In Q3 BadgerDAO focused on building the eBTC protocol, pushing through the final stages of development. Further audits of eBTC were completed to ensure the safety and robustness of the product at launch. While the Badger Treasury continued to bring positive returns in Q3, these returns have diminished due to yields moving lower in DeFi across the board.

Some highlights of the most important treasury events:

• ~$2M decrease in the notional value of treasury holdings due to price depreciation of treasury assets

• A continuation of decreased revenue due to falling yields of TCL

• Stablecoin inflows have diminished and no longer extend BadgerDAO runway due to increased security and development spending towards eBTC launch, however overall operational costs decreased quarter over quarter by $435k

• Badger established a relationship with a market making counter party

More details in the report below.

Assets

The treasury’s biggest positions saw mixed price movements;

• BADGER: $2.235 -> $2.215 (-1%)

• BTC: $30505-> $26947 (-11.6%)

• ETH: $1932 -> $1662(-14.2%)

The BADGER token is performing on par with a conglomerate of DeFi tokens within similar scope.

Live dashboard of the treasury’s complete portfolio

Counter Parties

200,000 Badger tokens were lent to a market making counter party to increase liquidity depth on centralized exchanges.

Investments

• Opolis (BIP#49): the 17.9M staked WORK’s fair value is now ~$133k. Still another 8.4M WORK vesting over the next 27 months (~$62k)

• zeroDAO (BIP#50, BIP#96): 30% cut ($120k) of their raise still to be paid to us post-TGE (token generating event), plus 12% of $zeroDAO supply.

Profit & Loss

Full profit and loss statement inclusive of BADGER and DIGG

• Revenue has decreased by 50% due to yields on TCL positions falling

• The DAO now has no active vaults reducing performance fees to $0

• Overall costs reduced due to a decrease in gas cost, consulting and software - additional consulting costs were required in Q3 for finalizing the development of eBTC

• These effects combined resulted in non-native EBITDA being negative for Q3 (-$742k)

Restitution

The restitution program continued as agreed upon, in the form of deposits into remBADGER (73k BADGER) and emissions to remBADGER holders (95k BADGER).

The remBADGER program can be tracked live on The Official Dune Dashboard.

Sources

Most of the data presented here is sourced from various interactive reports created with Google Looker Studio, all updated at least once a day:

• BadgerDAO Portfolio

• BadgerDAO P&L 2023

• List of treasury’s on-chain addresses and corresponding links

Be relentless. Be Badgers

In Q2 Badger continued to focus on building the eBTC protocol and preparing to go to market. The eBTC protocol underwent intense review and auditing to assure a quality product. The Badger Treasury continued to bring positive returns in Q2 as crypto markets experienced volatility related to regulatory uncertainty.

Some highlights of the most important treasury events:

• $3.1M decrease in the notional value of treasury holdings due to price depreciation of treasury assets, more than half coming from decrease in Native asset value

• Decreased revenue due to falling yields of TCL

• Stablecoin inflow continues to extend BadgerDAO runway

• All remaining vaults were retired ahead of eBTC launch

More details in the report below.

Assets

• The treasury’s biggest positions saw mixed price movements;

  • BADGER: $2.86 -> $2.18 (-23%)

  • BTC: $28533-> $30381 (+8.2%)

  • ETH: $1825 -> $1927(+5.5%)

• For comparison: the S&P Cryptocurrency MegaCap Index gained +7.3% in Q2

• Live dashboard of the treasury’s complete portfolio: https://lookerstudio.google.com/u/2/reporting/709ff9bc-23d3-46ed-b0aa-d7af77fe6ed9

Investments

• Opolis (BIP#49): the 17.9M staked WORK’s notional value is now ~$175k. Still another 8.4M WORK vesting over the next 27 months (~$82k)

• zeroDAO (BIP#50, BIP#96): 30% cut ($120k) of their raise still to be paid to us post-TGE (token generating event), plus 12% of $zeroDAO supply

