Some big venture capital names are “sett” to join the Badger DAO community.
Bitcoin via Ethereum-focused DeFi protocol (decentralized finance) Badger DAO today announced a $ 21 million sale of DAO treasury assets to four major investors: Polychain Capital, Parafi Capital, Blockchain Capital and the well-known wallet 0xB1 .
The sale was part of a broader plan to “diversify the Treasury through strategic partnerships,” first described in Dachs Improvement Proposal (BIP) 37. The Badger Treasury, currently valued at over $ 600 million, is mainly allocated tokens and $ DIGG, a synthetic Bitcoin that is newly based, in BADGER, the DAO’s native government.
According to Chris Spadafora, founder of Badger DAO, the sale consisted of exchanging staked bBADGER tokens for USDC stablecoins, which will be used to create a “Badger Backstop” insurance pool. By diversifying a percentage of the treasury into assets like stable coins, the DAO also hopes to prepare for market downturns with a “barbell” portfolio allocation.
Spadafora said in a written interview with Cointelegraph that it is now up to the community to decide whether the newly collected USDC tokens should be invested in a return log or simply kept in the treasury. The terms of sale were not disclosed, although the announcement adds that the new partners “will participate in governance to grow the protocol, provide long-term liquidity and build more bridges with institutional ecosystem partners”.
The sale is among the earliest examples of venture capital firms investing in a DeFi through a DAO – and possibly the largest to date. In 2018, Adreessen Horowitz invested $ 15 million in MakerDAO, and earlier this month Synthetix raised $ 12 million from a group of VCs.
Such relationships have been the target of some DAO community members as VCs are often given preferential terms of investment. DeFi founders, however, largely agreed that VC companies give projects a unique value – a view that Spadafora also took.
“DAOs should involve large investment players because of their willingness to participate in governance and open their network to drive the protocol forward. To get it right for VCs, one has to become a community member versus an investor. “