C.o.R.E. Spotlight - AMA with BadgerDAO

tratium — 2 years ago

With C.o.R.E.3 beginning next week, the Tokemak team has lined up a series of AMAs ("Ask Me Anything") with various Reactor candidates.

The Spotlight Series will allow the Tokemak community to familiarize itself with the protocols that are interested in securing a Reactor of their own, and get a peek into why these DAOs are so interested in moving away from liquidity mining in favor of sustainable liquidity.

Next up is a double feature with Spadaboom from BadgerDAO and CitadelDAO, two projects aimed at bringing Bitcoin to the 21st century with yield-bearing vaults and treasury strategies focused around BTC.

BadgerDAO is building the infrastructure to bring Bitcoin to DeFi. We make it easy to bridge your Bitcoin into other blockchains and start earning yield right away.

For more information about BadgerDAO:

For more information about CitadelDAO:

C.o.R.E. Spotlight Schedule

Alternatively, the recording is available on SoundCloud.

"Citadel is aiming to be the largest community-owned Bitcoin position in the world, and with that, it will obviously have a shitload of Bitcoin. Tokemak is one of the nine partners – we call them "Knights" – that are going to be collaborating with Citadel on its launch, and will have a piece or have a share of the Citadel token supply right from the get-go." – Spadaboom

Key Takeaways

Spadaboom is an early contributor to BadgerDAO, and has been in crypto for nine years.
BadgerDAO is a protocol with the goal of bringing Bitcoin to DeFi via various BTC vault strategies.
Only 1% of all BTC has been wrapped or bridged to other networks, so there is enormous opportunity to allow this asset to be used as collateral or liquidity.
CitadelDAO will be Badger's first sub-DAO with the aims to become a "decentralized MicroStrategy" and the largest community-owned Bitcoin holding entity.

"With Citadel's launch, we're attempting to rewrite the playbook on how to launch a new DAO and new protocol, similar to how we rewrote the playbook on how to launch Badger." – Spadaboom

Most of BadgerDAO's efforts are around servicing users who are already interested in using BTC in DeFi, rather than attempting to lure Bitcoin maxis.
BadgerDAO believes they can offer a unique value proposition that opens the doors for Tokemak to participate in BTC-related yield strategies.
A BADGER Reactor could offer boosted yield if integrated with Badger Vault strategies, and BadgerDAO themselves could be a large BTC liquidity provider within the Reactor.
Tokemak Pilots are whitelisted for CitadelDAO's community sale.
CitadelDAO is looking for partners who want to influence a large Bitcoin treasury with the aim of earning yield on this BTC.
Ultimately, BadgerDAO aims to become a base layer protocol that offers permissionless yield and vault strategies for Bitcoin across DeFi.

"And what's really important there is aligning the interests of the protocols and DAOs that will most likely want to have influence around a large Bitcoin treasury...and also have built protocols that could allow that Bitcoin treasury to be the most used, and get the most utility, and obviously generate the most yield as quickly as possible." – Spadaboom

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Rough Transcript of AMA

[00:00:00.490] - CJ
All right, sweet. I think we can get started. Spadaboom, really appreciate you joining us today. Kicking off yet another conversation as part of our CoRE Spotlight series. Having conversations with protocols, participating in CoRE, learning more about them, figuring out what synergies we have together, ways to work together in the future. And, yeah, just giving us an opportunity to take a deeper dive on your protocol with the Tokemak community. So today we have Spadaboom from Badger here joining us. A pleasure to have you here with us.

[00:00:34.130] - Spadaboom
Thank you again. Glad to be here.

[00:00:36.830] - CJ
Love it. So can you give us some background on yourself and what Badger is?

[00:00:45.650] - Spadaboom
Sure. So I am an early contributor to BadgerDAO. I helped get the ball rolling with the DAO back in December of 2020. So we've been around a block a little bit and been in the crypto space quite a while – I guess now almost nine years, nine and a half years...in that range.

And Badger in particular is a DAO protocol focused on bringing Bitcoin to DeFi. That's been our core mission from the get go. We believe there's an enormous amount of utility that is really underserved and really not being leveraged or utilized whatsoever for Bitcoin as an asset outside of the Bitcoin network.

