DeFi on Bitcoin: BTC DeFi project Badger DAO diversifies its $21 million treasury
Badger DAO is one of the only Bitcoin-focused DeFi products on the market – and now the project is expanding its
Badger DAO, the Bitcoin-focused decentralised finance (DeFi) protocol, has diversified a $21 million treasury across its „strategic partners“. The partners are Bitcoin Up expected to help add value to DAO governance while bringing long-term bitcoin liquidity.
We’re excited to share that we’ve completed a $21M diversification of the Badger DAO treasury with strategic partners @0x_b1, @polychaincap, @paraficapital & @blockchaincap.
21M Bitcoin ➡️ 21M Badger ➡️ 21M Diversification
All the details 👉 https://t.co/0AntGBZhnq
Thread 👇 pic.twitter.com/Yyu42ilBB0
– ₿adger DAO 🦡 (@BadgerDAO) March 3, 2021
The move came after „Badger Improvement Proposal 37 [Treasury Diversification through Strategic Partnerships]“ was passed in early February.
Badger brings Bitcoin („Glassnode crypto researchers: Bitcoin investors hold on to their coins ironclad“) to DeFi by building use cases for ‚wrapped BTC‘ products. Over $2 billion worth of various cryptocurrencies is locked up on Badger, $36 million in annualised profit has been generated, and a treasury of $600 million has been amassed across Badger (a governance token) and DIGG.
Protocol is now expanding its aspirations by one step. According to the announcement, the new strategic partners – crypto funds Polychain Capital, Parafi Capital and Blockchain Capital, and anonymous DeFi investor „0xB1“ – would now be involved in steering the platform, helping the protocol grow, providing long-term liquidity and building more synergies with other institutional funds.
Over the past year, nearly 1% of circulating Bitcoin (Go to Buy Bitcoin at eToro guide) has been migrated into DeFi’s Ethereum ecosystem and made productive in various return opportunities, according to Santiago Santos, partner at ParaFi Capital.
More bitcoin holders would look towards interacting with DeFi apps, and Badger wants to capture the growing share of that demand.
Jacob Phillips, a technical researcher at Polychain, says that by aggregating existing Bitcoin DeFi protocols, building a range of new BTC-focused DeFi products and economically targeting a community excited about BTC in DeFi, Badger has quickly become a point for new and existing Bitcoin liquidity.
No „21“ meme
In the press release, Badger explains that the diversification of the hoard marks the beginning of the „Badger Backstop“ fund – an effort that aims to continually move towards securing user assets and growing the protocol „regardless of market conditions“.
The announcement states:
„We plan to use some of the DAO capital to create an insurance fund that will provide more protection for our users on the platform – which will increase TVL in the long run.“
This is to avoid the situation where development of the protocol is halted in the event of an unfavourable market (last seen in the aftermath of the infamous 2017 ICO bubble).
Meanwhile, despite the „21″ meme (21 million Bitcoin, 21 million Badger, and $21 million diversification), Badger says the move was just the beginning of three diversifications to come.
„Badger is relentless, fearless and unwavering,“ the memo concludes.