📺 AMA with Chris Spadafora of Badger DAO

got badger chris from badger who is a co-founder of badger we have an opportunity as the bankless community to ask chris anything i think he's representing the badger project here today this is uh this was brought up by communityvote so we asked who you wanted to have on the next ama and there was a resounding you want badger so we are bringing badger to you just some ground rules rules on this community ask me anything of course you can ask any question you want dave and i will try to field those questions to chris you can ask those questions in

youtube we are broadcasting this live right now also in the discord bankless members community we will prioritize questions there we do ask me anythings the second and fourth wednesday now of the month so this is coming at you live on a wednesday 12 p.m eastern time 9 a.m pacific time this is your time to ask questions of these fantastic projects david can you talk about why we uh are having badger on this for this conversation there's there's a theme here that i think is really

important yeah badger by popular demand coming into the bankless livestream just the amount of energy and community excitement around this project has really just blown everyone's minds and what badgers really trying to do is to to generate btc infrastructure in ethereum's d5 so just providing financial a suite of financial tools around btc but on ethereum and so it's trying to bridge the communities which is always an ambitious endeavor which is always in my opinion a noble endeavor to help bridge

the gap between the the btc the asset and the ethereum economy and so we're going to dive into what these suite of tools looks like and how they can help bitcoiners uh get their bitcoin expressed into defy and this this project has just like i said just generated a ton of community hype and excitement and so by popular demand we have badger dao here on the banquet ama absolutely i think there's a uh a question in the minds of of investors and everyone in the crypto community is it going to be bitcoin on defy or is

defy going to come to bitcoin but to bitcoin i've had some recent debates around this too and i'm super curious to hear what chris from badger says we are going to come back with chris in a minute but first we want to tell you about the sponsors that made this episode possible gemini is the world's most trusted cryptocurrency exchange i've been a customer of gemiini since i first got into crypto in 2017 and it's been my main exchange of choice to make my crypto buys and sells gemini is available in all 50 states and in over 50 countries worldwide and on gemini

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aave.com bankless community i'm super excited to have chris spotafora who is on the founding team of badger dow on this ask me anything chris how you doing today i am great ryan how are you i'm doing great um look you guys are putting out a lot of energy these days around this theme of um bitcoin on d5 and it's super exciting but i think we should maybe start with the the why for the community could you explain badger dao and and

start with the why so why does badger exist what what is the mission here the mission's straightforward right it's to build products and infrastructure necessary to bring what what i and many of the people in the community believe to be the best collateral ever invented into open finance and and to really accelerate how it gets there and when it's there give it utility because there's a you know the key statistic to think about is point seven percent of all bitcoin

is is on other chains and is mostly obviously on ethereum but like that's how little is actually been wrapped or bridged or whatever you want to call it so that's our mission but we don't want to just do it like a normal company or whatever you know we're completely community owned and and we're trying to rewrite the playbook on how businesses go to market how businesses operate how these open communities or collectives actually work to produce you know revenue and manage hundreds of millions of dollars and do it in a decentralized

way right like that was a big part of our mission is how do we push forward this idea of dowse and and how dallas could be self-sustaining businesses again with you know substantial amount of revenue and profit not just you know a way for someone or a group of people to kind of structure themselves and do certain things it's like let's use the power of the the technology that we can build today and and have a community run and own it so that those are some of the things that that really tie badger together and share the value and beliefs of the community

so chris let's talk about the the genesis of badger where did this initial idea come from and and talk about the decision to um focus on actual infrastructure on other change rather than doing something like wbtc or nbtc yeah so you know it's been shoot it's already april now so it's been almost a year since we started thinking about it me and a few friends i've been in the space about eight years um got into bitcoin relatively early it was an ethereum when it launched and i've always just kind of been on all

sides of the fence right like i've always perceived bitcoin and ethereum to be completely separate in different things and i never was a fan of you know a lot of the maximalism that that um that caused a riff right i always looked at is you know one we're one industry trying to push everything forward and we need to have each other's backs and we need to collaborate to get there um so it started with you know how do we build more financial decentralized financial products to put the bitcoin to work right put bitcoin to work that was

