New to badger and am just wondering what exactly is the utility of the DIGG token? I understand that it’s supposed to be ETH token pegged to BTC price, but why wouldn’t one just hold WBTC (or TBTC if you insist on trustless ERC20 BTC)? Perhaps the reason DIGG keeps dropping vs BTC is it’s not really used for anything other than staking to get more DIGG, as far as I can tell.
Are there any plans in the works to add utility to holding or staking DIGG? Sorry if this has been addressed already. Thanks in advance for your insight on this
If I understand tBTC correctly, it’s collateralized 1:1 with bitcoin. While collateralization makes sense for them and the tBTC project, I don’t know how one can say that it’s trustless ERC20 BTC. Just like WBTC, it’s a smart contract that’s controlled by an entity that ultimately has to be trusted. DIGG is an algorithmic synthetic. And while it may not be perfect governance, while the smart contract is controlled by an entity, this entity is a DAO. It still requires some degree of trust, but I think that the trust dynamic is different, in s DAO, interests in maintaining value are much more aligned all around. if the DAO developers were to somehow manage to run off with everything, the value of it all would almost instantly drop to zero (or close to it). The other entities that maintain the smart contracts for BTC synthetics that are collateralized, in theory, they could run away with everyone’s BTC, and the BTC would still maintain most of its value. The interests in such a setup are not as positively aligned as they are in the Badger DAO system, with DIGG.
Thanks for explaining. That makes sense. I guess I just feel like everyone is dumping their airdropped/farmed DIGG because there isn’t a monetary incentive to hold. IMO the ecosystem would benefit from some sort of utility added to the DIGG token (for example like CRV being locked up for an yield boost). Is anything like this in the works or not so much? I know there is A LOT going on at badger with multiple products coming out. Appreciate the insight from anyone who’s been following all the badger discords etc
The incentive to hold is the multiplier and fees earned while everyone dumps. LP isn’t about trading, it is about holding longer term. The people who dump, don’t understand the underlying mechanics and end up just losing their upside.
Why would one want to hold it long term when it is losing value vs BTC and there is no existing incentive to rebalance it? In rebase one will own more of the supply, but if the token has no utility other than staking for more of itself, there is no incentive to accumulate more instead of dumping. Can you elaborate on the multiplier? That would only benefit if DIGG goes back above peg, right? What if it just keeps dumping?
I am not sure if I am misunderstanding the mechanics here. If I have missed something, please let me know. Maybe this could be partially mitigated in the meantime by adding BADGER rewards to DIGG pools?
Who says there is no incentive? Of course, there is. People buy up digg, drive the price above peg and then can sell it for a profit. Just like any token out there.
There are plans to bring more utility. CLAWS is one good example.
The documentation you just suggested I needed to read says it was only 10 weeks starting in November. There are no BADGER rewards now. Have you read it? Or are you just on here mindlessly defending anything badger-related that’s been done? You’d be wise to stop talking down to people in the community and instead try to understand where they are coming from.