BIP 89: BadgerDAO Treasury Management Policy


Category: Policy

Scope: Treasury Management Policy

Status: Under discussion here and in the #rff-badger-treasury-policy channel on the Badger Discord.


Enact a BadgerDAO Treasury Management General Policy and appoint a Treasury Investment Counsel to draft and execute investments in order to optimize treasury holdings.


This documents contains the following:

  1. Background and summary of BadgerDAO’s crypto holdings.

  2. Defines the “BadgerDAO Treasury” and a general policy for managing the treasury assets. Along with the purpose of the treasury and community governance.

  3. Defines an “Investment Council” and its relationship to the “BadgerDAO Treasury” and “BadgerDAO Treasury Multisig”.

  4. Defines the “BadgerDAO Treasury Multisig ‘’ and how assets of the “BadgerDAO Treasury ‘’ will flow through the various Multi-sigs within the BadgerDAO ecosystem.

  5. Background on BadgerDAO

Badger is a decentralized autonomous organization (“DAO”). Badger is a community-run organization enabled by (1) the efforts of the community to the DAO and (2) the open-source technology underlying the DAO and all elements of the protocol. The platform is non-custodial, users have full control over their own assets, and transaction fees are automatically generated by users interacting in a self-serve manner with DAO’s smart contracts.

This go to market approach informs the foundation of the treasury enablement strategy.

Rather than a traditional treasury management structure, enabled only through traders, the DAO executes treasury deployment strategies through smart contracts doing the work, at scale, and the parameters of which were approved by a community voted BIP.

Here’s some treasury related strategies up until this point and all proposals are in the public forum and the final snapshots have captured community votes:

BIP 48 - Treasury USDC Productivity

BIP 65: Dogfooding - Deposit Collected Fees into Vaults

BIP 80 - Restitution of non recoverable assets

BIP 81 - Buy the Dip

BIP 82 - Emissions Q1 202


The proposal enables the DAO to automate web3 inputs and reporting to produce real time income statements and balance sheets.

For the purpose of enabling treasury management, three categories are referenced:

  • Treasury inflows
  • Treasury outflows
  • Treasury Present Holdings

Here’s a dashboard of the DAO’s treasury assets

(Note - page is under maintenance, Dune data is sourced directly from blockchains)

  1. “BadgerDAO Treasury”

The Purpose Of BadgerDAO’s Treasury Portfolio

The purpose of this treasury portfolio proposal is to balance inflows versus outflows into the DAO, and offset any differences to enable the DAO to continue in a financially sustainable manner.

BadgerDAO’s treasury management policy reduces risk against copy and paste, because the treasury should help produce more rewards for users than a copy project with no treasury to leverage for development and maintaining products.

  1. Governance

The Badger token holders have influence on the treasury through their ability to propose and vote on BIPs. In a hypothetical situation, token holders could vote to enrich themselves at the cost of the DAOs treasury. Since the DAO is a decentralized collective, there is nothing besides community sentiment that could put a halt on this. This proposal intends to progress safeguards here, such as token holders as voters can be upgraded to locked token holders which reduces risk of token holders acting in a short-term profit maximizing manner that is detrimental to the sustainability of the DAO.

By passing this BIP Badger token holders enact the policy outlined in this document. If terms in this document are found to be in conflict with the best interest of Badger token holders, they may be adjusted or removed, and ratified with another BIP acting an amendment to this document.

Additionally, if at any time token holders believe that the interests of this proposal are not being looked after, they may request the Badger Council to submit a veto, a feature of technical governance in development that will allow a relevant multi-signature safe to be timelocked and/or paused.

The passing of this BIP will require the DAO to publish data relating to the three accounting sections outlined below, eventually these will be surfaced through a real time front end reporting solution.

  • Treasury inflows
  • Treasury outflows
  • BadgerDAO’s Treasury Present Holdings (quantitative and qualitative holdings report, returns, risk, skew, etc.)
  1. BadgerDAO Treasury Current Assets

Key Wallets

BadgerDAO Treasury Present Holding 033022

  1. “BadgerDAO Treasury” General Policy

The following list will define general rules for managing the “BadgerDAO Treasury’’. Any operational body in BadgerDAO must adhere to these rules when interacting with the “BadgerDAO Treasury” or any assets contained in the “BadgerDAO Treasury Multi-sig”. The intent is to have rational safeguards in place to ensure high quality decisions and safe execution are being enabled to grow treasury assets.

  1. Transactions of more than 10% of BADGER or DIGG uncirculating supply must be approved through standard governance using a BIP.

  2. The Treasury will hold 1 years of estimated operating expenses in stablecoin. This will be split into 3 tranches (A, B, C). TrancheA will consist of one quarter of projected expenses in stablecoins. TrancheB will have an additional 6 months of projected stablecoin expenses, and TrancheC will have any remaining stablecoins. TrancheB and TrancheC can be used for farming/deposits to generate income to fund operations. TrancheB into low risk stable yields and TrancheC into higher risk higher yield vaults. Low risk would receive a score of 2 or lower in the categories defined under “Valuing an Investment” below.

