AMA with Chris Spadafora, Founder of BadgerDAO

Transcript

got badger chris from badger who is a co-founder of badger we have an opportunity as the bankless community to ask chris anything i think he's representing the badger project here today this is uh this was brought up by communityvote so we asked who you wanted to have on the next ama and there was a resounding you want badger so we are bringing badger to you just some ground rules rules on this community ask me anything of course you can ask any question you want dave and i will try to field those questions to chris you can ask those questions in youtube we are broadcasting this live right now also in the discord bankless members community we will prioritize questions there we do ask me anythings the second and fourth wednesday now of

the month so this is coming at you live on a wednesday 12 p.m eastern time 9 a.m pacific time this is your time to ask questions of these fantastic projects david can you talk about why we uh are having badger on this for this conversation there's there's a theme here that i think is really important yeah badger by popular demand coming into the bankless livestream just the amount of energy and community excitement around this project has really just blown everyone's minds and what badgers really trying to do is to to generate btc infrastructure in ethereum's d5 so just providing financial a suite of financial tools around btc but on ethereum and so it's trying to bridge

the communities which is always an ambitious endeavor which is always in my opinion a noble endeavor to help bridge the gap between the the btc the asset and the ethereum economy and so we're going to dive into what these suite of tools looks like and how they can help bitcoiners uh get their bitcoin expressed into defy and this this project has just like i said just generated a ton of community hype and excitement and so by popular demand we have badger dao here on the banquet ama absolutely i think there's a uh a question in the minds of of investors and everyone in the crypto community is it going to be bitcoin on defy or is defy going to come to bitcoin but to bitcoin i've had some recent debates

around this too and i'm super curious to hear what chris from badger says we are going to come back with chris in a minute but first we want to tell you about the sponsors that made this episode possible gemini is the world's most trusted cryptocurrency exchange i've been a customer of gemiini since i first got into crypto in 2017 and it's been my main exchange of choice to make my crypto buys and sells gemini is available in all 50 states and in over 50 countries worldwide and on gemini there are markets for over 30 various different crypto assets including many of the hot defy tokens and it's one of the few exchanges that has liquid dye markets gemini just launched their earn program where you can earn up to seven point four percent interest on 26

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bitcoin bonus check them out at gemiini.com go bankless ave is a borrowing and lending protocol on ethereum and just recently released ave version 2 which has a ton of cool new features that makes using ave even more powerful with ave you can leverage the full power of d5 money legos yield and composability all in one application on ave there are a ton of assets that you can deposit in order to gain yield and all of those same assets can also be borrowed from the protocol if you have deposited collateral here you can see me getting a 200 usdc loan against my portfolio of a number of different defy tokens and eth i'll choose a variable interest rate because it's a lower rate

than the stable interest rate option but i could choose the stable interest rate option if i wanted to lock that interest rate in permanently one of ave's v2 features is the ability to swap collateral without having to withdraw your assets trade them on unit swap and then deposit them back into ave ave does all of this for you all in one seamless transaction so you don't have to repay loans in order to change the collateral you have backing them check out the power of ave at ave dot com that's aave.com [Music] bankless community i'm super excited to have chris spotafora who is on the founding team of badger dow on this ask me anything chris how you doing today i am great ryan how are you i'm doing

great um look you guys are putting out a lot of energy these days around this theme of um bitcoin on d5 and it's super exciting but i think we should maybe start with the the why for the community could you explain badger dao and and start with the why so why does badger exist what what is the mission here the mission's straightforward right it's to build products and infrastructure necessary to bring what what i and many of the people in the community believe to be the best collateral ever invented into open finance and and to really accelerate how it gets there and when it's there give it utility because there's a you know the key statistic to think about is

point seven percent of all bitcoin is is on other chains and is mostly obviously on ethereum but like that's how little is actually been wrapped or bridged or whatever you want to call it so that's our mission but we don't want to just do it like a normal company or whatever you know we're completely community owned and and we're trying to rewrite the playbook on how businesses go to market how businesses operate how these open communities or collectives actually work to produce you know revenue and manage hundreds of millions of dollars and do it in a decentralized way right like that was a big part of our mission is how do we push forward this idea of dowse and and how dallas could be self-sustaining businesses

again with you know substantial amount of revenue and profit not just you know a way for someone or a group of people to kind of structure themselves and do certain things it's like let's use the power of the the technology that we can build today and and have a community run and own it so that those are some of the things that that really tie badger together and share the value and beliefs of the community so chris let's talk about the the genesis of badger where did this initial idea come from and and talk about the decision to um focus on actual infrastructure on other change rather than doing something like wbtc or nbtc yeah so you know it's been shoot it's already april now

so it's been almost a year since we started thinking about it me and a few friends i've been in the space about eight years um got into bitcoin relatively early it was an ethereum when it launched and i've always just kind of been on all sides of the fence right like i've always perceived bitcoin and ethereum to be completely separate in different things and i never was a fan of you know a lot of the maximalism that that um that caused a riff right i always looked at is you know one we're one industry trying to push everything forward and we need to have each other's backs and we need to collaborate to get there um so it started with you know how do we build more financial decentralized financial products to put the bitcoin to work right put bitcoin to work that was

