DeFi Narrative of Badger DAO 2.0: Launch of censorship-resistant eBTC, BADGER’s weekly increase exceeds 60% BTC Ecology

7 months ago
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The new Bitcoin narrative of the elderly DAO, can the market pay for it?

Original - Odaily

Edit - 0xAyA

DeFi Narrative of Badger DAO 2.0: Launch of censorship-resistant eBTC, BADGER’s weekly increase exceeds 60% BTC Ecology

The popularity of Bitcoin Inscription has also attracted market attention to currencies related to the Bitcoin ecosystem, and Badger DAO (BADGER) is one of them.

Bitget market data shows that the price of BADGER rose from 3.5 USDT to 5.7 USDT in the past week, with a maximum increase of 62%. It is temporarily reported at 4.69 USDT, with a 7D increase of 34.7%.

In addition to the overall popularity of the Bitcoin ecological track, the reason for the increase is also related to Badger DAOs recent launch of the 2.0 plan - the launch of eBTC, a censorship-resistant synthetic Bitcoin.

This project, which was once committed to bringing Bitcoin into the Ethereum ecosystem and building DeFi products, was once on the verge of collapse due to hacker attacks. Now it is starting again. Can the new narrative succeed in getting a piece of the pie in the Bitcoin ecosystem?

History of BadgerDAO

The importance of DeFi in the Ethereum ecosystem is self-evident, and Bitcoin also frequently appears in major protocols because it serves as collateral. But the problem is that most public chains support BTC-related infrastructure, products, and protocols that are very immature.

Typically, Bitcoin is custodianized through a centralized approach and minted equally on Ethereum, with only a few large liquidity pools available for trading synthetic BTC. As the smart contract infrastructure matures and the DeFi track becomes more and more perfect, it is particularly important to further explore the potential of BTC in DeFi and optimize BTCs infrastructure.

Thus, Badger DAO was born, with the ultimate mission of accelerating Bitcoin’s use as collateral for other blockchains, and thereby attracting like-minded people to work together towards this goal. Afterwards, BadgerDAO issued a massive amount of airdrops during DeFi Summer and quickly gained a lot of attention and support. But the good times did not last long, and the operation of the DAO gradually fell into chaos, and it suffered a hacker attack at the end of 2021, ultimately losing more than $120 million.

Since then, the team has made a series of adjustments to BadgerDAO, including discontinuing all products/protocols, establishing a financial management framework, improving operational frameworks, establishing legal infrastructure and regulatory pathways, and reducing DAO expenditures, etc., and released a purple paper in July this year , launched a censorship-resistant synthetic Bitcoin-eBTC, which is also the core of this 2.0 update.

What is eBTC?

The eBTC protocol allows anyone to use Lido’s stETH as collateral, with users depositing stETH to lend out eBTC without paying initiation fees or interest charges.

Instead, the protocol generates revenue by taking a percentage of accrued staking revenue from the total system collateral, called the “protocol revenue share.” Initially, the protocol revenue share will be set at 50% of accumulated revenue, and this ratio can be adjusted through a minimal governance system.

Protocol staking revenue shares are processed in every operation involving collateralized debt positions and are always kept up to date within the system. Borrowers see their collateral grow in value through accumulated earnings, which are retained by the debt position. The overall health will naturally improve over time as the compounding return on collateral positively affects the collateralization ratio of each position.

DeFi Narrative of Badger DAO 2.0: Launch of censorship-resistant eBTC, BADGER’s weekly increase exceeds 60% BTC Ecology

To ensure the solvency of the system, eBTC adopts a liquidation mechanism, which means that if the collateralization ratio of a collateralized debt position falls below the minimum 110%, the debt position is eligible for liquidation. “Any market participant can repay outstanding debt in exchange for some remaining collateral and a gas fee subsidy as a reward,” the team said.

If the collateralization ratio of a debt position drops below 103% but remains unliquidated, the protocol considers the debt position to be undercollateralized and implements debt reallocation. Liquidators receive outstanding collateral at a fixed discount of 3% and any outstanding debt is reallocated among active collateralized debt positions.

DeFi Narrative of Badger DAO 2.0: Launch of censorship-resistant eBTC, BADGER’s weekly increase exceeds 60% BTC Ecology

In addition, eBTC ensures security through a combination of main oracles and controlled backup oracles provided by Chainlink. If the main oracle becomes unresponsive, the backup oracle will automatically start.


As the founder of Badger DAO@spadaboom 1 In other words, the changes that Badger 2.0 can achieve are similar to the way MakerDAO supports DAI through a minimized governance core and sub-DAO, thus driving demand for its underlying assets - the former can use eBTC as the core to further promote the growth of Bitcoin. Usage in the DeFi ecosystem.

As a bridge spanning the Bitcoin ecosystem and the Ethereum ecosystem, the eBTC update launched by Badger DAO comes at the right time. Can they take advantage of the popularity of the Bitcoin ecosystem to take the project to the next level? let us wait and see.

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