Title: Accept 0confirmation into Badger Annexe
Category: Treasury, Annexe
0confirmation joins the Badger Annexe. BadgerDAO will make an investment of ~$1m into 0confirmation, help with full production launch of 0cf Swap, assist with DAO transition, and bootstrap execution of long-term roadmap. BadgerDAO and its community will gain a significant stake in 0cf DAO upon its launch.
With 0confirmation, native BTC is only minutes away from being put to work in DeFi. Fees for 0confirmation services/apps accrue to LPs, Keepers, and the DAO.
Approval of this BIP gives core team approval to continue negotiation of the final details of the detail within the proposed parameters. Proposal can be amended based on community feedback.
An AMA can be hosted prior to snapshot for the community to ask questions.
What is the Badger Annexe?
The Badger Annexe is BadgerDAOs incubator where we will work with and take a stake in projects aligned with the badgerDAO mission in various stages of development where we see great potential. You can read more about it here:
What is 0confirmation?
0confirmation enables native bitcoin transactions at the speed of DeFi.
0confirmation is a protocol built to transfer confirmation risk when using BTC in DeFi. It has been developed over the course of a year by a team that includes current Badger Core members Jonto, and Mitche alongside Flex, the lead developer (who also recently started contributing to Badger as an ongoing contributor). The first product, 0cf Swap, has been deployed on mainnet in a guarded launch to limit risk until an audit could be secured. 0cf Swap initial implementation allows anyone to trade using native bitcoin on uniswap in under 2 minutes. This is accomplished through programmatic escrow contracts (borrow proxies) which hold the asset the BTC was swapped for until the BTC shift (using renVM) has completed.
- Homepage: https://0confirmation.com/
- Mainnet: http://mainnet.0confirmation.com/
- Code: 0confirmation/packages/0confirmation-sdk at master · 0confirmation/0confirmation · GitHub
- Docs: https://docs.0confirmation.com/
0cf swap is the first application built using the 0confirmation protocol, it is currently connected to a uniswap module but there are more swap modules in development:
- Curve cross-asset swap
- 0x Swap (focus on zapper)
While swap is an innovative and impactful application, the core components of 0confirmation have more potential utility as well.
- Gas as a Service - 0cf swap requires no gas, only a signed transaction (gas is paid out of shifted renBTC)
- Borrow Proxies - Can enable new vault strategies using “smart collateral” that can enable multi-block under-collateralized loans
And there are more products in the pipeline
- Smart Finality - Adapt the protocol to allow for “value based confirmations” when minting renBTC
- Beyond Swap - Almost any action in DeFi can be done in 0 confirmations using the 0cf protocol so there are endless opportunities beyond just swap.
- Cash Out - Swap BTC to any asset and auto-forward to any address (coinbase goes down but uniswap is never down, swap BTC in 2 minutes and have it auto forwarded to coinbase USDC deposit address once 6 confirms complete, all without ever needing ETH!)
These products allow bitcoin hodlers to deploy their BTC quickly, easily, and trustlesly into DeFi, currently on ethereum, but in the future on other chains and layers. In a true multichain world with bitcoin as the base asset in the center BTC on bitcoin should not be discouraged. 0confirmation allows all native BTC to be only minutes away from being put to work.
You can read more about 0confirmation Here:
Why it makes sense
By being able to abstract away confirmation times for Bitcoin, BadgerDAO can start offering the best user experience for native BTC in DeFi. By taking a stake in 0cf DAO, BadgerDAO will also benefit from the fees generated from the protocol’s wider deployment.
The plans for 0cf DAO had been in the works prior to Badgers launch and with Mitche and Jonto taking early leadership positions and driving the DAO and governance process rollout, it should be an easy transition to launch 0cf DAO out of Badger.
The goal of 0cf DAO will be to use the tooling developed as part of the protocol to continue to launch revenue generating products and support other initiatives focused on removing friction in cross-chain communication and transactions. The initial focus is obviously Bitcoin on other chains, a clear alignment with Badger.
BadgerDAO is already the best place for users to deploy their bitcoin in DeFi for yield, 0confimation can help expand on the benefits provided to users while bringing additional benefit to the DAO.
- Provide the best user experience for bitcoin users in DeFi with 0cf Swap and gas as a service
- The 0confirmation liquidity pool is held in renBTC and has potential to offer high yields to depositors, a potential component in a vault strategy.
- Revenue shares on natively deployed apps (as a key partner post launch)
- Participate in deciding on product direction and execution
0cf is best described as a middleware protocol to transfer confirmation and other risks that exist when operating cross-chain. The token will have very different utility compared to badger as the incentives will be for integrators, not direct users.
0confirmation operations are enabled through short term loans from a shared liquidity pool for the duration of bitcoin confirmation times (~1 hour). The need for assets in the liquidity pool is fully driven by the demand for the loans which, itself, is determined by trading volume. There are also nuanced risk parameters that need to be managed carefully over time. The 0cf DAO will focus on managing these parameters, building out more functionality on top of the 0cf protocol, and incentivizing volume through 0cf integrated apps. After evaluation by the badger and 0cf teams it was determined that it made more sense to have a separate token managing these incentives and allowing the opportunity for members of the badger (and wider DeFi) community interested in pushing the growth and success of this protocol to build a stake in doing so. More information on how to interact with the 0cf token will be released as full launch approaches.
The original 0confirmation team will work to bring 0cfDAO to launch with support from the badger core team and community while also continuing to contribute to the larger BadgerDAO roadmap. 0confirmation will run its own Early Contributor campaign to find the resources necessary to supplement these efforts.
0cf presents a unique opportunity as some of the parties involved in 0cf are already core members of BadgerDAO and 0cf is already live on mainnet, just needing audits, users, marketing, and token distribution to gain traction. Bringing 0confirmation under the BadgerDAO umbrella will allow for Jon and Mitche to continue shepherding 0confirmation as part of their responsibilities within Badger.
The framework for this deal will be slightly different than those that may be presented in the future but provides a valuable learning opportunity for the DAO as we explore further investments and diversification.
- $900,000 in bBADGER + $100,000 in bDIGG (use 7 day twap price) to 0confirmation
- 50% immediately available
- 50% locked for 12 months
- Badger core team will be involved in strategy for disbursement of any available funds
- Funds will be used to
- Keep motivations of the DAOs aligned long term through holding relevant assets in their treasuries.
- Help bootstrap the team needed to execute on the mid-term 0cf roadmap (with approval/input from badger core team).
0cf Token breakdown
- 30% 0cf DAO Treasury
- 25% to BadgerDAO / Badgers broken down by:
- 10% Badger Stakedrop (Structure to be built and used for subsequent deals)
- 10% BadgerDAO Treasury
- 5% BadgerDAO Options on a 30 day TWAP or a 10% discount
- 20% Volume mining/incentive pool
- 10% Founding Team (Vested 1 yr w/ 1 month cliff)
- 5% Early Contributor Program (30% upfront, 70% vested over 12 weeks)
- 10% Ecosystem Airdrop
Call to action
If you are interested in getting more involved with 0cf we need help in the following areas. We will be giving out grants in future 0cf tokens (and in some cases BADGER and/or DIGG from the 0cf DAO treasury).
- Product/Project Manager
- Front End & Back End Devs
- Solidity Dev
- Risk Modeling
- Governance lead
Up to 5% of the total supply will be used for the early contributor program. The goal is to build out a core team to continue contributing to 0cf similar to how badgerDAOs core team was built out through the community.