really where it started and and when it started i actually spent quite a bit of time digging into a lot of the other alternatives that are call them side chains to bitcoin right um you know the liquids the rsks the things along those lines and the fact of the matter is then and now you know the infrastructure the development community the interoperability and composability none of that stuff the tooling none of that stuff really exists um and it was a very quick hey that it's not going to make any sense to build it here and we're going to focus on building on ethereum and and accelerate how we can how we can take that to market so that that was kind of the earliest stages and around then too

was when we started to see you know the yearns and some of these projects that were open communities actually bring products to market that had great product market fit generate millions of dollars in revenue and operate in a way where it was like you know open anyone can come anyone can collaborate anyone can get involved and um anyone can build some really cool stuff with the developer first mentality of the of the community organization and that was when a lot of light bulbs went off for us and we said you know what this is the path we can rewrite the playbook on how businesses get to market we're going to focus exclusively on how do you build the products and infrastructure to get bitcoin there and bring utility to it and um and we're going to build these products before we

launch at least what we felt were good products to start with which were our vaults which are similar to urine vaults except dedicated to tokenized bitcoin so we optimize the yield that users can get out of certain bitcoin op positions and then what our first attempt was at creating a synthetic bitcoin which is digg which is similar to ample fourth except um intended to peg to the price of bitcoin and uh let's go to market with these and let's do it the right way right let's let's be transparent with um who we are let's make sure everything was audited let's you know engage other communities as we prepare for launch like let's have the communities make the decisions on day zero well before launch so when we got the you know the discord started in

september of last year um you know it was really me and a few developers kind of putting stuff out hey this is the plan this is the token structure here are the products here's the code but here's here's all these things like let's figure out how we actually get it there and get it to the finish line it took almost three months but excitingly enough a lot of those individuals that got involved then were today their long-term contributors at badger they work with badger full-time um and um they've been able to get us from where we were to where we are and there's 60 people now working on the protocol almost four months after after launch which is pretty mind-blowing and um you know our products you know our

vault product which is our core product you know holds about 1.2 billion worth of bitcoin almost you know 20 percent of all the tokenized bitcoin on ethereum so for us um it was important to you know get off the ground with with the right products but also with the right community because if we were going to try and rewrite this playbook we needed people that shared in the same values and beliefs because if it was if you didn't the longevity and the sustainability and the ability to have people actually work and dedicate their time effort resources on the protocol it would have been next to impossible to do so what we did was we said okay we're going to look across ethereum and collect and we ended up collecting 32

000 addresses and said people that have done these 19 actions that we felt aligned with like kind of three pillars of our values one they participated in decentralized governance so if they voted on sushi or harvest or yearn or one hive or things along those lines uh if they use tokenized bitcoin in d5 so you provided liquidity on curve balancer sushi uniswap um you lent it out on compound maker whatever it may be and then finally if you contributed to public goods and we were the first group to um airdrop anyone that contributed to git coin through one through rounds one through seven um and that was really like we felt like those people would be the exact type of

people that really helped us get to where we needed to be and that was really how we launched and we said hey you know anyone that's done these actions come claim some badger and by the way here's our vault product and it just so happens to have i don't know a billion percent apy so why don't you why don't you get involved and uh and that was uh that was the start of it i think you guys have crushed it on like building out your community and there's almost a playbook there and we've got already some some questions coming in from the bankless community on that playbook and we'll definitely get to that i just want to camp on this this this question you know going back to the why so uh why is bitcoin on d5 important you said it's because look it's a it's a

over a trillion dollar asset right now and only a small percentage of it is actually being put to work we put out a post last week lucas campbell from our team put it put out a case for like the the trillion dollar opportunity for tokenized bitcoin he was specifically talking about uh rent btc and that's the opportunity it's either all of this bitcoin ends up just being you know held forever or it's being put in productive use in kind of the crypto banking ecosystem or it's in d5 right and you guys are saying it should be in d5 i that that post though did chris trigger a uh back and forth i had with um anthony pompiano where you know he he was very much of the like mindset of uh no not bitcoin on d5 right

um what we're going to have is defined bitcoin and i want to get your take on that because i've got sort of my preconception i kind of compared it to like yeah but that's really hard because you're essentially trying to program on a you know ti 83 calculator when you have like a full pc with a full stack and a virtual machine and everything else um but he has kind of a different take on that i'm curious to get your take so having explored what it would take i assume you did explore this to build defy on bitcoin you came back to ethereum what's your take on that whole debate my take on the debate is there's no right or wrong answer so do i think there will be financial services on the

bitcoin network yes do i think those those applications and the ability to put your bitcoin to work on the native bitcoin network are going to happen anytime soon no i think they're they're quite a bit of ways away because of a lot of the things that we that i mentioned earlier right the developers the tooling the composability the the ease of usability you know think about how long it took ethereum to get to the point where you know with a browser extension you can pop to different applications and start putting a variety of different assets to work and then have you know liquidity deep liquidity and markets and a variety of different players and products and like

it's it's an ecosystem that in itself is going to take years to build on bitcoin and um because of that i just don't see and i don't know and i don't think that's like oh okay guess what like you know bitcoin's never going to be able to catch up to ether or other change i don't think that's going to be the the case either because so much of the asset class is there already right and you have like i said 0.7 do i think um a hundred percent of bitcoin is gonna be moved of course not do i think 30 or 40 is going to be moved i sure do now what about the other 60 70 percent i think you know there's

