Want to use your BTC across numerous DeFi platforms? Badger DAO makes it possible – you can now earn yield on your BTC, participate in decentralized governance, and access innovative financial tools. Badger DAO is a community-driven project that's simplifying BTC's integration into DeFi, opening up an entire world of opportunities for BTC holders.

We explore the key components of Badger DAO, including its technology, governance model, and tokenomics. 

What Exactly Is Badger DAO?

Badger DAO is a decentralized autonomous organization (DAO) operating on the Ethereum blockchain. Its core mission is to simplify the use of BTC as collateral across various smart contract platforms, effectively bridging the gap between Bitcoin and the expanding world of decentralized finance (DeFi). Essentially, Badger DAO provides the infrastructure that allows developers to integrate BTC into DeFi applications on multiple blockchain networks.

History

Badger DAO was founded in September 2020 by Chris Spadafora, Ameer Rosic, Albert Castellana, and Alberto Cevallos. They partnered with dOrg, a DAO software development company, to build their DAO infrastructure. The mainnet launch occurred on December 3, 2020. 

The founders brought diverse experience to the project: Spadafora is known for creating the Crypto COVID19 Charity Poker Tournament, Rosic is a serial entrepreneur and co-founder of Blockgeeks.com, and Castellana is a co-founder of StakeHound. Currently, Spadafora and Rosic are part of the Badger operations team, while Castellana and Cevallos serve in advisory roles.

The project's launch coincided with the rapid growth of DeFi. Between 2020 and mid-2021, the amount of BTC used in the form of synthetic BTC derivatives on the Ethereum network exploded from an estimated 1,000 to over 250,000 BTC . 

While DeFi initially gained traction on Ethereum, other blockchains like Polkadot, Polygon, and Solana also became popular platforms for DeFi projects. Badger DAO was created to meet the growing need for BTC integration across these diverse blockchain ecosystems.

Badger DAO Components

Several key components contribute to Badger DAO’s operation.

Badger Builders

Badger Builders are the developers who create integrations. Their work is incentivized through a share of fees generated and BADGER token rewards, distributed from a dedicated developer mining pool, for each successful implementation. This encourages a continuous flow of new integrations and expands Bitcoin's reach within the DeFi ecosystem.

DAO

As a Decentralized Autonomous Organization (DAO), Badger DAO is governed by its community of BADGER token holders. This decentralized model allows token holders to propose and vote on a wide range of decisions, including new features, protocol upgrades, and treasury management. 

Core Team 

The dedicated Badger operations team, which includes founders Chris Spadafora and Ameer Rosic, oversees the day-to-day operations and strategic development of the DAO. This team ensures the smooth functioning of the platform and guides its evolution in line with the community's vision.

How Does Badger DAO Work? 

Now, let’s take a look at the technology behind Badger DAO. 

Open-Source 

Badger DAO emphasizes transparency and collaboration by making its code open source. This means the entire codebase is publicly available, allowing anyone to examine, verify, and even contribute to the platform's development. 

SETTs (Sett Vaults): Automated Yield Aggregators

SETTs, also known as Sett Vaults, are essentially automated DeFi yield aggregators. Users deposit their tokenized Bitcoin (like wBTC) into these pools, and smart contracts automatically manage those holdings to generate a return. Think of them as automated savings accounts for your Bitcoin within the DeFi world.

When you deposit tokens into a SETT, you receive corresponding bTokens. For example, depositing BADGER tokens gets you bBADGER tokens. These bTokens represent your share of the assets within the SETT and also earn interest. They can even be used as collateral in other DeFi applications. Anyone who deposits into a SETT earns yield in the form of the deposited token (according to that SETT's specific rules) 

DIGG: A BTC-Pegged Elastic Supply Cryptocurrency

DIGG is a decentralized cryptocurrency with an "elastic supply," meaning its total number of tokens in circulation automatically adjusts to maintain a peg to Bitcoin's price. The DIGG protocol uses smart contracts to manage this rebasing process.

If demand for DIGG is high, its price can rise above BTC’s price. In response, the DIGG protocol automatically increases the supply of DIGG, diluting the value of each token and bringing the price back down in line with BTC. Conversely, if demand is low and DIGG's price falls below BTC’s, the protocol automatically decreases the DIGG supply, increasing the value of each remaining token and pushing the price back up.

This automatic adjustment of supply to influence price is called "rebasing." It happens across all wallets holding DIGG. Crucially, while the number of DIGG tokens in your wallet might change during a rebase, your percentage of the total DIGG supply remains the same. So, if you owned 1% of all DIGG before a rebase, you'll still own 1% after.

What Is the BADGER Token?

BADGER is the native token of the Badger DAO. Originally, BADGER was designed as a governance token, giving holders the power to participate in decision-making. However, its functionality has expanded significantly beyond just voting rights. 

Now, BADGER also can be staked in designated Sett Vaults. Staking generally involves locking up your tokens to support the network and, in return, earning rewards.

Additionally, BADGER holders can provide liquidity to BADGER-WBTC (Wrapped BTC) pools. Liquidity providers contribute their tokens to these pools, which facilitate trading, and in return, they earn rewards.

BADGER Tokenomics

The total supply of BADGER is capped at 21 million tokens, mirroring Bitcoin's supply. This means that once all 21 million BADGER tokens are in circulation, no more will ever be created. This scarcity is a key factor in its tokenomics and potential value appreciation.

Badger DAO generates rewards for its users through the various DeFi applications built on its infrastructure. A portion of these rewards is distributed to BADGER holders, further contributing to the token's value.

To maintain a healthy and stable token economy, Badger DAO uses special mechanisms to manage the circulation of BADGER tokens. These mechanisms are designed to prevent overly rapid price increases while still allowing for healthy growth. 

Additionally, Badger DAO employs token burning mechanisms. Burning permanently removes tokens from circulation, which can help to limit the overall supply and potentially increase the value of the remaining tokens. These combined strategies aim to create a sustainable and thriving ecosystem around the BADGER token.

Conclusion 

Badger DAO successfully bridges the gap between Bitcoin and the rapidly evolving DeFi sector. By simplifying BTC’s integration into smart contracts, Badger DAO unlocks its potential for use in a wide range of applications. 

Ready to be a part of this bridge to the future of finance? Trade BADGER tokens on Tothemoon and make your voice heard through Badger DAO’s decentralized governance model.