In terms of statistics, I think just a little bit over 1% of all Bitcoin has been either wrapped or tokenized or been bridged outside of the Bitcoin network. And of course, they're representing over 50% or close to 50% of the total market cap of the crypto industry. It's a pretty enormous opportunity, and even it is a collateral asset and obviously being used for...providing liquidity. And the opportunities are just endless because of how liquid of an asset and how large of an asset it actually is.

So Badger is a few different products, but our core products are our vaults, and they're really yield automation vaults.

[00:02:09.590] - Spadaboom
They primarily live on top of Curve and Convex. We are one of the first protocols to start working with Convex a ways back, and building our strategies around Convex, along with building products for the Convex asset.

One of our vaults and one of our top strategies is something we call bveCVX. So it's a CVX locker vault. There's a few Badgers in the audience, so give a shout out to the brains behind those vaults in particular...and those strategies would trigger them and pull there. But bdCVX allows anybody to deposit their CVX. And with that CVX, the vault strategy is to lock it and then really harvest the bribes that have been so liquid and have been so continuous over the last seven or eight months. And then we take those bribes, we sell them for CVX, lock it even further and sell some for Badger as well, and distribute that to users. And then, of course, it being a wrapper around lock CVX positions, you can provide liquidity for it. There's a Curve pool with about six or seven million in liquidity. So you can exit the position before the 16 weeks if you like. You could also borrow against the platform.

[00:03:33.620] - Spadaboom
So it's really about bringing value and utility to lock a CVX position while maintaining the competitiveness of the work for participating in the bribing ecosystem. But nonetheless, that's really what Badger is all about.

BADGER the token is a governance token that governs our ecosystem, and we've been very active in governance. I think we're almost at 100 Badger improvement proposals, 93 or 94 we've done in the last year and a half...and the community again, it's grown over the last year and a half, but it really is focused and narrowed on those same values and beliefs in a shared system or a shared vision around bringing Bitcoin to DeFi. So that's Badger.

And in the next month or so, we're going to be launching our first sub-DAO being CitadelDAO, which we can talk about in a bit for the most part. Like the simplest version of that is decentralized MicroStrategy. The goal is to be the largest Bitcoin community owned Bitcoin position in the world, actively using the DeFi Rails. So that's us.

[00:04:49.670] - CJ
Love it. Definitely want to dig into Citadel here later in the conversation. I think that'll be a really interesting topic to cover. Can you speak for a minute about...I'm not sure exactly when you launched or when you first ideated Badger, but what led you to either help with the formation of it, or what led you to join the DAO? Curious if you can talk about what led up to your contributing efforts?

[00:05:18.890] - Spadaboom
Yeah, it was just a passion for Bitcoin, and also a passion for Ethereum, and a belief in what I believe is going to be the future financial system. And in DeFi.

Also, I'm not a fan at all of centralized corporations and how they operate, and the lack of transparency...and my professional career...just experiencing the bad side of that. I just believe so much more in...that transparency and what has now grown into becoming...DAOs having community operated businesses. So that was the main driver.

And a lot of people share that same belief, right? There's a lot of people that are not die hard Bitcoin maxis, as people call it. They believe in the in-between, and then they also believe in being able to coordinate individuals around a common goal, that coordination.

And those people working together, it doesn't matter where they live, how old they are, what gender they are, what nationality they are. All that matters is the actions that you take and what you do. And it opens up an enormous amount of opportunities for people that really didn't have opportunities before to coordinate around these goals and really create and build value in the market.

[00:06:48.570] - Spadaboom
And again, that's another thing that I'm very passionate about, and very much so. I don't want to say it spits in the face of traditional corporate corporations and centralized entities, but...it kind of does, and I believe that needs to be dramatically disrupted.

[00:07:09.450] - 70k3m3ch
I couldn't agree more with all those points.

[00:07:15.270] - CJ
I'm curious if you have the data on this, but...when Badger started, I'm curious if you know how much wrapped Bitcoin was on Ethereum, and how much of your efforts have been spent trying to increase that ratio and get more OG Bitcoin into using DeFi – using it as a productive asset as part of smart contracts. Curious if any of your, like...I don't know if "marketing efforts" is the right word to describe it, but just...any of your links, your bridges between the two worlds. How much of your time have you spent trying to get them to come over and use Bitcoin on Ethereum?