Profit & Loss

Non-native (i.e. excluding BADGER and DIGG) P&L:

For a full profit and loss statement inclusive of BADGER and DIGG, please refer to this particular report: https://lookerstudio.google.com/u/2/reporting/24f03640-4369-4687-a92f-979fe946bb8b/page/p_z0k2snawyc

• Revenue has decreased by 36%, due to yields on TCL positions falling

• A decrease was observed in vault based revenue (performance fee, withdrawal fee, minting/burning) due to further deprecation of products

• Overall costs increased due to an increase in gas cost, consulting and software. Additional consulting costs are mostly temporary development costs for the eBTC frontend.

• These effects combined resulted in non-native EBITDA being negative for Q2 (-$158k)

Cashflow

• During Q2 the Badger Treasury Council voted to formalize an annual operating budget for the Association Council (TCD#30)

Restitution

The restitution program continued as agreed upon, in the form of deposits into remBADGER (73k BADGER) and emissions to remBADGER holders (95k BADGER).

The remBADGER program can be tracked live on this dashboard: https://dune.com/gosuto/remBADGER

Sources

• Most of the data presented here is sourced from various interactive reports created with Google Looker Studio, all updated at least once a day:

  • BadgerDAO Portfolio: https://datastudio.google.com/u/0/reporting/709ff9bc-23d3-46ed-b0aa-d7af77fe6ed9/

  • BadgerDAO P&L 2023: https://lookerstudio.google.com/u/2/reporting/24f03640-4369-4687-a92f-979fe946bb8b/

• List of treasury’s on-chain addresses and corresponding links: https://github.com/Badger-Finance/badger-multisig#multisig-addresses

Be relentless. Be Badgers

Q1 was a time for the Badgers to buidl. The framework for a new DeFi primitive called eBTC was introduced to the community (forum: introduction, update#1) while a boon to the Badger Treasury in Q1 stemmed from a strong market recovery for crypto in general.

Some highlights of the most important treasury events:

• $7.7M increase in the notional value of treasury holdings due to price appreciation of treasury assets

• Increased revenue despite low engagement from users

• Strong stablecoin inflow continues to extend BadgerDAO runway

• Emissions were set to zero, following the conclusion that they were not profitable on current vaults (TCD#25)

• BadgerDAO’s treasury grew its participation in influence markets by depositing and incentivising a new BADGER/WBTC gauge on Bunni (TCD#27)

More details in the report below.

Assets

• The treasury’s biggest positions saw upward price movements;

  • BADGER: $2.14 -> $2.82 (+31%)

  • BTC: $16,586 -> $28,583 (+72%)

  • ETH: $1,198 -> $1,825 (+52%)

• For comparison: the S&P Cryptocurrency MegaCap Index gained +66% in Q1

• Live dashboard of the treasury’s complete portfolio: https://lookerstudio.google.com/u/2/reporting/709ff9bc-23d3-46ed-b0aa-d7af77fe6ed9

Investments

• Opolis (BIP#49): the 17.9M staked WORK (~$210k) is now included in the “Other” assets section of the portfolio. Still another 8.9M WORK vesting over the next 30 months (~$104k)

• zeroDAO (BIP#50, BIP#96): zeroDAO raised $400k. They requested an extension on the 30% cut ($120k) to be paid out to BadgerDAO (rff), which was granted (vote)

Profit & Loss

Non-native (i.e. excluding BADGER and DIGG) P&L:

For a full profit and loss statement inclusive of BADGER and DIGG, please refer to this particular report: https://lookerstudio.google.com/u/2/reporting/24f03640-4369-4687-a92f-979fe946bb8b/page/p_z0k2snawyc

• Revenue has increased by 8%, due to TCL positions yielding more (+52%)

• A decrease was observed in vault based revenue (performance fee, withdrawal fee, minting/burning) due to deprecation of these products in the last quarter of 2022

• A reduction in consulting costs (no audits or substantial legal activities), and a shrinking of core contributors created savings in overall costs