really where it started and and when it started i actually spent quite a bit of time digging into a lot of the other alternatives that are call them side chains to bitcoin right um you know the liquids the rsks the things along those lines and the fact of the matter is then and now you know the infrastructure the development community the interoperability and composability none of that stuff the tooling none of that stuff really exists um and it was a very quick hey that it's not going to make any sense to build it here and we're going

to focus on building on ethereum and and accelerate how we can how we can take that to market so that that was kind of the earliest stages and around then too was when we started to see you know the yearns and some of these projects that were open communities actually bring products to market that had great product market fit generate millions of dollars in revenue and operate in a way where it was like you know open anyone can come anyone can collaborate anyone can get involved and um anyone can build some really cool

stuff with the developer first mentality of the of the community organization and that was when a lot of light bulbs went off for us and we said you know what this is the path we can rewrite the playbook on how businesses get to market we're going to focus exclusively on how do you build the products and infrastructure to get bitcoin there and bring utility to it and um and we're going to build these products before we launch at least what we felt were good products to start with which were our vaults which are similar to urine vaults except dedicated to tokenized bitcoin so

we optimize the yield that users can get out of certain bitcoin op positions and then what our first attempt was at creating a synthetic bitcoin which is digg which is similar to ample fourth except um intended to peg to the price of bitcoin and uh let's go to market with these and let's do it the right way right let's let's be transparent with um who we are let's make sure everything was audited let's you know engage other communities as we prepare for launch like let's have the communities make the decisions on day zero well before launch so when we

got the you know the discord started in september of last year um you know it was really me and a few developers kind of putting stuff out hey this is the plan this is the token structure here are the products here's the code but here's here's all these things like let's figure out how we actually get it there and get it to the finish line it took almost three months but excitingly enough a lot of those individuals that got involved then were today their long-term contributors at badger they work with badger full-time

um and um they've been able to get us from where we were to where we are and there's 60 people now working on the protocol almost four months after after launch which is pretty mind-blowing and um you know our products you know our vault product which is our core product you know holds about 1.2 billion worth of bitcoin almost you know 20 percent of all the tokenized bitcoin on ethereum so for us um it was important to you know get off the ground with with the right products but also with the right community

because if we were going to try and rewrite this playbook we needed people that shared in the same values and beliefs because if it was if you didn't the longevity and the sustainability and the ability to have people actually work and dedicate their time effort resources on the protocol it would have been next to impossible to do so what we did was we said okay we're going to look across ethereum and collect and we ended up collecting 32 000 addresses and said people that have done these 19 actions that we felt aligned with like kind of three pillars

of our values one they participated in decentralized governance so if they voted on sushi or harvest or yearn or one hive or things along those lines uh if they use tokenized bitcoin in d5 so you provided liquidity on curve balancer sushi uniswap um you lent it out on compound maker whatever it may be and then finally if you contributed to public goods and we were the first group to um airdrop anyone that contributed to git coin through one through rounds one

through seven um and that was really like we felt like those people would be the exact type of people that really helped us get to where we needed to be and that was really how we launched and we said hey you know anyone that's done these actions come claim some badger and by the way here's our vault product and it just so happens to have i don't know a billion percent apy so why don't you why don't you get involved and uh and that was uh that was the start of it i think you guys have crushed it on like building out your community and there's

almost a playbook there and we've got already some some questions coming in from the bankless community on that playbook and we'll definitely get to that i just want to camp on this this this question you know going back to the why so uh why is bitcoin on d5 important you said it's because look it's a it's a over a trillion dollar asset right now and only a small percentage of it is actually being put to work we put out a post last week lucas campbell from our team put it put out a case for like the the trillion dollar opportunity for tokenized bitcoin he was specifically

talking about uh rent btc and that's the opportunity it's either all of this bitcoin ends up just being you know held forever or it's being put in productive use in kind of the crypto banking ecosystem or it's in d5 right and you guys are saying it should be in d5 i that that post though did chris trigger a uh back and forth i had with um anthony pompiano where you know he he was very much of the like mindset of uh no not bitcoin on d5 right um what we're going to have is defined

