BadgerDAO Retrospective & 2021 Roadmap
Sep 15, 2021
Since the launch of BadgerDAO 9 months ago, we have seen tremendous growth in our community, product offerings and traction. This is evident when looking at some of our stats shown above. It all started with community and a shared belief system which is about as grass roots as it gets. Born from a product that was built by a few early believers with a willingness to put the control in the hands of its community from the get go.
Every day we have contributors from around the world excited to work on the protocol and add value where they can. All come directly from the community with a desire to have an impact on a product they consistently use.
It’s from these contributors that our product vision continues to expand and grow. For that reason I wanted to share on behalf of everyone a retrospective of how far we’ve come and where we are going with our products.
Bitcoin + DeFi = 🧡
Our guiding star remains the same as when we started, Bring Bitcoin to DeFi. The opportunity in front of us is MASSIVE. Only 1.22% of native BTC is being put to work in DeFi today yet it represents a 42.5% dominance of the total cryptocurrency market cap ($860B). Today there is no better decentralized protocol primed to lead the way in enabling millions of people to earn on their Bitcoin than BadgerDAO.
Credit to DeFi Pulse
We’ve laid the foundation with the products necessary to enable Bitcoin to bridge to other blockchains and to start earning interest all while having control over your assets and complete transparency into how that Bitcoin is being put to work. Something not possible today with centralized lending/borrowing providers who have amassed billions of $$’s in deposits.
Coupled with the gamification of our dapp and token mechanics through tools like Badger Boost, we’ve created an engaged community consistently looking to expand and evolve our product offerings.
Let's take a look at our current suite of products and where we are going.
Today we have 4 core products:
Sett Vaults — Bitcoin yield aggregator that enables users to earn through a variety of smart contract based strategies. $665M in TVL
Badger Bridge — Users can bridge native BTC to Ethereum and start earning interest through our “Mint and Earn” feature with just a few clicks. $300M in total volume to date.
Interest Bearing Bitcoin (ibBTC) — A synthetic Bitcoin that earns interest simply by holding it. It’s backed 1:1 by a basket of our different interest earning Bitcoin vaults. $40M Marketcap and the 7th largest synthetic Bitcoin in the industry.
DIGG — The first rebasing asset tracking the price of Bitcoin. 5300 Holders.
It’s clear to see how all these products work together and help bring BTC to DeFi but it’s critical we anchor ourselves around an overall product direction for the future.
Where are we going? The BIG Picture
⭐ Our direction is simple, to be the most trusted place to earn interest on your Bitcoin ⭐
Both in our app and others through integrations, with 1 click users can put their BTC to work, all while maintaining control of their assets, knowing exactly how their BTC is being put to work and having ownership in the direction of the product/business.
Users don’t need to worry about which chain, assets to deposit, types of vaults etc. Instead they simply deposit and let our smart contracts do the rest.
We believe this is how millions of users can onboard into DeFi through BadgerDAO.
What does it look like?
We’re focused on bringing millions of users to DeFi but not all users are the same. It’s easy today with such a young industry to assume the mass market will have the same expectations when using products but the reality is they won’t. That’s why we want to be able to service both power and retail users.
We envision our dapp evolving into;
- ibBTC — Retail users looking for the easiest way to earn on their Bitcoin in Bitcoin with 1 click. The onramp for millions of users.
- Badger Pro — For advanced users looking to get an optimized return, define their risk parameters, take leveraged positions on their deposits and earn in a mix of BTC & their favourite tokens.
Want to earn 4% on your BTC in BTC with 1 click? Get ibBTC.
Want to earn 40% APY on your BTC deposit in the form of Curve, Convex and Sushi on Polygon while getting max boost because of your BADGER/DIGG holdings? Use Badger Pro.
How Do We Get There?
The big picture may sound simple but there is a lot of work to be done around vault infrastructure, bridging technology, yield strategies and a variety of other areas before it can become a reality.
