Badger DAO aims to accelerate Bitcoin’s use in decentralized finance (DeFi) by integrating Bitcoin-pegged assets like WBTC with Ethereum DeFi apps. The BADGER token incentivizes this vision by aligning users, developers, and other network participants.
As longtime Bitcoin believers, the Badger DAO team identified hurdles limiting Bitcoin DeFi adoption like siloed liquidity and experience gaps. BADGER fuels the ecosystem overcoming these hurdles to unlock Bitcoin’s full potential in DeFi.
Challenges for Bitcoin in DeFi
While Bitcoin is the most secure cryptocurrency, limitations have constrained its use in DeFi:
- Siloed liquidity — Bitcoin on Ethereum is fragmented across apps like WBTC, renBTC, and sBTC rather than aggregated. This reduces efficiency and capital utilization.
- High transaction fees — Transacting Bitcoin directly on-chain has become expensive, making DeFi unusable for small holders.
- Custodial risk — Various middlemen are required to custody Bitcoin and mint pegged assets.
- User experience — Bitcoin-centric apps lack cohesion and documentation, creating onboarding friction.
These issues have slowed Bitcoin DeFi adoption compared to Ether and stablecoins.
How BadgerDAO Unlocks Bitcoin DeFi
BadgerDAO provides infrastructure and incentives that uniquely overcome Bitcoin’s DeFi limitations:
- Aggregates liquidity — BADGER incentivizes adding collateral to shared pools across pegged Bitcoin assets.
- Reduces fees — Settles swaps and actions on Layer 2 networks like zkRollup to lower costs.
- Limits counterparty risk — Uses decentralized bridges instead of centralized custodians.
- Enhances UX — Actionable data dashboards, tutorials, documentation, and app integration.
Accomplishing this cohesively from the user perspective is key to onboarding Bitcoin-focused communities to DeFi.
BADGER Token Utility and Incentives
BADGER incentivizes positive network effects through the following utility:
- Protocol fees paid in BADGER incentivize liquidity provision across apps.
- BADGER is staked for governance of protocol parameters and treasury management.
- BADGER allows participation in exclusive rewards like airdrops and token claims.
- High BADGER balances unlock premium dashboard features for power users.
This expands Bitcoin use in DeFi while directing value accrual to engaged BADGER holders.
BadgerDAO Ecosystem Growth
BadgerDAO has gained significant traction since launching in late 2020:
- $1.5 billion+ total value secured and settled across products.
- $300 million+ in total value locked in Badger Setts (vaults).
- 350% increase in average gas-optimized daily users in 2021.
- Partnerships with leading DeFi apps like Yearn, Curve, and Sushi.
- 40,000+ monthly active users interacting across the protocol.
This demonstrates a healthy trajectory as Badger establishes itself as the go-to Bitcoin DeFi ecosystem.
BadgerDAO’s goal is to bridge Bitcoin and Ethereum communities to drive broad Web3 adoption. Future plans include:
- Expanding omni-chain availability across more Bitcoin and Ethereum networks.
- Opening additional fiat on-ramps to facilitate mainstream user flow.
- Introducing smart contract wallets and structured products for passive investors.
- Launching an NFT collection combining DeFi and collectibles.
- Continual improvements to Badger’s vaults, modeling, and infrastructure.
As DeFi expands, BadgerDAO is poised to grow as the centralized source of Bitcoin-based opportunities.
BadgerDAO provides the aggregation, infrastructure, and incentives necessary to propel Bitcoin’s expanding utility in decentralized finance. By simplifying and unifying the user experience across apps, Badger reduces friction for onboarding Bitcoin holders. BADGER aligns this community with permissionless and decentralized access to transact and earn yield on Bitcoin in DeFi.