BadgerDAO-Yearn.Finance Alliance to Design Sustainable Bitcoin Vaults

By Warren Hayes | February 22, 2021

Bitcoin-on-Ethereum yield vault initiative BadgerDAO has reportedly formed an alliance with yield vault platform Yearn.Finance, in a bid to make Yearn’s sustainable vault knowledge available to Badger. 

Specifically, Badger will reportedly carry out the migration of their existing synthetic Bitcoin vault balance to Yearn’s, and the Yearn vault will be visible within Badger’s app.

Moreover, the two protocols will reportedly team up to design a new WBTC vault, with both of them to share the fees from the vaults. 

“Today we’re excited to develop a partnership that will bring our teams together to further accelerate best in class BTC vaults for the industry. This is a step to further secure users funds as we continue to introduce more Yearn developed, maintained and secured vaults to our users.” BadgerDAO reportedly remarked via a blog post. 

The alliance between the yield vault initiatives will help achieve two targets – keeping yield for Badger vaults sustainable, as well as offering Yearn strategists more attractive compensation.

At the moment, the majority of the yield from Badger vaults is reportedly facilitated by the emission of $BADGER, BadgerDAO’s governance token, and $DIGG, a synthetic rebasing Bitcoin. Nonetheless, a cap will be applied on these yields, since only 21 million BADGER and 4 thousand DIGG are down the pipeline to get minted. Ultimately, the yields will run out. 

BadgerDAO further remarked that teaming up with Yearn will reportedly grant them the opportunity to conduct constructions for high-yield vaults, even at the absence of the distribution of governance tokens — ultimately a model with superior sustainability.

“Our goal is to create positive cash flow products. We can’t give badger/digg out forever,” said BadgerDAO founder Chris Spadafora. “ […] Helping compensate strategists through our dev pool will ensure developers are incentivized and are rewarded.”

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