TLDR: Badger Finance starts its own incubator.
BadgerDAO, as the place to be for Bitcoin across DeFi, needs a long term system for expanding our family of products and partners. We can use this to help potential long term partners get to market, diversify the treasury into potential high-upside assets, and gain access to a large pool of innovative builders.🦡
Remember: a “sett” is the term for a den that badgers build & reside in. In the wild, badgers build annexes that are connected to the main sett via well worn paths along the surface. This allows for independence & collaboration between individual badgers and groups of badgers. With this program we are looking to do the same. 🦡
The DAO builds a generalized structure for incubating new products and protocols called the Badger Annexe. Focused on furthering Badger products as well as the greater DeFi ecosystem, the Badger Annexe will support and invest in teams Building, Launching, and Growing DeFi products that accelerate the mission of using Bitcoin in DeFi.
Generally, the activities of the Annexe will be to review, develop, integrate, and expand the products of the incubated organization. Badger DAO can take an ownership stake in the organization and choose to commit assets to things like audits and other pre-launch necessities. In some cases, BADGER, DIGG and other BadgerDAO assets may be also used as an incentive to drive adoption. All decisions involving the use of treasury assets will be subject to community approval.
The gather stage is where potential Badger Annexe projects and teams work with the community to discern whether what they’re trying to build is a fit for Badger. This falls in under our ecosystem grant mechanics.
Foraging teams or products are actively putting together the pieces to integrate their product into the Badger ecosystem. During this stage support can be given to the project through commitment of assets from the treasury or efforts by the badgerDAO core team. By going through badger some economies of scale can be reached by using battle tested building DeFi blocks, group audits, domain expertise, and more.
Tunneling teams are connecting their products into Badger products. This stage might use BADGER or DIGG incentives to help bootstrap users for the app or protocol. If applicable BadgerDAO may also integrate the app or protocol directly into the badger app.
Prospering Badgers are always looking for ways to give more. This stage is where projects scale and begin to look for further value adds in their roadmap. Any BADGER incentives are done and the product can operate as a valuable part of BadgerDAO and the ecosystem as a whole. BadgerDAO and the newly launched projects continue to be economically aligned partners as they execute on their long term roadmaps.
Token Economics of Incubator Projects
When incubating a project or product, careful consideration should be given to how any new tokens are introduced to the market. Tokens should only be introduced if they create a specific value capture and provide utility to the product. Focus should be given to make each/any assets launched value capturing.
Thought should also be given to how the new token will deliver value to Badger holders. Tokens of new orgs/products should fall under and pass value to Badger where they are used in the ecosystem.
Potential Deal Parameters
Each potential project will be evaluated individually based on some parameters
- Stage of development
- Potential market
- Alignment with badger mission
- Project economics (potential token and/or revenue structure)
- Effort to get to launch
If it seems like a good fit the core team will negotiate terms with the project that could include, but is not limited to, any of the below:
- Payment (in BADGER/DIGG) to project team/investors (with locks/vesting)
- BADGER/DIGG to project treasury (with locks/vesting)
- Commitment of BADGER/DIGG for incentivizing product launch
- % allocation of any project tokens to BadgerDAO treasury
- % allocation of any project tokens to Badger community (distribution mechanism options tbd)
- % allocation of any project tokens for optional future treasury tokenswaps between BadgerDAO<>project
- Potentially project team members contribute to other badger inititatives and join in part of full time capacities
Potential Deal Sources
There will be more information posted over the coming weeks about how a project can apply to join the Badger Annexe. For now it will come through the community and the network of the badger core contributors. We also have a deep partnership with gitcoin and will be aligning with their kernel program where it makes sense to source potential deals.
While we would love to support every project in DeFi we do not have the monetary or labor resources to do so. For now acceptance will be very dependent on project stage and level of effort needed from the badger core team.
- Review by Annexe Committee (eventually with with community representation)
- Technical Review (Dev+Security teams)
- Negotiation (Core/Seeders)
- BIP + snapshot for community approval with deal terms
- Initiation (if vote passes)
- Build (Inclusive of technical and economic design/review/build out)
- Launch (After security review and with help of badger resources)
- Collaboration (Continue to operate and support as a key partner)
We are incredibly excited to kick this program off and can’t wait to see what new protocols, apps, use cases, and builders we are able to find and support. This is a natural progression of building in DeFi where everything becomes a potential building block for something else. We think the more building blocks the better. There are a few projects that have been working inside the badger ecosystem already and will be evaluated through this lens and put forth for community review soon. Build on Badgers!