  3. The Treasury may hold up to 1 year of estimated gas expenses in ETH and adjust what’s required based on execution efficiency which reduces gas costs. This ETH will be split into 3 tranches (A, B, C). TrancheA will consist of one quarter of projected expenses in ETH. TrancheB will have an additional 6 months of projected ETH expenses, and TrancheC will have any remaining ETH. TrancheB and TrancheC can be used for farming/deposits to generate income to fund operations. TrancheB into low risk stable yields and TrancheC into higher risk, higher yield vaults.

  4. DAO to DAO swaps or open market purchases are acceptable.

  5. All transactions require 5/9 YES votes by the Investment Council to be enacted

  6. Pre-launch, incubator investments will continue to go through the BIP process and will not be covered by this general policy.

  7. Anyone in the community can bring forward a proposal matching the guidelines below in “Valuing an Investment”. The Investment Council will review, iterate on feedback and then vote.

  8. No investments should be made that cannot be properly valued. See : “Valuing An Investment” below

  9. No single non-native asset, that is not Bitcoin, Ether or stablecoin, shall make up more than 5% of the treasuries non-native assets. Any exceptions must go through community governance.

  10. Priority will be given to BadgerDAO partners when considering directional investments and a supplemental partner policy will be developed to outline partner parameters

  11. Non-directional investments such as treasury controlled liquidity, staking and other forms of yield farming must be treated as any other investment and meet the criteria outlined in “Valuing An Investment” below.

BadgerDAO’s Treasury Approved Holdings Categories

  • Strategic Holdings: There are assets that help create a positive environment for bitcoin, e.g. CVX/CRV. The purpose of these assets is to drive rewards to the DAO’s community of users with Bitcoin and/or other strategic assets deposited in the DAO’s vaults.

  • Treasury Controlled Liquidity: These are assets that provide an efficient means of supporting native assets. For example, the treasury currently holds wBTC/DIGG SLP and acquired Badger/wBTC liquidity

  • Venture Investments (Badger Annexe): These are assets that are believed to grow at a fast pace who’s growth will likely help the DAO


BadgerDAO’s Treasury Investment Council will focus on three types of acquisitions:

  • Treasury Controlled Liquidity: BadgerDAO’s treasury strategically holds liquidity as a more efficient means of supporting native assets. For example, the treasury currently holds wBTC/DIGG SLP and Badger/wBTC liquidity.

  • Venture Investments (Badger Annexe): Take advantage of opportunities to grow the treasury (ZERO, WORK, tranche C deployments of USDC + WBTC)

Leverage proximity to new projects to take high upside bets.

  • Strategic Holdings: Assets that can help create a positive environment for bitcoin (CVX/CRV). Assets that can drive yield to BTC

Yield Farming

  • Any deposit into a smart contract to earn a fixed or variable return.

Investment Council Definition

  • Initial Council nominees
    • Jonto [T]
    • Dapp [S]
    • Lipp [T]
    • Po [T]
    • 1500 [T]
    • Gosuto [M]
    • Saj [S]
    • Ayush [M]
    • Petro [S]

A council vote of 5/9 majority is required to replace a member of this council and the same majority is required to approve an investment decision.

[T] - Treasury Policy Expert

[S] - Solidity Expert

[M] - Multi-sig operations Expert

  1. Multisig

For security purposes, the DAO’s contributors support treasury transactions:

  • Investment Council; enables the high level investment ideas and priorities, a 5/9 majority is required for a decision to pass
  • Treasury Operations; this is the multisig that implements all of the approved transactions

Decision execution process:

  1. Investment council approves a written thesis; 5/9 consensus used in discord emoji vote
  2. Investment council MultiSig (5/9) is signed to release funds to Treasury operations
  3. Treasury operations MultiSig (3/8) is signed to execute the transaction, manage outcomes as needed, or return funds to investment council MultiSig, as outlined in the governance of each individual investment

Having a well managed and organized set of Multisigs delivers increased clarity, speed, and security of accounting for all participants in the Badger ecosystem. Security is the most important factor when it comes to Multisig management, and the limits defined above in the general policy section along with the definition of the investment council helps reduce risks related to treasury Multisig operations. Therefore, the investment council must always consist of members who have a vested and long term interest in the badger ecosystem. This is why the initial council was chosen to be established with the members defined above who are long time Badger holders and active members of the community. This policy is not static and the members of the Council can be modified with community governance as contributors and/or the protocol progresses.

The Treasury Operations Multisig is expected to interact with the other BadgerDAO Multisigs.

The Tech Ops Multisig can be leveraged by the investment council for testing new smart contract operations. Any novel ideas should be tested in the Tech Ops Multisig before being

executed at scale in the Treasury Ops Multisig.