[00:07:57.310] - Spadaboom
Yeah, it's been less about trying to get them to come over. I think it's been more around servicing those that already believe in...that are already looking to leverage Bitcoin as an asset in the DeFi ecosystem. And then naturally, because of the opportunity that those individuals and those wallets are getting with those Bitcoin assets after they've been tokenized or wrapped or whatever, that's drawn Bitcoin over. Because there's just so little to do with it on the native network.

But some statistics just off the top of my head: I remember in February of 2021, I think almost 50% of the wrapped Bitcoin was living in the Badger vault system. I think around that time there was maybe 1000, maybe 1500 Bitcoin that's been bridged over to Ethereum. Today, I think there's like 350,000, just to put that in perspective. Our bridge product, which enables people to bring Bitcoin over to Ethereum and directly deposit into our vaults, has processed close to a billion dollars in volume in the last eight or nine months, just to put that in perspective.

[00:09:19.210] - CJ
So there's definitely some great numbers. So touching back on what you mentioned earlier: you brought up Citadel, which is your first sub-DAO for Badger. You gave us a quick background on what Citadel wants to do. It wants to be a decentralized MicroStrategy. Can you talk about what led you to kick that sub-DAO off and...where Citadel is at right now, given that it's pretty recent?

[00:09:48.790] - Spadaboom
Yeah, most certainly. And before we go there, I'd love to talk about Tokemak and Badger in the point of collaboration, because that would then lead into the potential with Citadel, and what it is, and things along those lines. But really...today, I think there's a unique opportunity for both DAOs to collaborate, for the simple fact that Tokemak hasn't dipped their toes in Bitcoin, right? If you look at everything that you guys have done so far...and it's not to your own, it's not because you didn't want to, it's because of limitations that exist in the market. Right.

Just recently, you put a partner-first strategy around what you do with your assets and in the Curve and Convex ecosystem, and providing LP there. And that's a great example of how limited Bitcoin opportunities are on Curve and Convex. Right. How few gauges are for specific...how few gauges there are, how little yield there is in the Curve and Convex ecosystem for Bitcoin, which limits Tokemak's ability...I like saying market maker. Decentralized market maker. I know that there's a lot of other funky words that you guys use. But it makes it harder for you guys to really be that market maker if there's few markets to make, and there's a little bit of revenue to be made off that. Like, I think just yesterday or today, I saw Tokemak generated, what is it, three or four million in revenue in the last week?

[00:11:27.580] - Spadaboom
Something along those lines. And I would imagine a lot of that's coming from Curve and Convex farming strategy. So I think the first step forward, and why I think Badger should be included in this CoRE3 and be one of the five assets that's chosen, is because of the doors that it can open around Bitcoin.

So Badger for a few reasons, but Badger in particular has a gauge for WBTC Badger, which obviously could be used for providing liquidity by Tokemak. Badger has an enormous amount of CVX that it can leverage to help with different votes and gauges for the assets – regardless of if they're Bitcoin or not – that Tokemak would potentially be vying for in the future. And I also think it could be the start of jumping into the Bitcoin ecosystem. There isn't a BTC Reactor today, and if there was...a Badger is an asset that can give boosted rewards – arguably the highest rewards on any Bitcoin pools that exist – to come out of the Badger Vault system. I think it's up to like 30 or 40% if it's over-collateralized with...if it's boosted over 100% with Badger. So similar to how Curve gives different ranges for APY – the gauges. Badger's Boost system does something similar.

[00:13:05.700] - Spadaboom
So with you guys holding Badger, you then get boosted rewards on your Bitcoin and then you have a partner that can help drive more organic yield in the Curve and Convex ecosystems. And then that's where Citadel can potentially come in as well.

Citadel is aiming to be the largest community-owned Bitcoin position in the world, and with that, it will obviously have a shitload of Bitcoin. Tokemak is one of the nine partners, and – as we call them – Knights that are going to be collaborating with Citadel on its launch, and will have a piece or have a share of the Citadel token supply right from the get-go. Which, if locked for 21 weeks, gives governance rights around what the treasury actually does, which assets could be accepted in that treasury, and which protocols that treasury is deposited into.