The infrastructure to enable a seamless experience where users can quickly earn interest on their BTC using DeFi is yet to be developed and there is a big opportunity for Badger to spearhead this.
By making progress toward introducing these functions and upgrades systematically, we can then tie them all together with a beautiful UX/UI in the near future for a simple 1 click “Deposit and Earn” option via ibBTC.
The following systematic improvements aren’t happening independently but at the same time.
- Enhanced vault infrastructure (single deposit/multi strategies)
- Vault Deployment on multiple chains
- Multiple new yield strategies (partner first)
- Native BTC deposits in seconds on all chains (via ZeroDAO)
- ibBTC liquidity/utility across all chains
- Activating gamification mechanics (NFT’s, tasks to earn, boost enhancements etc.)
It is through these improvements that we’ll be able to introduce more partner first vaults quickly, give users a better experience, launch across multiple chains for more deposit options, establish a framework to support underlying yield on ibBTC and become the best place to put your native BTC to work.
The foundation of a 1 click to earn UX is our Interest Bearing Bitcoin (ibBTC). Enabling users to go from native or tokenized BTC into ibBTC in seconds will make it the easiest onramp into DeFi available. An onramp from which any decentralized or centralized platform in the world can integrate with little effort on their end.
Users won't need to know anything about smart contracts, yield strategies, or different blockchains. There are no deposit limits, minimal fees and it’s redeemable at anytime. All they need to do is hodl.
It is backed 1:1 by Bitcoin in our vaults, will have a consistent return, is completely transparent and non custodial and acts as a super collateral that is composable across all chains. It’s a retail users gateway into DeFi.
- Liquidity isn’t huge yet ($50M currently)
- There isn’t much utility
- It’s not on all chains
- APY fluctuates between 1–4%
- You can’t mint it with native BTC
The above speaks to our systematic approach to making this a reality. Since launching ibBTC and our Bridge just 3 months ago, we've been making consistent progress every day. The technology is not there yet but it's advancing quickly and we’re at the forefront of developing it. It takes time but this is exactly what we’re working on and will share more details around in the roadmap section of this post.
Some of our current focus is around;
- Restructuring how ibBTC earns APY to have a baseline 4%+ consistently
- Native BTC > ibBTC through our bridge which is almost complete
- More and more of the most popular dapps are integrating ibBTC which will increase its utility and liquidity
- Making ibBTC bridgeable as more L2’s and new chains emerge
Any platform in the world that wants to offer yield on BTC to its users will quickly integrate our BTC > ibBTC toolkit.
The alternative is to build a lending/borrowing desk or outsource to existing desks who rely on old school ways of generating yield on assets. Managing contracts, counter parties, both sides of the trade, centralized trust limitations etc. Add to that the lack of ways to actually earn on digital assets outside of DeFi (mostly lending to short sellers) and Badger looks like the gold standard.
Let’s not forget about institutions and corporate balance sheets desperate to get a piece of that sweet sweet yield in DeFi. Which digital asset do they or will they hold first? BITCOIN. Which asset will they want to earn on first? BITCOIN. What’s the easiest and most trusted way to earn on it? ibBTC.
More similar to what we have in the app today, Badger Pro is for advanced users. They decide how to get the most out of their deposits through decisions like;
- Which chain has the best APY on a certain BTC flavour?
- How much BADGER or DIGG do I need to increase my boost to 2000x?
- Maybe I can mint ibBTC from my existing vault position, borrow against it on CREAM and deposit even more BTC in Badger?
It’s through Badger Pro that we can support the 1 click experience of ibBTC. With billions of $$’s in BTC deposits we can continuously evolve the framework around how fees and token rewards work synergistically to support a healthy and high yielding ibBTC.
At the foundation of Badger Pro is our partner first crosschain vaults and gamification mechanics.
2 months ago we made the conscious decision with strong community support to reduce the farming and dumping of tokens we earned as yield through our strategies from other protocols. We instead optimize those rewards for users to help them earn an even higher yield while supporting our protocol partners.