going to be a whole segment of the market that doesn't give a [ __ ] about that and just holds it right i think there's going to be a good segment of the market that wants to maintain some of the security posture that comes with the bitcoin network um you know a lot of and i saw i saw anthony talking about a few folks like sovereign or whatever and you know i know this auburn crew their good crew they're trying you know they're doing their thing but at the end of the day you know if we're gonna call something what it is not speaking about sovereign in general but just more of this concept um anything that could potentially be built on bitcoin today is not technically being built on bitcoin right and if you like rsk is a good example like all these different chains right like it's

not technically on bitcoin um there's kind of like this multi-sig ish thing happening outside of that so like the whole argument around decentralization and security for bitcoin in particular is somewhat removed immediately because now you have a level of centralization that has to happen to facilitate these types of applications and services but you know my take is and badgers in you know my opinion as as a community member at badger is you know we are chain agnostic you know we believe bitcoin is going to be on a variety of chains including being used on the bitcoin network and we'd love to support that when the time comes um but today the majority of it's being

used on ethereum and we're starting to see other chains uh really start to accelerate even just yesterday we launched vaults on finance smart chain and we're intending to launch on layer two solutions and a variety of others down the road but you know that's our take ryan yeah it's a good take you know the interesting thing here is i think there's something in the thesis for everyone right um if you're a bitcoiner if you're a bitcoin proponent you love the asset itself you want bitcoin to be propagated everywhere you want any crypto banks you want to defy you want it everywhere and if you're uh maybe a d5 maximal somebody who believes in kind of the bankless vision then you want all of those assets to come into defy right it ethereum serves as a

gravity well for all of the world's assets as we've we've said so often uh before so there's kind of a win in both places but i think this maybe brings the first um bankless like bankless consumer question here uh somebody from the community asks a question about the binance smart chain actually because and i think this is a deep question so let me post it this is from graham why are so many projects according to binance smart chain where it is centralized and controlled by 21 validators is it for fear of being forked there do you believe in the chain is it user choice i think he's presenting that question to all projects but also to you specifically why why uh binance smart chain so two reasons one um in no particular

order that is by far the the chain with the most bitcoin being put to use outside of ethereum and we care about bitcoin right we care about utility for bitcoin regardless of where it is and making it easy for anybody and everybody um to put that bitcoin to work two um well actually there's three reasons two it's driven by the users right i couldn't even tell you how much user demand was coming around finance smart chain and how many users were already using but we and we saw that even just with our launch yesterday we launched with interest-bearing eth assets so like we didn't say hey bring badger and dig we said no you got to

bring the staked version of badger and the staked version of digg cross chain and then lp that and then deposit in our vault right so think about all those loops we still had 25 million dollars cross chain in in under 24 hours right like that tells you a lot and obviously the apys are high and you know all those types of things happen but you know the the proofs in the pudding as it relates to the the user demand and then i'd say the third piece is um is ease of deployment right like it's it's it was not hard for us to really ramp up to deploy our infrastructure over there from the graphs the keepers the actual contracts

the multi-sig infrastructure like you know and then for users to just kind of plug in with their meta mask and do what they've got to do there's such little friction now and um and i believe we're gonna see a lot of we're gonna see a lot of projects kind of flocking not flocking like it's our home like there's no doubt about that right like we're not at all and you probably could tell i'm canadian with the way that i said that but nonetheless like that there's no doubt right we're building a ton on ethereum and like ethereum's our focus at the same time we gotta we gotta provide utility where bitcoin is being put to work and we gotta we gotta uh fulfill what the users want and where users are spending their time as well so that's how we look at it i'm not concerned around forks and all

this type of crap for the core team at least and thinking about the product those are things that we thought about so chris i want to dive deeper into that because you said something that i want to tap into which is that eat you know ethan's the home oh am i muted oh no you're not muted no i'm not not to you guys on obs um uh and so you guys you said ethan is your home uh and so i wanna and then i also i personally i have skepticism as like the long-term usage of something like binance smart chain outside of a bull market right like you know there's a plenty of usage to go around during bull markets but during bear markets does that usage do those users and liquidity stick around and so i kind of wanted to dive deeper into what you mean by when you say eth is

your home right because many many assets become issued on ethereum first and then find their ways to other blockchains binance marchain like any other evm compatible ones and because because they're compatible with ethereum they these these assets can float around the the whole crypto world right not just ethereum but they were issued on ethereum first and foremost and so that ultimately settles to ethereum so when you say like ethereum is your home dive into that a little bit more like what does what does badger dao have on ethereum that perhaps maybe you can't replicate anywhere else or is is it actually badger dao really just a nebulous thing that exists wherever the users go how does that work out

well from a practical perspective ethereums are home because that's where governance lives and that's not going to change right um and that's obviously specific to our project because our project runs as a community governed initiative um so that's you know from a practical standpoint um from a not a not so practical standpoint when we're building um and integrating with different protocols and looking there's so much work to be done on ethereum like just enormous amount of work and even if you look at you know what we've brought to finance and what we're going to be bringing to other chains it's really like what we brought to ethereum a few months like when we first launched which is like you know here yield optimization vaults here's

the strategies that they run you know these are the types of things that it can do um and that was the extent of it and and when we look to bring things to market we're most likely going to be bringing those things to market first on ethereum and spending the time to really develop them there and then looking to how can we do it but also do it in a way where it's not a huge technical lift for us that's a that's a big thing right like you guys know and a lot of people know like you know finding talent's not hard not easy you know we've been lucky enough without doing the job posting to have 60 people working with us but neither here nor there we're stretched you know ridiculously thin on all the things that we're working on but there