• These effects combined resulted in non-native EBITDA being positive for Q1 ($225k)

Cashflow

• Partial divestment of the vote locked AURA into stablecoins (TCD#26) and the regular TCL harvests created a net positive inflow of stablecoins

• As a result, the most pessimistic stablecoin runway (zero revenue) was extended from 20 to 23 months

• However, if the average trailing revenue of the last quarter ($225k) is considered, it exceeds the burn rate ($192k) and thus turns cash positive. This does not consider any stablecoin inflows from divestments or other forms of rebalancing

• The BADGER runway however is looking more precarious, having decreased from 20 to 14 months. The Treasury council is focusing its attention on both decreasing BADGER burn rate where possible and increasing BADGER inflow

Restitution

The restitution program continued as agreed upon, in the form of deposits into remBADGER (73k BADGER) and emissions to remBADGER holders (95k BADGER).

The remBADGER program can be tracked live on this dashboard: https://dune.com/gosuto/remBADGER

Sources

• Most of the data presented here is sourced from various interactive reports created with Google Looker Studio, all updated at least once a day:

  • BadgerDAO Portfolio: https://datastudio.google.com/u/0/reporting/709ff9bc-23d3-46ed-b0aa-d7af77fe6ed9/

  • BadgerDAO P&L 2023: https://lookerstudio.google.com/u/2/reporting/24f03640-4369-4687-a92f-979fe946bb8b/

List of treasury’s on-chain addresses and corresponding links: https://github.com/Badger-Finance/badger-multisig#multisig-addresses

Be relentless. Be Badgers

In the past couple of years, numerous products have entered the market with the goal of solving this very issue. However, the shortfall of a lot of these new products is their coverage. As soon as it cannot price an ERC-20 token or does not support a specific type of action or protocol, it will end up rendering an incomplete report. Badger therefore had no choice but to write an application from scratch, in which all custom business logic for every single transaction that ever occurred, was correctly captured.

For the most part, on-chain data is being captured using ApeWorX's ape, custom Dune queries and Etherscan's API. Each data source has its own advantages and disadvantages, which is why it is important to pull from multiple. An obvious angle is leveraging Ethereum's logs, which both ape and Dune do well. Badger even added some events to existing smart contracts where they were missing, in order to capture them for reporting.

Alternatively, one could try to categorise all transactions based on their origin, destination or calldata. While this has worked in the past, what if the system gets upgraded and some addresses get replaced? What if an external system starts adding a different type of ERC-20 into the mix? Etc. Having a complete set of events in your smart contract system that logs everything is a must if you want to make sense of what is happening later.

Once all events are captured, an important next step is pricing them. For this the system is using historical data from both CoinGecko and Badger's API, the latter even allowing pricing a token at a specific block. This makes it possible to calculate the value of complex transactions dating back months or even years.

Finally, with all the events now priced based on their value at time of occurrence, all transactions will need to be categorised in accordance with traditional accounting specifications and requirements. Which type of revenue is this specific ERC-20 token transfer? Are these costs recurring or one-offs? Is this transaction internal or external? This is where Badger’s programmatic approach, made possible by a transparent and open-source protocol, really shines. In traditional systems, much of this labelling is done manually based on uploaded invoices and domain specific knowledge. The vast majority of Badger transactions however, are labelled automatically based on the underlying events and smart contracts. Only a tiny fraction of them still have to be labelled manually, for which Utopia’s app on top of the Safe multisig contracts proved to be very useful. It currently processes all of the outgoing transactions, and even those are mostly tagged by preset rules already.

This ETL process eventually results in a database of dated, priced and labelled transactions. Those in turn can then be read by data reporting tools such as Google’s Data Studio, in which various perspectives and reports on that data can be defined. Take for example 2022’s profit&loss report in USD, all costs expressed in their native token or the treasury’s current non-native holdings.

