The Hidden Power of bBadger: A Composable DeFi Asset
The Badger DAO is a community of blockchain enthusiasts committed to building products to advance the yield opportunities of Bitcoin in the DeFi space. But what exactly is the $BADGER token itself good for? In this article we’re going to define where exactly we’re at with Badger, and some of the exciting prospects of where Badger is headed in 2021.
Where We Are
The Badger DAO token currently has all of the utilities that you’d expect out of a governance token. You can hold it, trade it, vote on governance proposals with it, and farm yield with it (soon with the Badger Boost)! Originally, staking required a deposit into the vault, receiving bBadger in return, and then staking those bBadger tokens in the geyser to earn yield. However, BIP 24 was passed overwhelmingly last week, completely changing the landscape for Badger and its future.
Badger staking will become entirely composable.
It’s hard to overstate how important this is for the token, and how much potential utility this opens for $BADGER. It’s often said in DeFi that smart contracts are like “money legos” that savvy investors can combine to create their own money machines. This is the very definition of composability.
Making this BIP even juicier was the decision to distribute rewards in bBadger — meaning that rewards are auto compounding! it will also encourage an even higher lock-up percentage for Badger tokens — since no gas will be required to restake (but actually will be required to un-stake). Considering that before this BIP, Badger’s lock up rate was already at 90%, it’s no wonder we’ve seen the recent market influx, with close to 9,000 wallets holding Badger!
Where We’re Headed
The focus will now shift toward creating market utility for bBadger, using this newfound composability to expand Badger’s footprint in the DeFi space. Integrating bBadger as a collateral type for other DeFi applications and products will only improve its value as a utility token.
There are several governance proposals in the works for many of our partners in the DeFi space. Here are three important ones:
- The vote to approve wBTC/ETH SLP and bBadger as collateral assets on UMA Protocol
UMIP #35 can be viewed at: https://github.com/UMAprotocol/UMIPs/commit/16d4ee67ffe239bfe8a488233628ebaa91920de5
UMA is a protocol that supports the creation of synthetic assets powered by its community-run DVM oracle. This UMIP vote passed overwhelmingly, and is in the process of being implemented. It means that bBadger holders will be able to use their tokens to mint stablecoins (sCLAWS for Sushi LP tokens and bCLAWS for bBadger tokens) — and earn yield farming rewards with them! Yield on yield!
This also creates an additional income source for the Badger DAO as UMA’s Dev Liquidity Mining program rewards those who build on its protocol.
2. The vote to list bBadger as a collateral asset on C.R.E.A.M
Update: The vote to add Badger passed overwhelmingly, with near unanimous approval:
CREAM is a decentralized money-market and fork of the Compound platform, with many new features and additions. Listing bBadger here would allow users to borrow assets while posting bBadger as collateral, and effectively opens the door for people to long/short bBadger with leverage.
While the vote to list bBadger was a step in the right direction, an additional vote to increase its “collateral factor” (and allow bBadger to be used as collateral for borrowing) is still required. This was set into motion with the following forum post.
3. The vote to collaborate with SUSHI on the CLAWS initiative
The forum post can be viewed here. With good approval numbers, it should be put to vote soon.
The proposal is to formalize a collaboration between SUSHI and BADGER to use SLP tokens as collateral for stablecoins, and to give their users the option of earning additional interest when doing so. The proposal would also create liquidity pools for CLAWS on the Sushi platform, and create additional Sett Vaults for these SLP tokens. Yield on yield on yield!
The future is bright with bBadger, and the income opportunities are several layers deep. These collaborations are expected to easily bring $100M in additional liquidity to our partners in the DeFi space, and to create an immense amount of new utility — and it’s only the beginning. Several additional features are in the works that aren’t mentioned in this article. More details coming soon!