bitcoin and i want to get your take on that because i've got sort of my preconception i kind of compared it to like yeah but that's really hard because you're essentially trying to program on a you know ti 83 calculator when you have like a full pc with a full stack and a virtual machine and everything else um but he has kind of a different take on that i'm curious to get your take so having explored what it would take i assume you did explore this to build defy on bitcoin you came back to ethereum what's your

take on that whole debate my take on the debate is there's no right or wrong answer so do i think there will be financial services on the bitcoin network yes do i think those those applications and the ability to put your bitcoin to work on the native bitcoin network are going to happen anytime soon no i think they're they're quite a bit of ways away because of a lot of the things that we that i mentioned earlier right the developers the tooling the composability the the ease of usability

you know think about how long it took ethereum to get to the point where you know with a browser extension you can pop to different applications and start putting a variety of different assets to work and then have you know liquidity deep liquidity and markets and a variety of different players and products and like it's it's an ecosystem that in itself is going to take years to build on bitcoin and um because of that i just don't see and i don't know and i don't think that's like

oh okay guess what like you know bitcoin's never going to be able to catch up to ether or other change i don't think that's going to be the the case either because so much of the asset class is there already right and you have like i said 0.7 do i think um a hundred percent of bitcoin is gonna be moved of course not do i think 30 or 40 is going to be moved i sure do now what about the other 60 70 percent i think you know there's

going to be a whole segment of the market that doesn't give a about that and just holds it right i think there's going to be a good segment of the market that wants to maintain some of the security posture that comes with the bitcoin network um you know a lot of and i saw i saw anthony talking about a few folks like sovereign or whatever and you know i know this auburn crew their good crew they're trying you know they're doing their thing but at the end of the day you know if we're gonna call something what it is not speaking about sovereign in general but just more of this concept um

anything that could potentially be built on bitcoin today is not technically being built on bitcoin right and if you like rsk is a good example like all these different chains right like it's not technically on bitcoin um there's kind of like this multi-sig ish thing happening outside of that so like the whole argument around decentralization and security for bitcoin in particular is somewhat removed immediately because now you have a level of centralization that has to happen to facilitate these

types of applications and services but you know my take is and badgers in you know my opinion as as a community member at badger is you know we are chain agnostic you know we believe bitcoin is going to be on a variety of chains including being used on the bitcoin network and we'd love to support that when the time comes um but today the majority of it's being used on ethereum and we're starting to see other chains uh really start to accelerate even just yesterday we launched vaults on finance smart chain and we're intending

to launch on layer two solutions and a variety of others down the road but you know that's our take ryan yeah it's a good take you know the interesting thing here is i think there's something in the thesis for everyone right um if you're a bitcoiner if you're a bitcoin proponent you love the asset itself you want bitcoin to be propagated everywhere you want any crypto banks you want to defy you want it everywhere and if you're uh maybe a d5 maximal somebody who believes in kind of the bankless vision then you want all of those assets to come into defy right it ethereum serves as a

gravity well for all of the world's assets as we've we've said so often uh before so there's kind of a win in both places but i think this maybe brings the first um bankless like bankless consumer question here uh somebody from the community asks a question about the binance smart chain actually because and i think this is a deep question so let me post it this is from graham why are so many projects according to binance smart chain where it is centralized and controlled by 21 validators is it for fear of being forked there do you believe in the chain

is it user choice i think he's presenting that question to all projects but also to you specifically why why uh binance smart chain so two reasons one um in no particular order that is by far the the chain with the most bitcoin being put to use outside of ethereum and we care about bitcoin right we care about utility for bitcoin regardless of where it is and making it easy for anybody and everybody um to put that bitcoin to work

two um well actually there's three reasons two it's driven by the users right i couldn't even tell you how much user demand was coming around finance smart chain and how many users were already using but we and we saw that even just with our launch yesterday we launched with interest-bearing eth assets so like we didn't say hey bring badger and dig we said no you got to bring the staked version of badger and the staked version of digg