So now, all of a sudden, if there was a Badger Reactor, you have the ability to get boosted yield on your Bitcoin, but then you also have a big Bitcoin LP that could support Tokemak, and it could support that BTC Reactor...at the same time, in itself will hold a lot of CVX, could potentially hold a lot of TOKE the future, and drive boosted rewards around this vibrant new Bitcoin ecosystem.

[00:14:28.200] - Spadaboom
So I think there is an enormous amount of opportunity in collaboration, and really starts with the Badger token getting a Reactor. Citadel is also going to have a lot of Badger that it could then deposit into the Reactor. Badger could work towards using tBADGER as one of the boost assets inside of the Badger Vault system. So if anyone deposits Badger into TOKE, they could then use that tBADGER and still get a boost on their Bitcoin inside of the Badger Vault system, as an example. So I think the opportunities are endless, and it really speaks to having a partner to drive, yield, influence and support a large ecosystem around Bitcoin.

[00:15:13.650] - 70k3m3ch
Yeah. This is extremely well put, because I think to most people, like, it's not quite apparent. First of all, I think that...Bitcoin in itself, right? I think there's often this misconception that there's not much to do with it. And I think I would personally like to see more of Bitcoin, like in DeFi, because I'm personally also very interested in Bitcoin. And then, on the other hand – it's very well put – like this...symbiosis between Badger and Citadel. That these are...not really just two pieces apart, but those kind of work together...and then together with Tokemak, you could, like, leverage both arms of it. Fully agreed there.

[00:15:59.310] - CJ
Yeah. You touched on a lot. You clearly understand what we're up to and what we're trying to accomplish. And as a decentralized market maker, we're asset-neutral. We just want to make markets wherever there's demand for a given token.

So, yeah, more exposure to Bitcoin is something that we're all in favor of...supporting that demand, creating markets. Yeah. Standing up a Reactor for wrapped Bitcoin, I think, is certainly something that is of interest to us. And then using that as a Pair Asset in order to trade on various DEXs is super useful.

So I believe for Citadel, we whitelisted Tokemak Pilots who I think voted in CoRE2. If I recall correctly, if someone did participate in governance on Tokemak previously...would they need to take action by a certain time in order to participate in Citadel? What does that look like?

[00:16:58.810] - Spadaboom
Yeah, it's a great thing to highlight, because this community in particular is one of the few that has the opportunity to participate early.

So with Citadel's launch, we're attempting to rewrite the playbook on how to launch a new DAO and new protocol, similar to how we rewrote the playbook on how to launch Badger. But there's going to be no other sales, private public or anything outside of one -- we call it community sale -- where only whitelisted individuals can buy Citadel. They can buy them with a variety of assets: Bitcoin, CVX, Badger Stables...which will then get rebalanced accordingly to ensure, obviously, a heavily Bitcoin denominated treasury...along with the ability to get yield on that Bitcoin.

But only users that have actually used the dapps or participated in the ecosystems of our nine partners, you guys included, are whitelisted to even participate in that community sale. Anybody that wants to check that out, they can go check it out at CitadelDAO.io, and they can put their address in and see if they qualify.

[00:18:30.370] - Spadaboom
The launch is going to be happening over the next month or so. And as I mentioned earlier, the actual DAOs or protocols -- Tokemak included -- are going to be getting a percentage of the total supply that's allocated for partners, and there's also going to be an opportunity for those partners to drive users to vote for their Knight, as we call it, in that initial community sale. So when they're participating, they would have qualified. For example, when they're participating, they have to pick one of the nine partners. It's kind of like choosing their tribe. And those with the most votes (just to simplify it; it's a little more detailed than that) but...those with the most votes will get a larger piece of the pie of that 5% allocated for those partners.

And what's really important there is aligning the interests of the protocols and DAOs that will most likely want to have influence around a large Bitcoin treasury, and also have built protocols that could allow that Bitcoin treasury to be the most used, and get the most utility, and obviously generate the most yield as quickly as possible.

[00:19:54.620] - Spadaboom
Right? Like, we've talked about this potential symbiotic relationship between Badger, Tokemak, and Citadel. How much more likely that would happen, and how much value there would be for all parties, if there were shared ownership across the board. And that's what we're really attempting to do, right from day zero.