is still so much of an opportunity um to to continue to be like the home for bitcoin on eath and there's so much more to the stack and to the utility tool belt that we need to build um because for badger today and i've said this so many times publicly but i'll say it again you know badger accelerated because they were the best you know best farm best apy for bitcoin right in december and january and so forth um but you know again when you look at the bull market you know that could sustain for a period of time especially when the majority of ours like many others yield is subsidized with token distribution and rewards right like that is not

sustainable at all like nowhere close to sustainable so for us there's still so much utility that we need to build and we're going to be building uneath and potentially looking to how we bring that to other chains down the road but that's you know that's what we think about when we think about um eath being our home and you know it's a quick piece around utility like where do i think utility can come for us and for projects like us you know it's it's interesting what's happened we've you know we've collected so much capital like billions of dollars in bitcoin and and a few other um like our native assets badge and so forth that you know we can create a sin you know use the synthetic layer on top to create a variety of other assets that

unlock the liquidity and create capital efficiency in those positions eventually becoming the best place to unlock liquidity in any btclp position um because that's where the majority of our our deposits are they're either curve ops unit swap lps or sushi ops so for us that's our focus around utility so that people can further participate in d5 and i think that's going to happen a lot like a lot of the protocols today are going to be more of the primitive protocols tomorrow and it's like how do you kind of transition to be more on the bottom of the stack than on the top of the stack just just one last one on this because i think this is all all part of the philosophy of the project and it's important then we want to go into quickly uh the components of badger down

make sure everyone listening understands those and there's some some other of your questions coming in but i want to ask this chris because i think this dovetails with what graham was asking is um do you worry that we lose the definition of defy somewhere in here so i think that's what really graham is is is kind of getting at right so when when we call something defy and it's really on the binance smart chain that's managed by 21 validators and looks a lot more like a crypto bank is it really defy and and maybe the answer that question is what's the definition of d5 is another question right so that's the question i'm going to ask you chris is what is your definition of d5 my definition of d5 is a financial

system that's predicated on peer-to-peer transactions right when i think about decentralized finance i think about that i think about removing the bloat of the middle man i think about um people being able to own and control their own assets and having the ability to participate in finance like they've never been able to participate before but because of the value proposition on both sides of the fence they're actually interacting with other individuals that are doing the exact same thing and that's you know that's kind of how i think about the future financial systems that we're building today but are going to obviously evolve tremendously in the future and so do you think that uh definition for d5 extends to something like the

binance smart chain i think so i think so you know if we go with that definition um you know if if someone's you know lping on on an smart chain and they're making a trade they're trading with someone on the other side right um you know they're using something like badger it's not like badger has control of those assets it's just a set of smart contracts in the end of the day um so yeah that's i think it does you know again it kind of goes back to and i know you know there's been some controversial things that you guys have gone into with a few folks online over the years but you know just in general you know i've

just never been a fan of of any type of purist type perspective on things because i think it it it moves the needle away from needed innovation regardless right like this is so ridiculously early anyways like what it is today won't be what it's like tomorrow but like an example okay here's an example if binance smart chain didn't come with such a which with such a powerful push in the last three months it wouldn't have accelerated something like multi-chain that the any swap team and andre collaborated on building to be pushed to the forefront as fast as it had they were looking at you know getting something off the ground six to nine months from now but because of that we're starting to see all these tools

and tooling being pushed to the forefront and the fact that we were able to through messaging through community engagement obviously through incentivization you know have 25 million dollars in in 24 hours move across chains like think back to like 2017 when everyone's going balls crazy about like atomic swap stuff and [ __ ] like that right like things are actually happening where it's going and the centralization of where it's going and all these types of things in my opinion don't matter nearly as much because of what's actually happening and how that's gonna be what you know what pushes what's gonna happen forward so much more you know so

much faster yeah i think look i think the the bankless take on that on this uh whole thing is um what what you're saying is true like the adoption of binance smart gene is actually good because it pushes ethereum to to scale more i also think we probably come at this with with different perspectives right like so badger dow you're all about optimizing yield for for bitcoin that's super important that's what the whole project is about um bankless has to have a little bit of a um a view a viewpoint perspective that is consistent with our philosophy in our name which is we're trying to remove the banks like what we don't want chris is to create a

a a worse system than the than the one we came from right it's like it's protocols not kings right and so where we see points for centralization for more banker control that's where we're less likely to to hit the accelerator and more likely to hit on the brakes but i agree like this is all going to evolve in the way that it needs to and ultimately ultimately if the thesis is right that you know the the most decentralized protocols most credibly neutral protocols will win then none of this matters it'll just play out in the way that it's playing out let's get to the components of badger dow now because i wanted you you referenced them earlier i want to make sure folks understand this

and i'm actually chris going to pull up uh the badger dow app to to explain this but can you tell us about first this first component that i think is important which is set what does set do so sets our name uh for our vaults so the reason why we called them sets was because that's actually the home of a badger so there's a lot of you know there's a lot of memeing that happens in our ecosystem um including the fact that you know the honey badger is is our our lead thing but nonetheless uh it's called the set because it's the home but they are actually individual vaults so if you were to ryan click on any one of these vaults it will give you the ability to potentially deposit or if you click that

