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Badger DAO pronounces $21 million treasury diversification through VC companions

03/03/2021

Badger DAO has welcomed some deep-pocketed traders into the group with an asset sale aimed toward de-risking the treasury portfolio.

Some main enterprise capital names are ‘sett’ to affix the Badger DAO group. 

Bitcoin on Ethereum-focused decentralized finance (DeFi) protocol Badger DAO introduced immediately a $21 million sale of DAO treasury belongings to 4 main traders: Polychain Capital, Parafi Capital, Blockchain Capital, and famous whale pockets 0xB1.

The sale was made as a part of a wider “Treasury Diversification via Strategic Partnerships” plan first outlined in Badger Enchancment Proposal (BIP) 37. The Badger treasury, at present value over $600 million USD, is primarily allotted in $BADGER, the DAO’s native governance token, and $DIGG, an artificial rebasing Bitcoin.

In keeping with Badger DAO founder Chris Spadafora, the sale featured an trade of staked bBADGER tokens for USDC stablecoins which will probably be used to create a “Badger Backstop” insurance coverage pool. By diversifying a share of the treasury to belongings like stablecoins, the DAO additionally hopes to organize for market downturns with a “barbell” portfolio allocation.

Spadafora stated in a written interview with Cointelegraph that it’ll now be as much as the group to determine whether or not to speculate the newly-raised USDC tokens right into a yield-bearing protocol or to easily retailer them within the treasury. The phrases of the sale weren’t disclosed, although the announcement provides that the brand new companions will probably be “getting concerned in governance to assist the protocol develop, offering long run liquidity and constructing extra bridges with institutional ecosystem companions.”

The sale is among the many earliest examples of enterprise capital entities investing in a DeFi by the use of a DAO — and it’s probably the biggest up to now. In 2018 Adreessen Horowitz invested $15 million in MakerDAO, and earlier within the month Synthetix raised $12 million from a bunch of VCs as nicely.

Such relationships have been the goal of ire amongst some DAO group members on condition that VCs typically obtain preferential funding phrases. DeFi founders have largely been in unison that VC entities deliver distinctive worth to initiatives, nevertheless — a view that Spadafora has additionally adopted.

“DAOs ought to embrace massive funding gamers primarily based on their willingness to take part in governance and open their community to push the protocol ahead. Doing it proper for VC’s is about turning into a group member vs an investor.”