Badger will continue to progress the ability to understand and report on end-to-end financial performance:

• Strengthen the reliable and scalable system to extract, transform, and load data to produce financial statements

• Progress to trend performance over time against budgets and the ability to integrate analysis into product and treasury results

• Make more informed decisions overall that are better supported with enhanced financial planning and analysis

Be Relentless. Be Badgers

BadgerDAO was relentless in building through very difficult conditions in 2022 (see retrospective report). The challenges faced acted as a catalyst for elevating the DAO's business maturity:

• Numbers are more clear and sustainable, leading to better informed decision making

• Service providers are upgrading with more narrow focus and higher quality, at less cost

• The protocol is progressing towards more decentralization and censorship resistance

Performance highlights include:

• 2022 revenue of $4.6M is 25% higher than initial projections

• Year-over-year contractor costs were reduced by 45%, consulting support was lowered by 50%, and emissions will drop over 90% for Q1 2023

• Various products were discontinued, either due to their profitability or discontinued technical support elsewhere (i.e. renBTC)

• BadgerDAO ended the year with $22M worth of assets in its treasury, of which $3.5M are stablecoins. With a budgeted stablecoin burn rate of $192k/month for 2023, and without assuming any revenue or selling of assets, there is a 20 month runway. Also taking projected revenue into account, this runway extends to about three years

The following report provides more depth into performance and supporting financials:

Assets

• Bitcoin was swapped for ether to create a more balanced exposure to both (TCD#15)

• Again, to increase exposure to Ether, auraBAL was divested of (TCD#16)

• The total treasury devaluation of -$13.5M is mostly due to BADGER's price dropping from $3.44 to $2.10, next to general downturn in the cryptocurrency market (S&P Cryptocurrency MegaCap Index lost -13,6% during the last quarter of 2022) and a minor negative result over Q4 (see Profit & Loss)

Investments

• Opolis (BIP#49): 17.9M WORK staked (~$225k), plus another 10.1M WORK vesting over the next 33 months (~$126k)

• zeroDAO (BIP#50, BIP#96): zeroDAO is actively raising funds. BadgerDAO will receive 30% of funds that are being raised pre-token. At token launch, BadgerDAO receives 12% of total supply

Profit & Loss

Non-native (i.e. excluding BADGER and DIGG) P&L:

For a full profit and loss statement inclusive of BADGER and DIGG, please refer to this particular P&L report.

• The 2022 revenue of $4.6M is 25% higher than the initially projected 2022 revenues. The extra performance comes from BadgerDAO’s success in the Aura ecosystem, the launch of new products, and coinciding treasury management.

• Diminishing performance and withdrawal fees (especially in Q3 and Q4) for certain vaults forced product discontinuation per the policy. This has allowed for a better focus on the remaining, profitable vaults.

• At the beginning of 2022 the total projected expenses for 2022 were $5M stablecoins, 450 ether, and 2.5M BADGER tokens (excluding restitution). Actuals for 2022 show a spend of $3.9M stablecoins, 149 ether, and 3.5M BADGER tokens respectively (excluding restitution). This is a 20% reduction in planned stablecoins spend, ~63% reduction in ether spend and a 40% increase in BADGER spend due to market conditions and a one time restructuring cost. For more details, see this costs report.

• Further operational cost reductions in Q4 should lead to another 10% savings in stablecoins spent in 2023. Cuts to emissions and operating costs could lead to a 50% reduction in BADGER spend in 2023. The amount of ether will likely be the same as 2022.

• Contractors and (native) emissions continued to be the largest expense for the DAO in Q4 2022.

  • After the reorganization, a large portion of the contractors is now being paid in BADGER only, hence the reduction in non-native costs for contributors. Going forward, there is expected to be another 10-20% reduction in contractor spend, as well as a ~50% reduction in consulting spend.

  • A BIP was passed in Q4 allowing the DAO to cut back emissions to unprofitable products. For this reason, emissions in Q1 will be reduced by 90%. This will greatly reduce the sell pressure on the token and extend the operational runway.

