BIP 23: Badger Revenue Management Overview

BIP 23: Badger Revenue Management Overview

Category: Governance
Scope: Define starting parameters for DAO assets specifically focusing on a) Diversified Exposure and b) Assets put to Work
Status: Accepted -

TLDR: Sell a portion of earned Bitcoin for Stablecoins and ETH to limit downside exposure and provide a broader range of assets to use productively.

NOTICE: The result of the votes in this BIP will be weighted to arrive at a final number in the case that a “0%” vote doesn’t take a majority. For example if three people voted for 10 and one for 5 the result would be 8.75. ((310) + (15))/4=8.75


  • BTC allocation
  • ETH allocation
  • Stablecoin Allocation


In collaboration with @DeFiFrog, we are submitting this proposal to kick off the discussion regarding Revenue Management and eventually regarding Treasury Management. The frameworks and descriptions laid out below should serve as the foundation for future discussions regarding the lens that BadgerDAO community members should consider.

With Bitcoin reaching all time highs it’s important that the DAO take actions to a) diversify asset exposure and b) optimize returns by putting BadgerDAO Revenue Pool Assets to work.

Currently sitting around the $1.2 Million mark after slightly more than a month of operating, the DAO Revenue Pool contains assets in roughly the following amounts/ratios:

  • BTC synths ----------------------> $790,000 —> 72% of Treasury
  • wBTC<>ETH LP assets ----> $265,000 —> 24% of Treasury
  • Staked SUSHI (xSushi) -------> $20,000 ------> 2% of Treasury
  • FARM --------------------------------> $14,000 ------> 1% of Treasury

This means Bitcoin is roughly 85% of our portfolio non inclusive of native treasury assets such as BADGER (and eventually DIGG, both of which are not held by the above linked address).

Towards an Integrative Model of DAO Capital Management:

We believe that this general framework below will be informative for both our community members and communities creating DAOs in the future. We’d like to make sure that we are aligned in structure and in taxonomy moving forward when considering the Capital Management of BadgerDAO. Please see the below equations:

  1. DAO Assets = Revenue + Treasury
  2. Revenue = % to Treasury + % Diversified Exposure + % Yield Generating + % Revenue for Stakers + % Buyback of $BADGER (Future BIP)
  3. Treasury = % Emissions for stakers + % OPEX (Grant BIPs such as previous Month 1 Grants) + % Partnerships (Partnership BIPs such as previous Cover and Nexus Mutual)

The treasury is made up of assets issued by the DAO such as BADGER and DIGG and can be thought of like assets on a balance sheet. Revenue is the income of the DAOs code since launch and can be thought of like the revenue on an Income Statement.

Before we dive, as a reminder, our operational goals roughly follow:

  1. Increase stickiness of Setts by extending use cases for wrapped assets
  2. Foster defensibility by providing the best incentives for strategists and large holders to build on the Badger ecosystem
  3. Further the Bitcoin and Ethereum ecosystems through development and contribution to the public goods upon which our success depends


Diversified Exposure: The current assets from revenue generating products are xSUSHI, FARM, btcCRV, and a Sushi wBTC<>ETH LP position. All of these assets have been earned through the combination of performance and withdrawal fees. All of these assets except FARM (which is unstaked) are income bearing assets and earn more assets for the treasury.

Given the partnerships and synergies with Sushiswap and Harvest, it is not in the interest of the DAO to sell these assets and harm these partnerships, the DAO should instead acquire in the interest of meta-governance, a topic for a future BIP.

We are proposing that BadgerDAO consider divesting a portion of its Bitcoin holdings and allocating it to the “Badger Utility Fund” splitting the proceeds between

  1. a stablecoin position, which may eventually be used in part or in whole for farming and
  2. an ETH position, which should be thought of like a utility asset.

There could be a number of future uses for these assets at the discretion of the DAO including: providing a fall back runway, security, insurance, and more.

Our recommended model is to pull a 20-30% one-time portion of the treasury. Diversify it 50:50 in to ETH and DAI. And pull a recurring 5% of the treasury to this diversification in a to-be-determined manner.

For consideration on the topic of asset diversification:

Should we pull a % of current revenue in the Revenue Wallet in a one time Diversification to create “Badger Utility Fund”?
  • 0%
  • 0% - 10%
  • 10% - 20%
  • 20% - 30%

0 voters

Of Assets Diversified into the Utility Fund, what should the ratio between ETH:DAI be?
  • 0/100
  • 25/75
  • 50/50
  • 75/25
  • 100/0

0 voters

Should we pull a recurring % of Revenue into the Utility Fund?
  • 0%
  • 2.5%
  • 5%
  • 7.5%
  • 10%

0 voters

Assets at Work: Currently DAO positions in xSUSHI, wBTC<>ETH LP, and various crvBTCs can be considered productive capital assets. These are actively deployed and provide a return to the overall asset base. crvBTC positions earn more of themselves in addition to CRV (if not in our strategies), wBTC<>ETH LP position earns more of itself in addition to SUSHI, and xSUSHI earns SUSHI.

The DAO should try to maintain a majority of assets in productive work using tried and trusted methods, gradually exploring a future with other risks. In the future it will become more important to define risk scales upon which to operate but that is for a further BIP.

The most important thing to keep in mind relative to risk is that you can’t win if you aren’t playing. DeFi moves quickly, it’s important to consider “slowness” in the places that the DAO is given the luxury of doing so.

Increasing DAO exposure to wBTC<>ETH LP position would present low risk of Impermanent Loss due to their highly correlated nature, and as both are crucial to what the DAO is doing this action would line up with DAO interests.

