Bitcoin-backed Badger DAO is set to expand its operations as it recently diversified $21 million treasure through its strategic partners. This was according to what the company announced a few days ago.
According to DAO, the strategic partners will improve its governance and bring long-term Bitcoin liquidity to the operations.
Before this move, Badger had passed what they called a “Badger Improvement Proposal (BIP) 37 (Treasury Diversification through Strategic Partnership)” last month. So this diversification is not news to the Badger community.
A Brief on Bitcoin-Backed Badger DAO
Badger DAO came into the industry in 2020. The project brings Bitcoin to the DeFi ecosystem by creating use cases for “wrapped BTC” assets. Presently, the value of cryptocurrencies locked on the protocol is more than $2 billion.
Since its inception, the protocol has generated a total of $36 million annualized profit. It has also amassed a whopping sum of $600 million in its treasury through Badger and DIGG. Badger is its governance token, while DIGG is crypto pegged to BTC.
Even with all these accomplishments in just a few months after launch, the protocol pushes for more. The protocol aims at involving its strategic partners, Polychain Capital, Blockchain Capital, “oxBi,” and ParaFi Capital in its governance. By encouraging such involvement, the protocol will grow, offer long-term bitcoin liquidity, and build synergy will more institutional funds.
Investor’s Reaction to Diversification
According to ParaFi Capital partner Santiago Santos, up to 1% of Bitcoin in circulation went into the Ethereum DeFi ecosystem. Therefore, Badger DAO aims at positioning itself to capture more market share of these Bitcoin holders who use DeFi Apps.
A Polychain Technical Researcher, Jacob Philips, also commented that Badger would soon become a “Schelling Point” for both the existing Bitcoin liquidity and the new ones.
According to Philips, Badger achieves this by aggregating Bitcoin DeFi protocols, building new BTC-focused products, and aligning an already passionate community of Bitcoin in DeFi.
Meanwhile, Badger stated that this diversification is the commencement of its “Badger Backstop” fund. According to the protocol, this fund will help them secure user assets and expand the protocol further, not minding the market conditions.
Badger also mentioned a plan to create an insurance fund with a part of its capital. The reason behind the insurance fund is to protect its users and, with time, increase the total value locked in the protocol. Also, the protocol mentions that this is stage one of its upcoming diversifications.