Cashflow

• At the beginning of 2022-Q3 the DAO successfully reorganized its operating structure in order to extend the operational runway. These efforts were pushed further in Q4 reducing the total number of contractors and contributors. This has resulted in another ~10%+ reduction in stablecoins spent and extended the DAOs runway.

• With a budgeted stablecoin burn rate of $192k per month for 2023, and without assuming any revenue or selling of assets, the DAO will be able to continue to operate for another 20 months. However, based on results from Q4, a monthly stablecoin inflow of $50k-100k is expected. This would extend the runway to roughly three years without selling any of the current assets.

Restitution

The DAO has expended native and non-native assets to pay back victims of the December 2021 exploit. With a one time 600k BADGER outlay to seed remBADGER in 2022 and a one time expense of $10M USDC was used to buy BTC to distribute to victims of the December 2021 exploit. An additional 700k BADGER was deposited into remBADGER over the course of 2022 and the remaining 700k BADGER has been queued to be automatically emitted in 2023 to the remaining holders.

In Q4 the total outstanding denominated dollars from the restitution program reduced from $62.2M to $59M (-$3.2M). Due to market conditions and participants in the program choosing to withdraw, the nominal value of the remBADGER vault was reduced from $1.9M to $1.1M during Q4.

As of the end of Q4 a total of $2M BADGER have been distributed and $1.1M worth of BADGER are claimable from the remBADGER vault at current market prices. Were BADGER to return to its current 20 week moving average ($3.05), this would give a total of $3.7M paid to the victims who continue to participate in the restitution program. Note that the estimate is $13.7M if one includes the initial $10M in WBTC airdropped directly to victims’ wallets regardless of their participation in remBADGER restitution program.

Live Dune dashboard tracking the remBADGER program.

Sources

Most of the data presented here is sourced from various interactive reports in Google Looker Studio, all updated at least once a day:

• Google Looker Studio Report: BadgerDAO Portfolio

• Google Looker Studio Report: BadgerDAO P&L 2022

For a technical review of these reports, such as what (on-chain) sources they use, see this post:

https://mirror.xyz/badgerdao.eth/NE3VsnJUJbyn29-_icYpc9tq0mSo4Hisg5yMUOlEKdw

List of treasury’s on-chain addresses and corresponding links: https://github.com/Badger-Finance/badger-multisig#multisig-addresses

Be relentless. Be Badgers

Loss events such as the ones seen throughout 2022 are a double edged sword. On the one hand, you manage to expose bad actors. On the other hand, you do so at the expense of user funds and market stability which in turn creates a vacuum of negative sentiment that consumes even those with high integrity and good intentions. But as the dust begins to settle, the collective mission becomes even clearer: continue to build the tools necessary to promote an open, transparent and decentralized financial system, accessible to anyone in the world, built on the foundation of personal sovereignty.

For Badger, 2022 was a year of change, growth and preparation. Contributors understood the need to further decentralize the DAO while ensuring it was positioned to withstand years of difficult market conditions. Progress was made and Badger is prepared to keep building for years to come while pursuing the core mission of bringing Bitcoin to DeFi.

Many milestones were accomplished in 2022:

• Restructured the organization across contributors, service providers and the treasury to minimize costs and ensure a healthy 2 year runway

• Upgraded core smart contracts while developing new products and tools for both the DAO & users

• Progressed the governance framework by introducing smaller governing bodies (councils) with clear mandates, approved policies and democratic processes to make more effective & efficient decisions

• Re-evaluated existing products and their performance to define a clear path forward around better profitability and product market fit

• Introduced new Badger token utility through protocol integrations and treasury support.

• Developed deeper financial rigor with real time revenue, product, and expense analytics to better inform all decisions the DAO needs to make

Let's dig into the upgrades BadgerDAO made over the past year…

As markets continued to trend downward, it became clear that extending the operational runway was a top priority. In order to do so, it was imperative to conduct a comprehensive overview of operational finances, compile the data in an organized and transparent manner and prepare a thoughtful plan focused on longevity despite worsening market conditions. It was an important exercise to ensure the future goals of the DAO were aligned with its financial health. Fortunately this deep dive prompted the need to develop additional tools to aggregate financial data in real time which will soon be ready to share with the community.