Through this approach it enables BadgerDAO to get consistently higher yield on BTC vs other protocols while supporting the growth of the entire ecosystem. This also enables Badger to capture certain influence and the ability to sustain that yield since we have large positions that can be leveraged for governance in our partners protocols.
These large yields give tons of flexibility to the DAO in terms of how those yields support our other products like ibBTC. Another benefit to this approach.
As yield opportunities increase on new L2’s and crosschain, Badger intends to launch vaults to support our partners which have shown continued interest in launching their dapps there. With uncertainty around the traction they will get on other chains, it’s trusted partners like Badger that will help drive liquidity, native asset staking and users for their protocols.
With ibBTC gaining traction crosschain it will enable our partner vaults to be even stronger with ibBTC as the deposit-able asset. With fragmented BTC flavours across every chain, ibBTC will be the consistent Bitcoin they can use across all chains for the best returns. Especially when those yield opportunities are the highest among any BTC flavour due to our partner first strategies!
Gamification and Tokenomics
Badger prides itself on gamifiying the experience for users in our app with a variety of innovative approaches.
- Our unique Badger Boost system for optimizing yield on Badger and bringing inherent utility.
- Multiple NFT launches
- Calculating a users Badger score based on in dapp actions and whitelisting them for new product launches
- Airdrops to users based on their on-chain behaviour
It’s a testament to our unbelievable community as they have spearheaded these gamification mechanics to get more out of their experience.
Badger Boost is the foundation of our tokenomic and gamification mechanics. Aligning users that are committed to supporting the future of the Badger protocol along with continuing to reward BTC depositors without that vested interest is why it’s so important.
As users start using our protocol across other chains, Badger Boost will tie the utility of the BADGER token together. You could have deposits across 3 chains and be receiving maximum boost on your BTC, something that is a key differentiator across other protocols, and is important for smaller depositors that aren’t willing to pay higher gas fees.
Furthermore, we believe gamification as a whole is going to explode amongst web3 in the near future and we’re primed to be at the forefront especially with a relatable brand like BadgerDAO. Your digital identity will be your passport to different benefits amongst your favourite dapps.
Our NFTs will play an important role in this. The intersection between being a proud badger, showcasing who you are to the world through Badger NFTs while receiving benefits when using dapps is powerful. It helps create stickiness with existing users and opens up a whole new onramp for new ones.
Are you a Badger?
“ Great take advantage of max boost on your BTC deposits across any chain”
“ Make sure to get a Badger NFT and represent proudly.”
“ Get benefits across our dapp and the great ecosystem”
It’s at this intersection that we will continue to innovate and give opportunities to advanced users to get the most out of their Badger experience, a key differentiator among our competitors that will keep our community super engaged.
Now that we’ve outlined our grand vision, lets digg into the progress we intend to make through the rest of 2021.
Partner Vaults: Finding attractive new yield opportunities for BTC depositors is always on the top of the list. With more internal resources and agile infrastructure we will be launching quite a few new partner focused vaults over the next 4 months. As mentioned in previous sections, taking a partner first approach will enable us to offer higher yield to our users because of the value we add to our partners through these strategies. We are actively developing strategies for Balancer, Yearn, Convex, Curve, mStable, Sushi, aave and others. One strategy in particular that I think is worth calling out is a new locked CVX (bvLcvx) vault which will enable users to get boosted yield on their CVX while supporting the Convex protocol. On top of that users will get additional Badger rewards and through this new strategy we intend to attract a significant amount of CVX that will help Badger have a say around how CRV rewards are allocated to BTC pools.
Crosschain: These initiatives are a top priority for September and Q4. We learned a lot through our crosschain expansion to BSC earlier this year. The biggest learnings have been around the need to have an agile infrastructure across the whole stack to be able to launch on new chains quickly while creating a level of automation around maintenance. This unfortunately was not where we were when we initially launched on BSC. After months of preparation we feel like we are finally there. We intend to launch our vaults along with emissions both in Badger and partner tokens on Polygon and Arbitrum in September. In Q4 we will be evaluating 2–3 new chains based on user adoption and opportunities for yield on BTC. We are looking into Avalanche, Optimism, Solana, Fantom and a few others.