button excuse me that button in the top right corner of each of those you could withdraw so each of these have different strategies and as you can tell each of them also have a different return on investment over an annualized basis and then if you if you see the far right that's the the number um the value in capital that's been deposited in that vault that's earning that specific interest rate now if you if you were to connect your wallet and you were a badger you would see the ability to claim badger and dig so every two hours there's a cycle that releases badger and dig to users and if you click on that you'll see the breakdown on where the rewards are coming from from that specific

vault strategy and then when you see something like badger awards and dig rewards those rewards would be claimable through the app which goes to kind of what i spoke about before right the organic yield and the lack of sustainability and inflating apy or or subsidizing excuse me not inflating apy for the purpose of you know providing a high interest rate for users so this is essentially how it works if you're looking at some of these um rap btc rap ether you would bring you would go to a sushi swap you deposit wbtc eat into their liquidity pool which is one of the largest liquidity pools for those assets and then you would bring that lp token to us

so what do we do you deposit it in the vault everything's non-custodial everything's smart contract based this we have active strategies on the back end for those vaults of course everything's transparent you can look at the vault contract see all the transactions you can prove exactly that you know there's 1307 bitcoins in that specific vault but for that vault strategy and why 147 million dollars is in that vault is because we optimized their sushi so what we'll do is we'll earn the sushi on your behalf we'll stake that sushi for x sushi which increases the apy and we do that without you needing to spend money on gas spend time effort and resources and mind power on the

appropriate strategy and through that strategy we're able to optimize you know the return on investment for the users so chris this brings me to another question that that's coming in from the bankless community and i i see a few different versions of tokenized bitcoin here right you've got wbtc looks like there might be some other versions here uh what's your take on the different versions of of bitcoin like what's the best tokenized uh bitcoin what's your favorite and what are the trade-offs between these well i'll reference um david here because he was on a podcast with my friend luke a little while ago and kind of dove into each of these you know

in general they're all different flavors with different risk parameters and different appetites for different types of users um wbtc in particular there's obviously centralization with bitco which also brings a higher level of insurance around you know the bitcoin deposits those are also kyc you look at some of the others like rembtc in particular they're not kyc those are power through the remvm which arguably are is more decentralized than a lot of solutions out there but when you dig into it as many people have already run to the surface there there is a level of control around those assets from a group of people part of the rem project so again trade-offs are

our perspective as always is we want to support as much bitcoin as possible in any form so even if you look at all those vaults there's all the bitcoins right there's ram btc sptc wbtc tbtc um we haven't gone as far to support some of the others just yet just from a prioritization standpoint all the other products but like you know hbtc and and then now we're supporting you know btcb on on finance um but yeah that's that's uh my take on that so one of these uh versions of bitcoin on ethereum is digg which we you hinted at earlier it's like ample fourth and it's that it's a rebasing token but it

rebases towards one bitcoin uh chris could you go into the details behind digg and kind of what the the goals of the dig product are sure so ryan um and whoever's controlling this you would need to connect your wallet to see all the details here the reason why we did that is just because it kills us from the amount of calls that it does i might not i might not dox myself on this i was about to say yes but nonetheless yeah so so digs a synthetic representation of bitcoin and we believe that there were certain mechanics that didn't need to rely on centralized custody to be able to bring bitcoin to those other chains so at the core of it we have the rebasing mechanics that are similar to that of ample fourth and that's

you know if bitcoin is um higher than the price of dig then there is an increase in supply why so it wants people to sell to bring the price down hey i had one yesterday now i have 1.5 i'll sell that point five and that's how pressure brings it down vice versa on the buy side now what we found is that there's a lot of inherent problems with that one um and admit very prevalent like david's laugh there but there's a lot of inherent problems in that one is composability right so it's very difficult for d5 protocols centralized exchanges any real counterparty even cross-train bridges all these things they can't support native um rebasing assets so

um that was one issue the other issue is the but when you look at the rebasing mechanics the buy side is really in our opinion broken right that's that's the broke because then what happens is the price is going we see we've seen this with dig we've obviously seen this with ample fourth the price goes down and instead of people wanting to buy they're just selling to get out quicker so they don't you know it's like trying to move away from the falling knife so what we're doing is and what our intention has always been is how do we leverage the vaults and automated strategies and smart contracts to optimize these mechanics to stay closer to the peg that was our mission with

launching dig so when we launched dig we obviously launched with the dig vault we obviously launched with lp pairs and things along those lines and dig's been around now two months i think it's spent about 35 days above peg um you know a few days at equilibrium and and then the rest below so it's been you know a little bit of an up and down um but these vault strategies allow for two things and this is already apparent so when you deposit in the dig vault you get a token back it's called bdig and it represents your share of the vault or the pool that token is a standard erc20 token and it can be moved anywhere and what's happening is your rewards and the apy is being auto compounded in your position

so whenever you want your dig back you just come to the vault and withdraw the the appropriate amount of dig so what that's allowed us to do is have that be integrated on money markets like even with finance smart chain like yesterday was the first time a rebasing asset crossed chains and was able to be put to work without some of the limitations that that come with it um the other side of it is is what we're bringing to market in the next probably in the next three to four weeks which is our stability vault so we're going to have an active strategy that uses a reserve of wbtc if you think about if you guys are familiar with the frax model it's kind of like that but think about like an automated vault strategy that's that's um taking action to optimize those parameters i talked about