Key outcomes of this exercise included:

• Financial modeling that informed an operational upgrade and an extended runway

• Treasury asset investments generating additional revenue

• More predictable understanding of costs and revenue streams

• Ability to monitor product financial performance in real time

At the beginning of Q3 2022 the DAO successfully reorganized its operating structure in order to extend the operational runway. The number of contractors was reduced to 9 from 23 and contributors shifted to active workstreams receiving grants paid in Badger. This has resulted in a ~60%+ reduction in stablecoin spend, reduced costs by over half ($2.6M) against forecast, and extended the DAOs runway by 2+ years.

Furthermore, the upgraded operating model now enables more focused outcomes by domain, can grow or shrink based on workload, and is significantly more cost efficient. Optimizations on building more focused outcomes and ongoing improvements to cost structure continue to be realized in Q4.

As of writing, BadgerDAO’s treasury currently has nearly $29m in assets with ~$18m in Native (Badger + DIGG) and ~$11m in Non-Native.

By establishing and implementing treasury management strategies based on the parameters outlined in BIP 89, Badger was able to leverage existing products to generate additional revenue streams. These have led to the DAO continuing to increase its holdings in yield influence assets as well as driving stablecoin yields to grow its operational runway. These positive gains in Q3 led to exceeding the original ~$3M annual revenue projection.

An additional ~$400k profit in stablecoins were brought in as a result of treasury farming efforts. This was nearly enough for the quarter to be breakeven after expenses, for the first time in 2022.

To date, Treasury Council decisions have resulted in $500,000 USDC in realized returns in Q3 and thus far in Q4 2022.

Read more on the decisions made: https://forum.badger.finance/c/treasury-council-decisions

Below is an overview of year to date revenue streams:

Maximizing Badger Token Utility

Since the treasury is a large holder of Badger tokens, it made sense to focus on creating additional utility for both the treasury and community to leverage across the ecosystem.

As a result, Badger token holders can now earn yield with Badger tokens in the following pools:

• Badger/FRAXBP on Convex

• Badger/WBTC on Convex

• Badger/WBTC on AURA 

• Badger/rETH on AURA

A lending market is also available on Euler Finance for depositing and borrowing Badger tokens.

Ribbon Call Options

Through a partnership with Ribbon Finance, Badger was able to execute three rounds of call option sales. In each round 100k BADGER call options were sold. The premiums on these option sales was able to generate a realized return of $26,900 for the Badger treasury.

graviAURA - Influence Innovation at Work

graviAURA is a semi-liquid locked AURA token designed to automate bribe collection and supports its own liquidity on Balancer. It leverages its vlAURA to vote for the pool it's in and uses the remaining votes for bribes which are sold for graviAURA and BADGER and emitted to holders. Since its launch in June of 2022, Badger has managed to leverage graviAURA to generate the following returns:

• $1.3 mil in vault harvesting bribes at 77% APY

• $500k in LPs earning 30-40% APY

As a result, the treasury owns vlAURA voting for:

• ~3.5mil in Badger/WBTC/rETH liquidity

• ~700k DIGG/WBTC/graviAURA

These positions are projected to continue earning 15-30% APY.

Track the ongoing yield harvesting program: https://dune.com/petrovska/balancer-aura-tcl-bribes

A full accounting of finances, operational restructuring, and the execution of profitable treasury management strategies has allowed Badger to make significant strides toward ensuring one thing: the ability to keep building with purpose and conviction. 2022 provided a unique opportunity to innovate, develop products and tools to fortify existing tech and continue to work toward a more transparent and decentralized operating model ultimately preparing the DAO to prosper during the next Bull cycle.

Let's take a deeper look at what Badger has been building.

