one of the greatest creations in the crypto world. Among them, the Badger DAO project aims to generate an ecosystem DAO driven by people who own Tokenized Bitcoin (WBTC), which use this WBTC as a guarantee in different protocols of Decentralized Finance (DeFi) in order to participate in their governance. In this way, Badger DAO offers its users the ability to obtain returns by staking their tokens and the use of automated return and reinvestment strategies.

Does this idea make sense? Well, if we take into account that Bitcoin is the largest cryptocurrency in the world, the enablement of this system could greatly boost the growth of the DeFi ecosystem. In fact, it is precisely this project that has driven the creation of tokens such as WBTC or renBTC, whose impact on the DeFi world is being noticed. In this sense, Badger DAO seeks to take advantage of this potential and provide a new way of applying DAO by uniting the best of Bitcoin and the DeFi universe.

Badger DAO history

Badger DAO is the brainchild of Chris Spadafora, who was the promoter of this project and, together with his team of developers, was the one who made possible the launch of Badger DAO in September 2020. Badger DAO was designed to use tokenized Bitcoin (WBTC or renBTC) as a highly productive collateral within the DeFi ecosystem of Ethereum. In this way, the holders of these tokens could request loans using their tokenized BTC as collateral. Or, better yet, users can use the various Badger DAO tools to improve their positions through the various DeFi strategies accessible within the platform.

Part of these performance strategies could be leveraged by using the BADGER token (in trading strategies staking, yield farming and governance), which are used in vaults called “sets”. Thus, Badger DAO becomes a tool with multiple options so that its users can maximize their portfolios which, of course, has led Badger DAO to be considered a highly relevant project in the DeFi world, especially after reaching a TVL than more than 1.000 billion dollars.

How does Badger DAO work?

Badger DAO is a decentralized finance system (DeFi) built on top of the Ethereum network and that has been ported to networks such as BSC, Polygon and Arbitrum.
The platform allows its users to use the "Setts" to create tools for yield farming y liquidity mining which are fully controlled by smart contracts. All of them aimed at maximizing your holdings in tokenized BTC.

Being a DAO, Badger DAO offers a very high level of participation to its users in the improvement of the protocol, as well as the development, financing and commercialization to create a new project. In this way, any idea presented in the DAO is voted on by all users and is then carried out through treasury and development resources until the project is finished. This DAO control system is managed thanks to the project Aragon, so it is very easy to participate, in fact, you can learn more about Aragon in this link.

BADGER token, the native Badger DAO token

For the operation of the platform, Badger DAO has a native token called badger. This token is built on the Ethereum network, under the standard ERC-20 and its main function is to serve as an element for governance and to reward users who use the platform.

Its existence is limited and its total issuance is 21 million BADGER, which will be released gradually. In fact, at the time this article is published, the BADGER tokens in circulation are around 11 million tokens, which contributes to the revaluation of this token.

Badger DAO Products

Now, as we have mentioned, Badger DAO also offers several interesting DeFi products and tools to its users, namely:

Sept.

The Setts, also known as "Sett Vaults”Are one of the first products within BadgerDAO. These Vaults allow users to deposit their assets to obtain a return through the strategies that follow the opportunities of the different DeFi protocols. Upon deposit, the smart contract puts those assets to work by executing the selected strategy for the particular pool in which the user has deposited the funds. This system is very similar to the one that we can observe, for example, in Compound o Year Finance.

The idea is that users can get an optimized automated return on their positions without having to do all the heavy lifting including research, understanding different protocols, gas rates, and multiple transactions. Instead, this is all automatic, as the system is operated by Badger DAO smart contracts at all times.

In addition, the Setts deliver their incentives by means of BADGER tokens or by means of DIGG, which means that in addition to the underlying APY that users can obtain from the strategies themselves they can, depending on the specific Sett, win one or both of these tokens. additionally.

Digg

Another product within Badger DAO is Digg. Digg is a decentralized elastic supply token that is pegged to the price of Bitcoin and is governed by Badger's DAO. With this, Badger DAO seeks to create a product that eliminates the need for centralized parties to take custody of your BTC in order to use it within DeFi protocols.

Digg works in a very simple way: the user enters their tokenized BTC and gets DIGG tokens instead. Since DIGG has an elastic issue, BTC price changes will be reflected in the final issue of the DIGG token. In the end, a balance will be maintained both in the amount of DIGG tokens and the BTC blocked in the system contract, a process that is called "rebase".

bBadger token

bBadger is a token that within Badger DAO allows the user to earn interest for your holdings within the Setts pools. This token is a representation of the Badger deposited in the Sett, it is not 1: 1 with BADGER and as interest accumulates its price increases with respect to it.

Governance within Badger DAO

All handling of Badger DAO rests with the DAO of this protocol. The system has implemented a system called Badger Enhancement Proposal (BIP) which enables you to design a proposal to flag or effect changes to Badger DAO's governance or products. This system for example, can be seen in cryptocurrencies such as Bitcoin (where it is also known as BIP), the improvement discussions are public and everyone can participate to accept or deny an improvement to the system.

Currently, only the operations team can instantly bring approved forum proposals. Upon approval, the multisig wallet or the DAO vote will implement the proposal that gets the support of the “supermajority”. BIPs follow a template that includes scope, target category, overview, deep dive details, as well as business and technical requirements. Once submitted, the upgrade is open for discussion for at least five days or more, in the event that no consensus is generated during that time.

Another important point in governance is the Badger DAO Board, which is made up of:

1. Two team members
2. Three community members nominated via Discord (not the main team)
3. A representative of the VCs (not the core team)
4. A representative of another DAO that has mutual interests / property with BADGER

A condition in this composition is that if at any time there are more than three Core Team members on the council, a Core Team member must resign and appoint a replacement. Until another rule for decision making is defined, the council will need four affirmative votes to advance any motion and / or BIP.

Conclusions

If you have tokenized BTC and you want to lock it on a platform that offers good returns in both yield farming and liquidity mining, then Badger DAO is a very good option to consider.

Its decentralized governance system and the fact that it is focused on BTC, help a lot to make the platform reliable and easy to use for people who just want to improve the position of their BTC without too many complications.

In addition, if to this we add the ability to interact with other chains such as BSC, Polygon or Arbitrum, then the possibilities of Badger DAO increase considerably, transforming it into a complete option for holders of tokenized BTC on any of these networks and its immense possibilities.

Links of interest