before so if we were able to drive quite a bit of the dig supply circulating supply into that big vault for a lot of the other reasons composability apy and stuff like that and then have automated strategies selling at certain parameters and buying at certain parameters that inherently should drive the market because it represents the majority of the supply from that market to be closer to the peg and we feel that that is you know our attempt at trying to bring a synthetic bitcoin um to market that doesn't rely on any centralized custody chris uh this is a question from mark from the bankless community how would you chris argue that dig is the most trustless and best asset representation of bitcoin on ethereum maybe just

consolidate what you said to like what's what's it what's the elevator pitch for why this is the best trustless tokenized version of bitcoin on ethereum well i i wouldn't say that's the case today it's not you know it's not the best trustless representation of bitcoin because we haven't been able to knock it out of the park with stability the volatility in itself makes it difficult to claim anything close to that to be honest with you and that's really not our intention to be the best our intention is to give an alternative and another representation from a price perspective that allows you to take advantage of all the great things that can come with d5 and all the utility

that can come with d5 we're also proponents for the other types of bitcoin and we believe there's going to be so many so many varieties that fit different risk profiles so i wouldn't say um i wouldn't agree that is or i wouldn't say it's to trust the most trustless and best representation but that's our take chris i'd like to get into the details of the badger token and so you earlier you illustrated how the the badger token uh is a tool to issue rewards and you alluded to it being unsustainable in its current form because it's being issued right um so what is like the long-term uh sustainability plan with the badger token and also perhaps just comment on on the role that the bachelor token plays with both governance and value capture

yeah at the core of it david it's um you know it is it is a governance token any and everything associated with the badger ecosystem all products all parameters all fees treasury everything's decided we've had i think 43 different improvement proposals that have been voted on um to put in perspective our last vote had uh 1299 unique wallets participate in that vote and that um accounted for almost 20 million dollars worth of badger that was used to to vote um for that specific specific proposal but that is the core of badger it's like you know by having badger you have a real voice and shared ownership in everything that's being

built and it's not again this is the evolution it's it's not just hey i'm governing like this cool fun stuff and it's like me and a few friends kind of ring around the rosie you know our vaults alone create almost five million dollars in profit right we have 600 million dollars in the treasury like these are real real dollar amounts these are real um this is a real profit generating business company and the only way decisions are made and things change and that company is going to be successful is if the token holders put their votes voice forward have impact genuinely give a crap and give the type of insight necessary to push it

in the right direction and that's the true value call of value that is the utility of um of the badger token today we don't distribute any type of revenue or profits back to uh the token holders of course that's to the token holders to decide um but nonetheless that's uh that's what badger is all about and you know when you talk about unsustainability of reward distribution you know there's there's a couple of things to point out there from a pure product perspective that's what i'm speaking to from a token distribution standpoint and further putting the hands of your token into excuse me further putting the token into the hands of people that should have it

in their hands i don't know what better community to put it into than your product users like you're using a product that product you then have say over everything about it as the product user like it's as if like i used any product in my normal life and i had the ability to say you know what [ __ ] these fees are just pissing me off man i don't really want this anymore put a proposal forward make a change rally the community right we don't we don't necessarily have as much of a convoluted governance structure it's very straightforward you know there's a forum vote and needs to meet quorum of 50 50 um yay votes then it goes to snapshot and then you can vote on it there's no delegation there's

none of this type of stuff and then you know the delegated multi-sig signers that are controlled by the token holders then um you know execute whatever whatever the the token holders want to be you know want to be had and you know like i said we've done that 43 times already chris i think this is a good time to fit in a question from joe k from bank lewis uh i'll just read it out the badger project has really put community first built up this amazing war chest while doing it what advice do you have for current or future founders to follow their lead yeah it's you know i'm a big proponent for you know breaking the system i was just talking to um you know he suggested i say hello i was

just talking to john from opolis right before this call and you know we kind of shared in the same sentiment right like that venture-backed system is broken um how that system allows companies to go to market and accelerate is at the um at the it really it really i was looking for a specific word it's at the expense of the founders in many instances right i've been through those i've been through those circles before so what i would say is you know we have an opportunity and timing is very important obviously i think we all can relate what you know what it's like launching a project in the bear market

versus the bull market um but nonetheless you know leverage the network effect that can come from um tokenomics and the ability to have your product users be owners in said products like that's very important so if i were to tell someone you know what playbook they should potentially use i'm obviously going to be biased and suggest you know our playbook right build something make test the [ __ ] out of whatever you're building make sure what you're building you believe at least to have some type of product market fit and and have a level of uniqueness and innovation then think very very closely about what types of values

you want the community members to share and try and align that with a specific message like i've said this you know a few people have asked me a similar question and and you know when now in the market when someone says bitcoin at least in the deep if you're you know defy head you'll probably say like badger if stevert asks like hey what badgers about they'll answer with bitcoin like think about how simple that message is versus what we're used to you know the elevator pitches the the things that come with crypto projects i'm doing this for x and that and like all these crazy words and people like what the [ __ ] you've been talking about you know so it's like that message needs to align with the values that you want to share because