Vaults 1.5

The latest innovation in vault technology came in the way of a trust minimized, yield farming system that enables real-time analytics and health checks.

Vaults 1.5 offers the same interface as SettV4, however it offers an improved experience by changing the return values as well as tracking of the following:

• All types of fees: Performance, Withdrawal, Management

• Real-time, by the block, tracking of Rewards and Harvest Efficiency

• Historical onChain data to track lifetime performance

This new upgrade was first launched into production with graviAURA in June and will continue to power any new vaults released in the future.

Read the Code: https://github.com/Badger-Finance/badger-vaults-mix-v1.5

Badger Registry v2 - The Road to Decentralization

The release of Badger Registry v2 was the first step in establishing critical and usable on-chain infrastructure. The registry provides a consistent, cross chain source of truth for all Badger infrastructure and vault products.

Currently, the offerings managed by Badger include:

• Badger API

• Badger SDK

• Badger UI

These surface both on chain and curated data, however, currently the API is centrally hosted and managed.

Take a deeper dive: https://gist.github.com/axejintao/a74f15af63ccf97d88e9881e934dbd60

Read the code: https://github.com/Badger-Finance/badger-registry

RewardsManager

The RewardsManager is a fully trustless (no governance required), virtual staking contract, that is meant to be used by all new Badger Vaults, offering a scalable, gas optimized reward claiming experience. The first iteration of RewardsManager (V1) has been used internally and has been audited by Badger contributors. In order to deal with self-emitting vaults, a V2 is currently in the R&D phase and is intended to fully replace the BadgerTree in the near future.

Read the code: https://github.com/Badger-Finance/badger-rewards-manager

graviAURA, onChainPricer & BribesProcessor - Cowswap Protected Trades

In developing graviAURA, Badger developed a onChain Pricer (now in it’s 4th iteration), which in conjunction with the BribesProcessor allows a Multisig to optimally sell bribes on Cowswap (MEV protected trades), while enforcing security rules such as ensuring that the bribes are swapped in addition to using a better than zero quote for pricing.

Read the code:

https://github.com/Badger-Finance/fair-selling

https://github.com/Badger-Finance/on-chain-pricer

Badger Ninja and APY’s

Vaults are complex and to understand the product performance you need behavioral analysis. Badger has done extensive work to ensure the most accurate, real time information is being displayed within the app while providing an additional layer of data for interested users to verify the numbers for themselves.

Badger Ninja provides users with in-depth analytics on every action a vault takes in order to better understand its fees, history, and performance. At present, Badger uses a 21 day moving APR to estimate performance for all 1.5 vaults.

Take a deeper dive on APY’s: https://badger.com/news/apys-explained

Check out Badger Ninja: https://badger-ninja.vercel.app/

Building towards a common goal while ensuring strong adherence to foundational principles relies on effective collaboration and clear process around how decisions are made. In addition to significant operational upgrades, Badger made strides towards improving work flows and promoting representative decision making by upgrading its governance model.

• Multisig operations have gone public. Repositories with all addresses, issues, source code and transaction logs can be found here: https://github.com/Badger-Finance/badger-multisig

• As of BIP 86, the Badger Council has more community appointed members than it does contributors

• BIP 89 established both a formal Treasury Policy and supporting Council to make thoughtful investment decisions leveraging assets contained in the treasury. All decisions to date can be viewed on the forum using the following link: https://forum.badger.finance/c/treasury-council-decisions/17

Badger continues to upgrade its governance to enable a more efficient workflow for all community members who wish to participate and will be sharing some exciting updates soon.

Over the past few years, the DeFi ecosystem and its new innovative technology has undergone significant stress testing in the form of exploits. While it is impossible to rid the world of bad actors, and while the intention is to avoid any type of exploit from ever happening, in the rare case that one is possible, it is necessary to learn from these events, immediately work to strengthen security and establish policy that benefits users while ensuring the health of the DAO. Following the front end exploit that took place in early December 2021, Badger contributors put this thinking into action.