cross chain and then lp that and then deposit in our vault right so think about all those loops we still had 25 million dollars cross chain in in under 24 hours right like that tells you a lot and obviously the apys are high and you know all those types of things happen but you know the the proofs in the pudding as it relates to the the user demand and then i'd say the third piece is um is ease of deployment right like it's it's it was not hard for us to really ramp up to deploy our

infrastructure over there from the graphs the keepers the actual contracts the multi-sig infrastructure like you know and then for users to just kind of plug in with their meta mask and do what they've got to do there's such little friction now and um and i believe we're gonna see a lot of we're gonna see a lot of projects kind of flocking not flocking like it's our home like there's no doubt about that right like we're not at all and you probably could tell i'm canadian with the way that i said that but nonetheless like that there's no doubt right we're

building a ton on ethereum and like ethereum's our focus at the same time we gotta we gotta provide utility where bitcoin is being put to work and we gotta we gotta uh fulfill what the users want and where users are spending their time as well so that's how we look at it i'm not concerned around forks and all this type of crap for the core team at least and thinking about the product those are things that we thought about so chris i want to dive deeper into that because you said something that i want to tap into which is that eat you know ethan's the home oh am i muted

oh no you're not muted no i'm not not to you guys on obs um uh and so you guys you said ethan is your home uh and so i wanna and then i also i personally i have skepticism as like the long-term usage of something like binance smart chain outside of a bull market right like you know there's a plenty of usage to go around during bull markets but during bear markets does that usage do those users and liquidity stick around and so i kind of wanted to dive deeper into what you mean by when you say eth is your home right because many many assets

become issued on ethereum first and then find their ways to other blockchains binance marchain like any other evm compatible ones and because because they're compatible with ethereum they these these assets can float around the the whole crypto world right not just ethereum but they were issued on ethereum first and foremost and so that ultimately settles to ethereum so when you say like ethereum is your home dive into that a little bit more like what does what does badger dao have on ethereum that perhaps maybe you can't

replicate anywhere else or is is it actually badger dao really just a nebulous thing that exists wherever the users go how does that work out well from a practical perspective ethereums are home because that's where governance lives and that's not going to change right um and that's obviously specific to our project because our project runs as a community governed initiative um so that's you know from a practical standpoint um from a not a not so practical standpoint when we're building um and

integrating with different protocols and looking there's so much work to be done on ethereum like just enormous amount of work and even if you look at you know what we've brought to finance and what we're going to be bringing to other chains it's really like what we brought to ethereum a few months like when we first launched which is like you know here yield optimization vaults here's the strategies that they run you know these are the types of things that it can do um and that was the extent of it and and when we look to bring things to market we're most likely going to be bringing

those things to market first on ethereum and spending the time to really develop them there and then looking to how can we do it but also do it in a way where it's not a huge technical lift for us that's a that's a big thing right like you guys know and a lot of people know like you know finding talent's not hard not easy you know we've been lucky enough without doing the job posting to have 60 people working with us but neither here nor there we're stretched you know ridiculously thin on all the things that we're working on but there

is still so much of an opportunity um to to continue to be like the home for bitcoin on eath and there's so much more to the stack and to the utility tool belt that we need to build um because for badger today and i've said this so many times publicly but i'll say it again you know badger accelerated because they were the best you know best farm best apy for bitcoin right in december and january and so forth um but you know again when you look at the bull market

you know that could sustain for a period of time especially when the majority of ours like many others yield is subsidized with token distribution and rewards right like that is not sustainable at all like nowhere close to sustainable so for us there's still so much utility that we need to build and we're going to be building uneath and potentially looking to how we bring that to other chains down the road but that's you know that's what we think about when we think about um eath being our home and you know it's a quick piece around

utility like where do i think utility can come for us and for projects like us you know it's it's interesting what's happened we've you know we've collected so much capital like billions of dollars in bitcoin and and a few other um like our native assets badge and so forth that you know we can create a sin you know use the synthetic layer on top to create a variety of other assets that unlock the liquidity and create capital efficiency in those positions eventually becoming the best place to

