Badger DAO (BADGER) is an open-source, decentralized automated organization that strives to simplify the use of Bitcoin (BTC) as collateral across various smart contract platforms. The platform serves as a collaborative space where developers, known as Badger Builders, can work together to integrate Bitcoin as collateral into as many blockchains as possible. Developers may receive a portion of the fees and BADGER tokens from the developer mining pool for each implementation. The mainnet was launched on December 3, 2020. The pillars of Badger DAO include the Badger Builders, community-created products, the Dedicated Badger Operations team, the initial distribution of the BADGER tokens for governance, and the open-source nature of all code.

Badger DAO operates through two main products: Sett and DIGG. Sett is a decentralized finance (DeFi) aggregator with flash loan mitigation measures, focusing on tokenized BTC through five strategies. Users can deposit their assets and may receive compensation as the protocol’s smart contract does the work. To incentivize participation, farmers that deposit tokenized BTC into the Sett vault are compensated with BADGER and DIGG. DIGG is a non-custodial synthetic Bitcoin on Ethereum’s blockchain that is pegged to the price of BTC with a flexible supply and a re-base function. Its main goal is to eliminate the need for centralized third parties.

Badger DAO aims to provide a platform where developers can collaborate to implement Bitcoin as collateral across multiple blockchains. This opens up potential use cases in the DeFi space, particularly for those interested in leveraging their Bitcoin holdings in new ways. The platform's products, Sett and DIGG, provide users the opportunity to receive compensation on their deposits and participate in a non-custodial synthetic Bitcoin system, respectively. These features strive to provide users with more flexibility and control over their digital assets.

Badger DAO was founded by Chris Spadafora, a long-term crypto enthusiast and partner at Angelrock. The mainnet was launched on December 3, 2020. Since its inception, Badger DAO has been a community-driven project, with all product developments requiring approval from token holders. As of March 2021, Badger DAO (BADGER) has a circulating supply of 7,339,511 tokens and a maximum supply of 21,000,000 BADGER. The network's security is maintained through regular reviews by a security advisory committee composed of white hat hackers, and the initial audit of its smart contracts by the Zokyo audit team found no critical issues.

Badger DAO's Sett Vaults aim to offer users a variety of potential outcomes. They strive to provide a user interface that masks the complex aspects of DeFi, potentially making it less daunting for users to participate in yield farming. When Bitcoin is deposited into these vaults, users' assets are distributed across various DeFi protocols, which may result in potential non-financial incentives. This process is intended to lessen the workload for users. Furthermore, Badger DAO's Sett Vaults seek to provide potential non-financial incentives on Bitcoin holdings, which could differ from the annual percentage yields presented by other platforms. Lastly, the Sett Vaults are designed with the intention to pool funds together, potentially saving users on transaction costs. This pooling of resources may allow for potential non-financial incentives, considering the popularity and wide-held nature of Bitcoin.

Badger DAO implements a variety of strategies to mitigate potential risks and challenges associated with its yield farming strategies. It carries out regular audits of its smart contracts with the help of security firms, aiming to identify and rectify vulnerabilities before launch. It also employs a guarded launch strategy, where new Vaults are initially capped at a low ceiling during a testing period. This strategy aims to identify and rectify any bugs before Vaults are opened to the wider public. In addition, Badger DAO collaborates with a team of expert white hat security researchers who strive to review its systems and respond in real time to any vulnerabilities that are discovered. It also maintains bug bounty programs that reward the discovery of critical vulnerabilities, aiming to encourage bugs to be reported rather than exploited. Furthermore, Badger DAO aims to provide an additional layer of safety for crypto assets within its ecosystem through integration with a DeFi insurance protocol.

Badger DAO has incorporated several cross-chain capabilities to support this. One of these is the Badger Bridge, which is powered by RenVM, an open protocol that enables the permissionless transfer of value between any blockchain. This bridge allows users to convert native Bitcoin (BTC) to renBTC or WBTC, or transfer Bitcoin directly into BadgerDAO's Vaults. The Badger Bridge currently connects across four different chains: Ethereum, Binance Smart Chain, Polygon, and Arbitrum, with the intention of expanding its cross-chain capabilities. Another cross-chain feature of Badger DAO is the integration with Polygon, a platform for Ethereum scaling and infrastructure development. This partnership seeks to bring a yield-bearing version of Bitcoin to Polygon, encourage users to bridge BTC to Polygon, and develop different strategies to enhance the functionality of BTC on Polygon.

DIGG is a component of the Badger DAO ecosystem, functioning as an elastic supply cryptocurrency pegged to the price of Bitcoin. It aims to mimic the price of Bitcoin, with the intention to offer potential stability and optimization of the rebase for DIGG. The DIGG token operates on a rebase mechanism, which adjusts the token's supply based on its price relative to Bitcoin. If DIGG's price is higher than Bitcoin's, the supply increases, and if it's lower, the supply decreases. This rebase happens daily, affecting all DIGG holders equally. When users deposit DIGG in the DIGG-only vault within the Badger DAO ecosystem, they receive a token called bDIGG, which represents their share in the pool. This token does not rebase and can be used like any other standard ERC-20 token. Holders of this token are allocated DIGG tokens to their position via the liquidity mining program, which can be utilized within the DeFi space. This mechanism allows users to maintain their percentage ownership of the total supply, regardless of supply expansions or contractions.

Badger DAO addresses gas fees and scalability challenges through a combination of current blockchain and DeFi technologies, and community governance. The platform uses smart contracts and an oracle system for real-time information. It employs a distinct consensus mechanism, Proof of Stake, which aims to reduce energy consumption compared to Proof of Work. Moreover, Badger DAO's community governance allows for collective decision-making on strategic decisions, including those related to scalability and gas fees. The platform integrates DeFi applications, which can provide non-financial incentives for users and help manage transaction processes. However, like other blockchain networks, Badger DAO aims to address potential scalability challenges as the network expands, depending on the chosen algorithm and the increasing number of nodes and transactions.