The main objectives were immediately clear:

1. Contact the appropriate authorities and cooperate with the investigation to attempt to recover user funds

2. Enlist top firms to conduct a full review, harden security and prevent the potential for future attacks

3. Engage the community to develop a thoughtful plan to provide restitution for those affected

After notifying the appropriate authorities of the illegal activity that had taken place, Badger engaged legal counsel and cyber security firms Chainalysis and Mandiant to manage risk, support the investigation, harden security efforts and assist the DAO in its attempt to recover funds. During this time, all recoverable funds were sent back to affected users as approved through governance procedures. This resulted in nearly 40% of victims receiving 100% of their funds back within 30 days of the exploit. Following the return of recoverable funds, the community began conversations around additional restitution.

remBADGER and the Road to Restitution

Following weeks of detailed discussions focused on the best way forward for both the DAO and affected users, the community voted on an innovative way to restore lost funds over a period time and the first of its kind, remBADGER was born. The token allowed holders to earn a compounding and linear yield paid in $BADGER tokens with a total of 2 million $BADGER tokens to be emitted over two years. The only requirement for holders was to remain in the vault as long as they wished to receive restitution funds. An early withdrawal from the vault would forfeit all future emissions and instead transfer those emissions to the remaining participants.

All proposals surrounding the exploit and subsequent recovery and restitution efforts can be viewed below.

BIP 91: Reinstate rembadger Position

BIP 84: DIGG Boost Restoration

BIP 81: Buy The Dip

BIP 80 Restitution of non-recoverable assets via remBadger Sett

BIP 80: Parameter FeedBack - Seed Funds For Restitution Program of Non-Recoverable Assets

BIP 79: Restore Governance Tokens

BIP 78: Return Recoverable Tokens

BIP 77: Reactivate Smart Contracts and Recover Funds

BIP 76. Upgrade Smart Contracts

A total of 83 initial affected recipients participated in the remBadger program and as of today, only 78 holders remain. Badger has paid back ~13% of the USD value lost or ~33% of the total Bitcoin lost based on current market prices. To date, more than 1 million $BADGER have been emitted to the restitution victims via the remBADGER vault and the community continues to meet quarterly to discuss potential updates to the plan. Badger also publishes a quarterly report on the state of the program and DAO overall.

The current repayment program can be tracked below: https://dune.com/gosuto/remBADGER

A detailed accounting of security upgrades made based on the recommendation from top cybersecurity firms can be reviewed below: https://badger.com/news/badger-security-upgrades

With the proactive steps taken to ensure Badgers can keep building for years to come, it's critical those efforts are focused and grow from the lessons learned over the last two years.

One of the biggest learnings has been to ensure anything Badger builds is done while adhering to two core principles, decentralization and censorship resistance.

With the state of the industry, there isn't an option to “eventually decentralize the tech” while creating things that can be censored. Censorship resistant tech is a must at this point and Badger contributors are committed to building it.

Moving forward, Badger is going to double down on one singular focus, Bitcoin. Although we’ve explored new opportunities in 2022, the opportunity now is bigger than ever. In the past, we focused on the yield layers for Bitcoin in DeFi. Through that experience we’ve realized the need to focus on the foundation. A decentralized and trustless Bitcoin on Ethereum. Something Badger and other protocols can feel confident in building on top of for years to come.

Badger is also going to continue evolving the DAO’s governance, operational framework, Badger token utility, reliance on data driven decisions, and having relentless financial rigor around runway and treasury management.

Together as a community of Badgers we’ll continue pursuing our mission and ensuring the longevity of the DAO as our industry evolves to what we all believe it can become.

Be Relentless. Be Badgers

Learn Badger: https://docs.badger.com

Use Badger: https://app.badger.com

Follow Badger: https://twitter.com/BadgerDAO

Watch Badger: https://www.youtube.com/c/BadgerDAO

Join Badger: https://discord.gg/badgerdao