Sushiswap is building for compatibility that the DAO can utilize and as a portion of our treasury is a wBTC<>ETH Sushiswap LP position there are a number of considerations.

For consideration on the topic of asset deployment, recommending 25%:

During the one time diversification event, what percentage of the remainder of Revenue Assets should be added to our wBTC<>ETH LP position in a one time allocation?
  • 0%
  • 25%
  • 50%
  • 75%
  • 100%

0 voters

Technical/Business Requirements

  • Technical requirements are none for diversifying current assets. There will be minimal requirements for recurring revenue to the Utility Fund.
  • Business requirements as informed above.

I am in favour of the diversification plan listed above, but surprised there is no mention of the buyback. I was under the impression that a large percentage of the community has brought up that they’d like some of the funds used for a badger buyback.

I like the idea of using 20% for diversification, 20% for a buyback. Then having a recurring buyback and diversification of 5% each.


We wanted to get this initial treasury management BIP out to get the ball rolling and to spur discussion around the treasury. Buybacks are still on the table but so as not to let this BIP get too big we decided to break things into parts.

I’ll be monitoring closely here and taking notes based on common feedback and other comments the community has, that should inform how we do the next BIP!

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I’m sort of disappointed there was no mention of a buyback. I think the emissions are too high and preventing much needed positive price discovery. Diversifying into ETH + DAI also doesn’t seem to jive that well with me in regards to this projects vision. A buyback, to me, showcases 100% commitment. I truly believe if the emissions were scaled back a bit, the price appreciation would far outweigh the quoted APY. It just doesn’t make sense that this project is rank #9 in terms of TVL, and has little to show for it in market cap.


Always good to be diversified. I like the proposal. Thank you!

if i would own a company, i would initiate a buyback only if there is no need for money for any other case. buyback is the last thing i would do, if i dont know where to put the money.
at the beginning i prefer put money in expansion, or try to generate some value for the DAO.


Given the current emissions rate even substantial buybacks with our revenue would only create so much buy pressure.

Buybacks might make sense in the future, but we should focus on building the most successful business lines first so we have recurring income.


Love the suggestions, but I also recommend using a variety of stablecoins, not just one. This could include USDC, TrueUSD, Paxos Standard, maybe a rebasing stablecoin or two, and eventually our $CLAW stablecoin based upon what the community wants.


We should use the assets we have to create the most value for users and DAO participants. Further BIPs will cover more on how we put the treasury to work.

Based off the results of this BIP some of the first possibilities are low risk yield opportunities to grow the Utility Fund DAI holdings. This is bear market runway/ insurance fund/ xyz whatever the DAO decides it wants

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Along with Dai, of course.

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I’ll take note of this, based off the results of this BIP there will likely be some follow up BIP for implementation. A basket approach to stables makes sense. Holding our stable makes sense.

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Overall a sensible approach to managing the DAO assets, planning out for future expansion, and diversifying to manage risk allocation. I agree that the buyback is not a priority at this point and that we should focus on expansion.

Thank you

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Thanks for the feedback. We’re all a team, so consider framing your feedback differently and more considerately than “disappointed” haha.

With that aside, @mason’s point is something most have agreed on. Buybacks would not make sense at this point, but to Khaoz’s point, it looks like it must’ve accidentally been removed during our drafting. This section below should include a % buyback as well.

@mason, I’m updating the post now to reflect this.


I would also try to allocate some % into buyback. Also i dont understand why buy ETH if considering " to limit downside exposure" , if thats the case i would only stay into BTC and Stablecoin since i consider ETH being more risky than BTC.


how often for recurring buy of eth/dai?


I understand why it might be nice to have a little stable coin but it should be low and should not be Eth. If Eth is needed for a gas bank that’s all we should hold. A small buyback sets the precedent that there WILL be buybacks. Even 0.1% is fine for now… agree that lots of better uses today.

On a separate note. I don’t know how all these rewards get in there Mx how much do we earn per week, per aum? Some clarification would be nice.

I’m finding it difficult to vote on some of these.

This proposal is presented in a way of the community having discussed this for weeks on end, and here are the final choices. Yet, this has not been a hot topic at all.

I really don’t see how this has gone straight to a BIP. If someone had posted this that is not affiliated with the team in any way, I wager every single Badger that I own, it would have either been shut down or garnered no traction.

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I don’t know why people freak out with diversifying a portion of the revenues. If the team wouldn’t see a future in eth then why build on it?

So if we are bullish on both bitcoin and ethereum to succeed in the long term I don’t see a reason why not diversifying into eth. Now dai would also be useful to counteract volatility but what about just diversifying to eth? still the 20-30% but just eth and put it to stake on eth 2.0

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This is great work! I definitely agree that DeFi moves so fast if we’re going slow it’s as good as dying.

We need to keep pushing out new products and the Utility Fund seems like the best way to achieve this.


If the primary purpose of this is to stabilize then wouldn’t a majority of the fund be made up of whatever base currency you use or extremely low risk investment? For example, a US bank would have their reserves in USD or US Treasury investments. This returns next to nothing or a loss if you include inflation, but $1 in means you’ll get $1 out.

If we are stabilizing to the USD, then Dai or similar should make up a majority of the fund with some ETH to cover expenses that must be in ETH (gas for example). But to further the Bitcoin and Ethereum ecosystems, wouldn’t our reserve contain mostly BTC and some ETH? Once a reserve account is set up then diversifying could include USD and others.

Just a thought…