unlock liquidity in any btclp position um because that's where the majority of our our deposits are they're either curve ops unit swap lps or sushi ops so for us that's our focus around utility so that people can further participate in d5 and i think that's going to happen a lot like a lot of the protocols today are going to be more of the primitive protocols tomorrow and it's like how do you kind of transition to be more on the bottom of the stack than on the top of the stack just just one last one on this because i think this is all all part of the philosophy of the project and it's

important then we want to go into quickly uh the components of badger down make sure everyone listening understands those and there's some some other of your questions coming in but i want to ask this chris because i think this dovetails with what graham was asking is um do you worry that we lose the definition of defy somewhere in here so i think that's what really graham is is is kind of getting at right so when when we call something defy and it's really on the binance smart chain that's managed by 21 validators and looks a lot more like a crypto bank

is it really defy and and maybe the answer that question is what's the definition of d5 is another question right so that's the question i'm going to ask you chris is what is your definition of d5 my definition of d5 is a financial system that's predicated on peer-to-peer transactions right when i think about decentralized finance i think about that i think about removing the bloat of the middle man i think about um people being

able to own and control their own assets and having the ability to participate in finance like they've never been able to participate before but because of the value proposition on both sides of the fence they're actually interacting with other individuals that are doing the exact same thing and that's you know that's kind of how i think about the future financial systems that we're building today but are going to obviously evolve tremendously in the future and so do you think that uh definition for d5 extends to something like the binance smart chain

i think so i think so you know if we go with that definition um you know if if someone's you know lping on on an smart chain and they're making a trade they're trading with someone on the other side right um you know they're using something like badger it's not like badger has control of those assets it's just a set of smart contracts in the end of the day um so yeah that's i think it does you know again

it kind of goes back to and i know you know there's been some controversial things that you guys have gone into with a few folks online over the years but you know just in general you know i've just never been a fan of of any type of purist type perspective on things because i think it it it moves the needle away from needed innovation regardless right like this is so ridiculously early anyways like what it is today won't be what it's like tomorrow but like an example okay here's an example if binance smart chain didn't come with

such a which with such a powerful push in the last three months it wouldn't have accelerated something like multi-chain that the any swap team and andre collaborated on building to be pushed to the forefront as fast as it had they were looking at you know getting something off the ground six to nine months from now but because of that we're starting to see all these tools and tooling being pushed to the forefront and the fact that we were able to through messaging through community engagement obviously

through incentivization you know have 25 million dollars in in 24 hours move across chains like think back to like 2017 when everyone's going balls crazy about like atomic swap stuff and like that right like things are actually happening where it's going and the centralization of where it's going and all these types of things in my opinion don't matter nearly as much because of what's actually happening and how that's gonna be what you know what pushes what's gonna

happen forward so much more you know so much faster yeah i think look i think the the bankless take on that on this uh whole thing is um what what you're saying is true like the adoption of binance smart gene is actually good because it pushes ethereum to to scale more i also think we probably come at this with with different perspectives right like so badger dow you're all about optimizing yield for for bitcoin that's super important that's what the whole project is about um bankless has to have a

little bit of a um a view a viewpoint perspective that is consistent with our philosophy in our name which is we're trying to remove the banks like what we don't want chris is to create a a a worse system than the than the one we came from right it's like it's protocols not kings right and so where we see points for centralization for more banker control that's where we're less likely to to hit the accelerator and more likely to hit

on the brakes but i agree like this is all going to evolve in the way that it needs to and ultimately ultimately if the thesis is right that you know the the most decentralized protocols most credibly neutral protocols will win then none of this matters it'll just play out in the way that it's playing out let's get to the components of badger dow now because i wanted you you referenced them earlier i want to make sure folks understand this and i'm actually chris going to pull up uh the badger dow app to to explain this but can you tell us about first this

first component that i think is important which is set what does set do so sets our name uh for our vaults so the reason why we called them sets was because that's actually the home of a badger so there's a lot of you know there's a lot of memeing that happens in our ecosystem um including the fact that you know the honey badger is is our our lead thing but nonetheless uh it's called the set because it's the home but they are actually individual vaults so if you were to ryan click on any one of these