similar to bank list bankless is another great example you have a shared belief system right and that's what builds community and with community you have sustainability because that community is going to go through the trenches with you when we're in different types of situations right and they're going to be there when we're out of those situations and you know the market picks back up and all that type of stuff so i would say identifying that and then and then the final piece to it would be how can you use on-chain actions to verify and quantify those specific values so that you can attract those community members early and feel confident that if you have a product that solves a problem

that's aligned with a mission that you think based on these on-chain actions that these people will share that by you going to market you at least get off the ground and be able to hit it running and then with that if you are successful even mediocrely successful you'll have plenty of money to bootstrap the business you know find other streams of revenue hire people and now you're doing all this without a board to talk to without all the [ __ ] that comes with investors and you know traditional you know um you know company type stuff venture back company type stuff so that that would be my suggestion chris it's always very refreshing to hear when somebody can communicate the

association between like the cultural shared values of the community and what is ultimately then value capture in the token uh those two things if people that there are aren't very many people out there that can communicate those two links so that makes me really optimistic about uh what you guys are are doing at badger i want to turn to a question that i'm seeing out of the the bankless youtube is uh what other chains are is badger interested in deploying on to next so we we released an uh post i guess last week and it had an infographic on a variety of different chains and layer two solutions that we're looking at in the end of the day our priorities are gonna come around what i spoke to before like where's bitcoin being utilized

where are the users and then how easy is it for us to deploy there so like evm compatibility is top priority uh first and foremost and um and and you know the whole slew of them right like you know we're looking at optimism we're also looking at um solana where we're going to be launching on polygon you know within the next few weeks like you know the the list once again it's it's you know we're looking at we're looking at polka dot it's early we're looking at an avalanche it's really early you know we're looking at these different types of things but in terms of like what prioritized phantom of course right phantom is a really interesting play because it has a lot of the tools already deployed there like sushi and cream and curve and

a lot of these things that we need for testing purposes that's another thing that people don't talk about much is this you know when you're when you have a yield aggregation product like we do it's very very very difficult to build the type of test environment necessary to to get it ready get new strategies ready for launch do all these types of things because you have to plug into so many different lego pieces and to mimic those lego pieces exactly how they are at that state it's very difficult to do in a test environment so something like a phantom it could be a great place for us to plug into all the protocols you know the amm that all these different things that that we need for creating yield and optimizing yield strategies for users and doing an environment again

where you know it's cheap it's fast it's easy it's not a big technical lift for us to do um so that's that's how we're looking at um our cross train initiatives and you know i envision i envision a time not the near future or student also near future where user comes with bitcoin to badger and you know it looks at you know what type of yield they want or what type of return they want they click a button a minute later they're earning that yield and what's happening behind the scenes is we're taking that bitcoin we're wrapping it we're bridging it we're bringing it to different places we're optimizing it across chain we're doing all these types of things but for the user you know it's one click and now they're um you know they're earning on their

bitcoin chris here's another question coming in from bankless community member mark uh what defy app has been the biggest inspiration for badger that's easy that's yearn why urine tell us more yeah well a lot of the things that i mentioned already one you know we built our code base off of the urine v1 vault foundation um two you know how they went to market and the fact that they are an open community and collective you know is exactly you know the the type of blueprint that we were trying to follow and you know i've always been a fan and a community member and like you know the teams you know the core team behind it they're they're awesome and they're

committed to innovation um but for the most part you know it it's it's easy for it's easy for me to say that because you know we we've we've just like in my mind like i've always looked at yearn as kind of like that that leading example uh for us and you know even now um next week and i don't want to make any promises but hopefully next week we're going to be launching you know our urine integration um be one of the first partners to integrate urine vaults and have like a revenue share relationship with that integration with the wbtc vault which is really cool so it's it's starting to come full circle and there's different things you know that we have an opportunity to collaborate on but you know urine was

definitely that that inspiration chris this is a question just for me because i'm super curious about this um we're seeing dows now with just absolutely massive treasuries like crazy treasuries um what what's your treasury now i'm just curious i know it's all on chain i could look it up but it's it's it's i think it's it changes so much or i think it's like five or six hundred million something like that okay so how are you gonna spend it exactly that was gonna be my question so like um so and let me maybe direct this question to a theme that dave and i have been repeating on bank list which is that um in this new crypto economy there are infinite opportunities do you want a job you can get a job there's money to pay you um

what are you guys going to do with all of this treasury is the first question and then how can people give the badger protocol what it needs to earn some money from this treasury two-part question there so the first part you know we're obviously gonna hire the best people that we can um how we hire is a little different and that speaks to the second question which i'll add which i'll answer in a second um we're gonna be investing in you know r d and building new products obviously we're going to be leveraging the treasury for incentivization for some of those products to accelerate users build stickiness so that we can start getting them into our other products like if you just were to think about

this for a second we launched a vault we want that vault to have 100 million in it because immediately after we're going to say hey you can borrow against that bolt position and you know once those apys are down to like 15 or 20 percent there there's additional utility on top so like getting them in the door there and using badger and dig as incentives to get them there and you know and reward them appropriately you know it's like a customer acquisition cost to an extent um and you can kind of think about it like that um and you know what's interesting a lot of people are talking about we don't have much time so i'm gonna i'm gonna make it quick because of these massive treasuries and taos and because of how early defy is and because of how open this financial system is i believe protocols like us