And to ensure instead of VCs and a bunch of random large whales that don't give a shit about anything but "number go up" holding the token. Instead, it's the protocols that potentially want influence around a large LP, and...protocols that potentially want a large LP to really maximize and optimize how they participate in their system. Right?

Like if Tokemak looks to introduce different locking mechanics in the future to give a boost on different things that they're doing, or whatever it may be. Who better to do that then? Or who better to kick start that than a very public large LP that Tokemak has influenced around what it does? As an example, while everyone's making revenue, everyone's driving value across the table, we talk about parasitic and mercenary capital in DeFi, and how a lot of the big, large capital allocators really just give a shit about making a quick buck.

[00:21:24.150] - Spadaboom
And we've seen that time and time and time again, especially in the last year. But I believe moving forward, it's really going to be about DAOs and treasuries and protocol-controlled value...that have genuine shared interests in what they're trying to get out of leveraging that protocol, and working with these different partners, and protocols that are going to be dictating how these systems work and operate. So this is an attempt to try and do that from the beginning.

[00:21:53.590] - CJ
I think it's a super thoughtful method of launching. So super glad that you included Tokemak, and we're going to be able to support that. So, yeah. Pilots, stay tuned in the next month for that whitelist opportunity. We'll keep you posted with updates when that happens. 70k3m3ch, any questions from your end thus far?

[00:22:17.900] - 70k3m3ch
No, I think Spadaboom answered everything so well that I basically don't have any deeper questions. Especially...Citadel – I think was very well explained. And it's kind of how it works together with Badger, and why it would be interesting or in the interest of Tokemak to get Badger on board for a Reactor.

[00:22:43.990] - Spadaboom
Something even goes a step further there. I didn't talk about it because it's a little deep, but...Badger is really attempting to move to become more of a base layer protocol where anybody can deploy their own vaults and yield strategies in a completely permissionless way – a self custodial way, with complete autonomy. That's what we're moving towards with the tech that we're building, rather than multisigs and different set strategies and different capital allocations happening at a vault level and strategy level.

And with that being said: Citadel is really going to be the first protocol to build on top of Badger. Any capital in its treasury is going to be automated with unique vault strategies are going to be built for Citadel. And those strategies could be across Curve/Convex, it could be across Tokemak, could be across Balancer, and a variety of other places. And I think there's a really unique opportunity, as well as both of our protocols.

And DAOs work closely, closer together...for Badger, for Tokemak to build on Badger...build treasury automation and how you handle your protocol control value. Because today, in your farming activities and what you do to maximize yield...and be that decentralized market maker, for the most part, is through more manual processes, through multisigs. Moving forward, if there could be custom-tailored strategies that do exactly what you would be doing, but do it at a smart contract level that you self-custody around – and that's immutable and tried and true and tested it and battle tested with billions of dollars – that's very powerful.

So I think that comes a little down the road, but that's the opportunity. And I think, again, it just starts with Badger having a Reactor, Badger showcasing, and the community showcasing the power of that alignment...and then moving into how there could be a joint collateralization around Citadel, and how that could potentially lead into Badger one of the Lego pieces underneath the... uh... the Tokemak... uh... I don't know, I was going to come up with a cool analogy, but: one of the Lego pieces in your arsenal.

[00:25:03.630] - 70k3m3ch
Yeah. And it's the vlCTDL holders that would vote on strategies. Right? On the allocation of the Citadel Treasury.

[00:25:12.430] - Spadaboom
The point that I'm making is we can...Badger the protocol can...create custom strategies regardless for other groups, for other protocols. Like for you guys to put your Curve LPs into, and instead of you taking the CRV and staking it for cvxCRV and taking the CVX and locking X percentage of it and taking those rewards and doing X with it, that's all automated. Similar to what it's going to be doing for Citadel type things.

[00:25:45.850] - 70k3m3ch
Okay, awesome. Because there's also, like...the idea I was just thinking on the Citadel model (because I have a little flow chart in front of me)...there could be then some...If, for example, Tokemak holds a ton of...vlCTDL, that there could be some pass-through votes to...liquidity directors to vote on these strategies.

