Badger DAO: How It Works
The DAO market has accelerated more than ever in 2020, with companies forming DAOs to follow the trend of community-led governance of their products. It is what DeFi companies are doing to stay “hip,” and ride the decentralization narrative that the Ethereum community tends to salivate over. Governance tokens are becoming the new “utility token” from 2017, with limited functionality, and even less user retention. All in all, the current bearish market behaviour in September of 2020 is separating the true initiatives from the pump-and-dumps, which is a healthy thing for the industry. This allows for less noise to filter out when a legitimate project with genuine community-bolstering efforts emerges.
The reality is, DAO’s have VERY little community governance participation in their current form. This can be for quite few reasons including high gas fee’s on Ethereum for placing on chain votes, but the more glaring reason is that they just don’t have a sense of shared ownership. They can place a vote but if the person or group of people (multi-sig setups) don’t want to make the change then the approved vote doesn’t matter. This is a big problem.
The type of DAO that has seen the most activity amongst its members are venture DAOs. Why? They have skin in the game and are responsible for every part of the business including diligence, sourcing, approvals, investments etc. Metacartel Ventures is a perfect example of this and they are leading the charge amongst governance engagement. Product focused DAOs need to follow in these footsteps and ensure community members are involved in every stage of product development while sharing in the value that is created through these products.
The Badger DAO isn’t “DAO for DAO’s sake.” It’s focused on creating an environment for builders to collaborate vs compete with a shared mission, bring BTC to DeFi. There isn’t a legal company, it’s a community.
All products are ideated and launched by community members with the support of the Badger operations team and DAOs treasury. True shared ownership is at the forefront with any value created from these products being distributed among the DAO, Badger token holders and those involved in creating the product. We believe this will translate to a much more involved community governance.
Badger Governance, Defined
Badger DAO have set up an Aragon DAO, where financial and organization decisions can be decided via consensus and smart contracts. The parameters for proposal processing will require 10% of the total supply of Badger governance token participation, where 50% quorum of voting is required after 7 days to pass a vote. Most of the protocol and funding-related decisions will execute in this manner. The Badger token will have an effect on all products and protocols of the Badger DAO. As an example with our first product Digg, an elastic supply currency pegged to Bitcoin, Badger token holders will govern all marketing decisions, protocol parameters, the token supply and any future smart contract changes, and this will be the case for any subsequent projects built by the DAO. Off-chain voting (Snapshot, Discord, Telegram, etc.) will take place for more product and operations-related issues.
On Treasury Management
We are taking a big bet that the community we will develop will be capable of deciding where the funds in the DAO will be allocated. No pie chart will be necessary. Before launch we didn’t feel it was the operation teams discretion to determine how the remaining supply is utilized so we are giving that control to the community at launch. 35% of the token supply will be custodied by the Badger DAO itself. Funds could be released for several purposes, including operations, additional liquidity mining events, partnership incentives (ex: distributing Badger as part of a partner engagement), product adoption incentives, etc. These will only be passed after approved community votes. Another possibility could be grants that move the DeFi ecosystem forward, such as Gitcoin, and grants to Bitcoin Core developers. They’re the reason why Bitcoin is what it is today, after all.
- Community members propose new product ideas for feedback and collaboration on the Badger DAO Discord and/or forum.
- Once signals suggest community interest and ideas are further developed, there will be an off chain vote to determine if it should be pitched via livestream to the greater community.
- It will then be turned into a defined scope including budget requirements, resource needs etc.
- Upon approval, the Badger DAO operations team will engage to work closely with community members leading the product and collaborate with them to launch.
- Badger DAO treasury will support funding requirements and the product can leverage the DAOs assets such as Badger tokens to incentive new users post launch.
- Product creators, Badger token holders and the DAO will all share in the value created through the product like fee’s or revenue.
An important thing to note is that based on which community members propose these ideas, it won’t always be as clear cut of a process as outlined above. An example is if a DeFi project with its own capital and human resources wants to build a product with the Badger DAO. As part of their proposal they can detail their willingness to allocate these resources and together with the operations team and any other community members, the product can come to life.
What Makes a Badger Builder?
With all things and in all things, we are relatives.
Badger builders are the backbone of the entire DAO. They are community members that are committed to collaborating to bring new products to life. A Badger Builder could be a developer, a group of developers, a company, or simply a passionate community member who wants to support and spread awareness of the Badger DAO’s products and mission. There are no obligations to the level of participation required. It is a rolling governance body, the doors are open for anyone to come in and get their hands dirty. Products will be architected and ratified for development by the community, along with the people being funded to build them. The Badger DAO will be a diverse ecosystem of liquidity providers, coders, content creators, meme artists, and users participating in a slew of new financial instruments. The diversity of this collective will only work for everyone’s benefit. The Badger DAO members have a stake in the DAO’s success- meaning the products’s revenues will not leave our system. The profits should go to all of those who contributed to their growth.
Just as important as the builders of the Badger DAO are the promulgators; the advocates of the new products being developed by the Badger DAO. These individuals will be in charge of written and produced content, from art, to publications, to meme crafting and video. They will of course have the help of the Badger DAO treasury to sponsor such materials. The Badger DAO will also support rewards distribution campaigns, wherever strategically applicable, to foster adoption of these products and inspire user-retention. All possible utilities of funds are on the table for discussion. We define what we build and we design our methodologies. New entrants to our community should be welcomed with applicable ways to attain our governance token, and welcomed into the Badger DAO.
Our goal is to innovate how DAOs operate and in turn create a feeling of shared ownership within the community. With that, have a more engaged governance activity and build better products. As much as the operations of the DAO are important, the genesis of it is equally as important. It needs to show fairness, inclusion and transparency. With our attempt to have as fair of a launch as possible we hope the community can see what we believe in and what we can become together.
Badgers are fierce animals that are willing to protect themselves and their loved ones at all cost, even from larger animals. We want the Badger DAO to have that same level of unity, and a fierce desire to create.