UI/UX Upgrades: Enhancing the user experience of our dapp is critical especially as we work towards onboarding more retail users into DeFi. We are constantly talking with the community to gather feedback around what improvements they want to see from Badger. Just 2 weeks ago we released one of our largest app upgradeswith a bunch of tools for tracking your performance, understanding how to deposit, visualizing your token balances in a LP position along with a detailed breakdown of fees users pay. In Q4 we have a “portfolio” product in the works that enable users to access a single dashboard for managing their positions on Badger. We’re also currently working with a team of UX/UI specialists to conduct a full audit along with developing the next iteration of the app which will start to delineate between Badger Pro and ibBTC.
Infrastructure Upgrades: Today ibBTC has a relatively consistent underlying APY of 0.5–2%. For it to be the obvious choice due to its productive nature among synthetic Bitcoin, the underlying APY needs to be consistently higher. This is also important for it to be the foundation of our “Deposit & Earn” product as users who just want to earn on BTC easily will want a better return. Today CEX’s offer 4–6% on BTC deposits and that 4% threshold is our target. The team at Badger has developed a model that could potentially do this at scale by leveraging the yield across all our vaults and reinjecting a portion into ibBTC to meet a baseline hurdle rate. See here for the community discussion and model. With positive sentiment among the community so far, the technical team will work over the next few months to integrate this model and create stability in the underlying return of ibBTC, making it easy and attractive for decentralized and centralized platforms to integrate.
Crosschain Liquidity: It’s critical that ibBTC has a large amount of liquidity across multiple chains/L2’s along with integrations with many protocols on those chains. Not only is there a unique opportunity to become the constant BTC across all chains due to the current fragmented nature of tokenized BTC (BSC with BTCB, wormhole BTC on Solana etc. etc.), it also builds a stronger foundation for vaults on ETH as every ibBTC is backed 1:1 by BTC deposited there. Currently ibBTC is available on Solana and Polygon with almost 30% of the supply living on these chains but in Q4 the intention is to expand to 5+ additional chains. Those chains will correspond with where our vaults and bridge live. That way users can take native BTC and start earning interest on their favourite protocols crosschain in a few clicks while increasing ibBTC liquidity.
Utility: For ibBTC to be the most dominant and productive Bitcoin in the world it needs to have utility. Our entire suite of products become that much more appealing when ibBTC has a variety of options to be put to work. Users can get liquidity and consolidate their vault positions into ibBTC and the bridge becomes more useful if people can go from native BTC into ibBTC. We currently have ibBTC integrated across a variety of protocols for liquidity provisioning and lending/borrowing on places like CREAM, Sushiswap and Saber. In Q4 we will be releasing a more proposals for onboarding ibBTC onto prominent DeFi protocols not only on ETH mainnet but on other chains as well. A big step forward is integrating with Curve which is critical for our bridge (uses Curve for swaps), crosschain liquidity (they’re everywhere!) and sustainable yield on our vaults (60% of TVL is in Curve). That process has already begun with a recent factory pool and gauge vote initiated here. As we build a strong utility track record in later Q4 we will begin the process of proposing to onboard ibBTC to Maker, Compound and Aave. With more utility comes higher demand which increases the supply of ibBTC in the market. This then translates to BTC locked in our vaults earning revenue for the DAO as each $$ in ibBTC is backed by a $$ in BTC deposited in the vaults. HUGE FOR SUSTAINABILITY!
Minting/Redeeming Upgrades: Today users can only mint ibBTC from a Badger vault position. Although that is great for consolidating your existing vaults and unlocking liquidity on your interest earning positions, it’s not great for users with native BTC or other tokenized BTC. In Q4 we will introduce the ability to mint ibBTC directly from native BTC along with renBTC and wbtcBTC.