[00:26:10.150] - Spadaboom
Yeah, of course. Certainly the Citadel holders dictate the amount and which protocols to deploy a percentage of that treasury into, and then that could trickle down into which specific Reactors, and things along those lines. And of course, there's going to be meta-governance there with TOKE and staked TOKE that could be really interesting as well.

[00:26:36.650] - 70k3m3ch
Love some meta-governance.

[00:26:40.190] - Spadaboom
Indeed.

[00:26:40.710] - CJ
Yeah. The possibilities are endless, so I hope we get there. It's just a matter of time, like you said. In terms of the most successful version of Badger Citadel: can you describe what that looks like, and also what it would take to get there for each protocol?

[00:27:05.390] - Spadaboom
I'd say for Badger, it has the largest protocols in the world building on top of its unique tech...and automated yield strategies to maximize and optimize what they do with their capital or protocols that are built on top...that are leveraging automated yield management or reward management as a way to actually provide a service that's different than what a Badger could do.

Like as an example: how Alchemix focuses on offering people self repaying loans, but under the hood it leverages Yearn's vaults for the purpose of generating that yield in an automated and secure way. Right. Like, that's an example of...it's not just Alchemix putting their money to work or the controlled value of the protocol, but instead actually building an app layer on top of that.

So when we think about that progression, and having the largest protocols in the world building on top of Badger in a way where we've pushed the tech forward and it is completely autonomous – it is completely self-custodial and allows anybody, anywhere to generate and create their own yield strategies with a couple of clicks of a button.

Now on the Citadel side, it's really about being, again, the largest Bitcoin -- it's not just about being the largest Bitcoin holder, but really having a massive influence across this new ecosystem of finance to drive that utility. And in the earliest days, drive that yield that doesn't exist. And we all know yield then equates to liquidity, and liquidity then creates additional utility, and things along those lines. So that would be the ideal success state for Citadel, where it is the largest holder of Bitcoin in the world.

[00:29:11.190] - CJ
That's great. Yeah. Like 70k3m3ch said, you did a great job covering a lot of topics really in depth. So you helped make my job really easy by answering some stuff before I had a chance to ask it. So really appreciate all the great insight and your thoughts here today.

[00:29:29.070] - Spadaboom
No problem. You are an idol, so I had to step up my game, right? A blue bearded king idol. I have to step it up.

[00:29:39.030] - CJ
If only I got it during the mint. I had to pick that one up on secondary. My four I minted weren't very special, unfortunately, but cool project. I like the idols helping secure Ethereum. So big fan of that one. Shout out to the Idols team. Cool! Spadaboom, if someone wants to keep track of Badger and Citadel, where should they go to learn more and stay in touch?

[00:30:05.910] - Spadaboom
You can go to Badger.com to get everything you need to know about Badger. I highly encourage anybody to join the Discord. Very active community there. You can find the Discord link on Twitter under @BadgerDAO.

CitadeldAO, you'll most likely find scrolling through the BadgerDAO Twitter feed, but nonetheless you can go to CitadelDAO.io there. Again, you should join the Discord. Very active community...

For the engineering eyes in the group that want to get a feel for our code...of course, it's all open source and available to review and dig into if you want to start participating. We have an early contributor program going on right now, for anybody across any discipline that wants to contribute to the DAO and get the ball rolling. There's going to be some rewards upon launch. They're going to be allocated a good chunk to those early contributors. So starting in the Discord, you can find it on the Twitter for both Badger and Citadel. They're separate Discords, by the way. And then of course: vote for Badger. Vote for Badger in CoRE3. I think it could open up an enormous amount of opportunity for both protocols.

[00:31:15.700] - Spadaboom
I think it'd be a great opportunity for us to start working together.

[00:31:20.790] - CJ
Well said. Big fan of what you guys are doing. Super eager for the Citadel, so looking forward to that one. Spadaboom, really appreciate your time today. I know we'll be in touch soon. Looking forward to it.

[00:31:32.010] - Spadaboom
Awesome. Thanks again. I really appreciate it.

[00:31:34.220] - 70k3m3ch
Talk to you soon man.

[00:31:35.730] - Spadaboom
See you later. Bye.