and i'll just speak to badger um our ability to put our own treasury to work is gonna potentially be our largest revenue stream moving forward and that in itself is so unique to even think about on how you know as your assets as badger and dig are further integrated in places where you can borrow and lend against it and potentially you know lp it and and earn apy on it and then the same thing with our bitcoin and our eth and our usdc and all of our other assets you know that that's going to be a very very unique opportunity that has never existed before never mind crypto like a year ago like you know protocols

a year and a half ago we weren't talking about protocols making money right like and tokens like making money like that was just ridiculous now it's a reality and now with that capital there's a lot that you can do with it to optimize you know people would go nuts tradition like these these dowels are also going to have like they kind of want to use traditional banking terms but like asset management and funds like that sit you know underneath that they're putting that treasury to work to generate that type of revenue it's it's pretty wild and and when you have a large community like us with like 15 000 people that can give input and say yeah here's a proposal this is what we should do hey i was doing this this isn't this and then these groups come together we're actually talking to a few folks

that are very defy uh native um investors and and users that are going to kind of build this like subcommittee within badger that are responsible for a percentage of the treasury upon you know community vote and they're going to be putting that to work to optimize a return on it right um but nonetheless the second part which is important really important to us is um how can people get involved so um like i said we're open completely open you can do as little you can do as much as you want you can do anything you want across all spectrums technical and non-technical everyone today that works at badger outside of a few people literally came from the community they decided to put a little more thought

into their forum post they decided to put a little more thought into their discord post and what happened there was after a few times i'm like [ __ ] let me ping this person hey dude like what are you working you want to get involved in something we need some help on like figuring out the treasury we need some help on this we need some help on hey did you want to help on this cool project and what's cool what's awesome is like you're not just like working on some random [ __ ] in like a in like a sandbox you're working on potentially production ready technology that's going to have millions of dollars touch it now there's so much other people and involvement and security practices around that but to be at the forefront and go from like someone that's not as involved and maybe

a participant to like a builder that's like that's huge for a lot of people it's huge for me it's huge for so many people um so for you know what the the immediate thing is like join the discord right you can find that on our telegram on our twitter um twitter uh profile and or reach out to me and and anything we need help across the board anything from like a couple hours a week to you know however much you want to do um more than happy to chat get involved we have a grant program um with that grant program we paid out five hundred thousand dollars in grants last month alone and these are people that don't want that aren't ready or we're not ready to have them commit full time to the project and they're just working on

different initiatives based on their skill set based on where they want to learn and based on their time effort we either get a retroactive grant for the work they did or we'll put them on kind of an ongoing grant and then at any point in that time either they suggest they want to be more full-time or we try and pull them into the full-time because they're a rock star and that's and that's how we work really truly pioneering the the future of the self-sovereign independent worker that's pretty cool chris to wrap up here i just kind of want to ask you about the the five-minute road map for for uh for badger like what's coming in the pipeline that users can expect we got an exciting few weeks ahead of us actually we've been building for the last couple months getting ready for this big push um either today tomorrow

we're going to be doing the second round of our nft drop with meme which i would argue is the most gamified nft drop anyone's ever attempted essentially you can use the interest bearing version of digg and you can stake that on meme uncapped so it's the first uncapped um meme initiative and earn points and then mint nfts but then you have these nfts what do you do with them we have a game that we built and we're releasing called the badger arcade and there's a 400 000 honey pot and we call it diamond hands because the you could redeem a percentage of the honey pot by giving your nfts in

the longer you hold the larger percentage of the honeypot you get okay it may never end for a few reasons one because there's obviously gonna be a secondary market for those nfts two we're going to be enabling those nfts to earn an apy boost inside of our app so giving it real utility inside of the ecosystem um so we're launching we're going to be going to turn in that on either today or tomorrow and then subsequent to that we're going to be launching on additional chains and we're going to be really focused on the utility side of the business so we're going to be launching two initiatives one called clause the other one called interest bearing bitcoin essentially with both of those you'll be

able to use your existing interest bearing vault positions on badger and either borrow a stable coin against it that's with claws or mint interest bearing bitcoin which is backed by an index of all of our curve vaults that of course you guys saw have all the different tokenized bitcoin in there which in itself mitigates some of the risk associated with each uh bitcoin and um now you you know our whole thing is like why would you own normal rap bitcoin if you can own you know hold you know interest bring rap bitcoin and all the fun things that are going to be able to to go on with that so um those are the initiatives that we're pushing forward in the in the near future and then there's a whole slope of other things but it's all kind of around the same thing we're launching our bitcoin

bridge actually um in between that where you can take native bitcoin and go right into vaults launching zaps with zapper um so you can go from any asset into the vaults with one click so we have a lot of these things that we've been working hard on and we're excited to make it easy for people to use the app give more utility to bitcoin and then give more utility to already existing vault deposits chris that's awesome thanks for walking us through the vision this community ask me anything this is bitcoin on d5 it's super exciting to see the community built around this vision you guys are are building hard man so uh well done thanks for joining us on bankless awesome guys thanks for having me this

is a blast bankless nation risks and disclaimers of course bitcoin is risky so is d5 so is all of crypto you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot if you are looking for a product that connects your fiat bank account with d5 tokens and products you need to download the dharma mobile app dharma is a non-custodial smart contract wallet and comes with a bridge that connects you right into your bank account dharma is the fastest and most efficient wallet between your fiat and your bank account and any token on uniswap or even any vault in yearn with dharma you can get

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