Adding support for host to host bridging and 5+ chains: As we enter a multichain world, it’s important that our bridge offers users the ability to not only bridge from the native BTC chain but the ability to transfer assets between other chains. We’ll be launching host to host bridging for any ERC20 including all the tokenized Bitcoins. We’ll also be launching the ability to bridge BTC to Solana, Arbitrum, Polygon, Fantom and others in Q4. With these upgrades we intend for the Badger Bridge to be the most used bridge across the space.
Launching new mint and earn functionality crosschain: Being able to bridge crosschain is important but our most used feature is “mint and earn” where users automatically get deposited into our vaults on those other chains to start earning interest right away. As we launch vaults and connect our bridges we intend to activate mint and earn crosschain on all the above mentioned chains in Q4.
Bridge Bitcoin in Seconds via Zero Protocol: In Q2 we announced our first incubation project, ZeroDAO, which created a protocol that enables users to bridge crosschain in seconds not hours. They’re currently in the beginning stages of auditing and once complete we will look to integrate their protocol into our bridge. Users will be able to go from native BTC to ibBTC on any chain in seconds. A massive upgrade in user experience along with taken strides towards our desired state of deposit and earn.
Stability vault: In collaboration with the Stabilize team, Badger built a stability vault for DIGG in Q2 of 2021 but has yet to release it. After completing the appropriate audits and preparing for release, DIGG was stuck in a series of long negative rebase cycle which would have done nothing for the launch of the stability vault. It needs many consecutive positive rebases to start building a wBTC reserve which can then be used at certain threshold once in negative rebase territory to ensure it moves back positive. With the success of rebase mining and the longest positive rebase streak in DIGG’s history, we intend to launch the stability vault in Q4.
Utility: With the drastic volatility and lack of oracles for DIGG in the last 2 quarters, it was difficult to get DIGG integrated across protocols to increase its utility. Although the bDIGG vault allows for it to be a composable asset, we faced challenges in having it approved. With more stability comes an easier road for utility and the goal for Q4 would be to have bDIGG available for lending/borrowing across a variety of protocols on mainnet.
Rebase mining extension: After a success rebase mining round 3 and $2.6M in DIGG payout for option holders, we’ve seen substantial proof that this program helps bring stability to Digg along with the aligned incentives for positive rebases. We intend to extend this program for Q4 and introduce new mechanics to make it even better.
Tokenomics & Gamification
New NFT collection: Community member Vipes started making custom Badger avatars for other members upon request. Over the last few months they've exploded amongst our discord and hundreds of people proudly represent a unique Badger as their profile picture including the core team. We will be turning these into a 21k NFT collection in Q4 with a variety of unique mechanics including the actual distribution. The intention will be to use these NFTs as a way to expand our community and gamify activity within the Badger app. Examples are rewarding users with NFTs monthly based on community contribution, new BTC deposits, levelling up in the boost system, staking Badger/Digg etc. This collection will also help our community not only say they are Badgers but show it to the world.
BADGER token utility: Having utility for BADGER is critical to expanding our community. In Q4 our goal is to have BADGER onboarded with major DeFi protocols including Maker, Compound and Aave along with a variety of others. Subsequently we will be able to have vault strategies for BADGER tokens to create further stickiness for our community.
Extending Badger Boost crosschain: With our aggressive launch plans for the protocol crosschain it’s important that a users Badger Boost will be counted no matter where they use BadgerDAO. With Polygon and Arbitrum launching in September we’ll work to include Badger Boost on these chains and those that follow.
We have large aspirations for the near and long term future of BadgerDAO's product vision but it’s only as a community we can make this a reality. The progress we make against our 2021 roadmap is all about laying the foundation for bringing Badger to millions of users in 2022. These systematic improvements will allow for our big picture vision to become real next year.
Please join 15,000 other Badgers in our discord to share your feedback, suggestions and/or get involved with bringing this product vision to life.