Any BadgerDAO assets that fall under the above Acquisitions category should be considered to have priority to be held in the Treasury Multisig.

  1. Venture Investments - Unless BadgerDAO has a need for the token it will be held in the Treasury Multi-sig and fall under the above treasury general policy.

  2. Strategic Holdings - Unless BadgerDAO has a need for the token it will be held in the Treasury Multi-sig and fall under the above treasury general policy.

  3. Treasury Controlled Liquidity; such as BIP 74


Valuing An Investment

The performance of each treasury asset and the treasury as a whole must have clear accountability to allow future governance by Badger token holders.

Written thesis

Each investment must have a written thesis made public to the community within 24 hours of any approved action taken by the investment council. The thesis should be no less than five sentences and no more than three pages. At a minimum it must include a qualitative statement about the investment and quantify the 5 metrics to measure success or failure outlined below and quantify the 5 risks below. Any numbers should include a one sentence explanation of the estimate.

What metrics will be used to measure the success or failure of an investment?

  1. How long will the investment thesis take to play out?
  2. Increase/decrease value in the treasury
  3. Increases/decrease in TVL
  4. Increase/decrease in Badger token price
  5. Increase/decrease in Badger token number of holders

What are the risks associated with each investment (0 being the lowest risk and 10 being the highest)?

  • Protocol risk (0 - 10)

Likelihood of a smart contract or a system of smart contracts (protocol) is exploited or funds are lost

  • Liquidity risk (0 - 10)

Liquidity risk refers to how easily an asset can be bought or sold in the market.

  • Market risk (0 - 10)

Market risk is the risk that arises from movements in stock prices, interest rates, exchange rates, and commodity prices. Metrics to consider : VaR, skew, sharpe.

  • Credit risk (0 - 10)

The risk of loss from the failure of a counterparty to make a promised payment, this should cover airdrops expected

  • Execution risk (0-10)

How long will it take to execute, how many signers on a Multisig or queue of things that must be signed first.

What are the thresholds for rebalancing an investment?

Any holding above 5% at the end of quarter must be rebalanced unless the action is vetoed through BadgerDAO token holders in a BIP. Because of the inherent volatility in the investments there will be a wiggle room of 2.5% meaning the council could allow a position that has grown to 7.5% of the portfolio to remain until the next rebalancing schedule. Additionally, one off rebalance BIPs could be proposed to align with an opportunity and/or to reduce risk based on market dynamics.

Investment Governance

The investment thesis should propose an investment governance approach that identifies interim milestones against which the investment thesis can be measured. For example, is the investment growing at the expected pace? If not, the investment should be re-evaluated against the original thesis and a consideration of next steps should be made.

This may provide opportunities to scale in or out of the investment as the interim milestone may provide an improved entry relative to the original thesis. The opposite may also be true.

Is the investment an actively or passively managed strategy and if active, what does that require?

Governance should also include the profit-taking strategy:

  • Will it be liquidated at the end of the time horizon and/or be renewed through another vote?

  • Is the intent to scale in/out of the investment (eg. DCA in and take profits along the way)?

  • Who is responsible for managing the investment to these objectives?

  • Are any additional approvals required to make these moves?


Should the General Treasury Policy be enacted and Treasury Investment Council appointed as described above?
  • Yes
  • No

0 voters

BIP 89: CVX Treasury Policy Amendment

Scope: Append BIP89-BadgerDAO Treasury General Policy to allow the DAO to hold up to 25% [+10% quarterly wiggle room] of non-native treasury assets as CVX or derivatives of (e.g. bveCVX).


The BadgerDAO General Treasury Policy limits non-native assets aside from BTC, stables and ETH to 5% of the total assets in the treasury to limit the total risk the Treasury Council can manage without explicit approval from governance. This amendment to the General Treasury Policy will allow a CVX position (or derivatives thereof) to make up to 25% of the total non-native assets in the DAO’s treasury. This amount can exceed 25% (up to 35% within a single quarter). This will allow time for the treasury team to execute orders during high price volatility. This will not supersede holding 1 year of stable runway and 1 year of ETH runway which will continue to take priority.

Current State:

  • BIP 89 requires the Treasury Council to divest CVX if the position is greater than 5% of the DAO’s non-native assets.
  • CVX currently represents ~17% of non-native assets

Proposed State:

  • Allow the BadgerDAO Treasury to hold upto 25% (up to 35% within a single quarter) of its non-native assets as CVX or derivatives thereof (e.g. bveCVX)


  • CVX is a fundamental component of the BadgerDAO boost ecosystem

  • Treasury CVX can be used to support Badger/WBTC liquidity on curveV2

  • ~80k CVX is worth 9.5% APR to 10m in deposits in Badger/WBTC pool, at ~17% non-native holdings the DAO currently holds ~125k CVX.

  • 2 standard deviations based on 100 day CVX price would represent a 50% draw down. This would mean at 25% the DAO’s treasury non-native VAR(100) from this position is 12.5%.

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