After weeks of anticipation and a closely-watched series of preparatory steps, BadgerDAO’s synthetic rebasing Bitcoin, DIGG, is now live and claimable for qualified addresses on Ethereum mainnet.
The release will be eagerly welcomed by a perhaps-overzealous community, one which has been lighting up Twitter with “wen DIGG” for weeks. For all the memes and excitement, however, there’s some serious technical heft behind both the distribution and the maintenance of the newest Bitcoin asset on Ethereum.
Ultimately, however, now that DIGG is in the wild market forces are what will determine the long-term success of the synthetic Bitcoin asset — success that might not be assured.
Fair, flat launch
According to core BadgerDAO contributor and distribution architect Jon Tompkins, the amount of claimable DIGG for each eligible account was determined using a formula centered on an Ethereum address’ activity in the BadgerDAO app. Factors such as total native platform Badger tokens earned, the Badger earned to Badger staked ratio, and total stake days were taken into consideration.
In order to prevent an overallocation to deep-pocketed “whales,” however, the DAO approved an application of a 1.75 root to smooth the distribution between addresses. As Tompkins wrote in the original DIGG distribution proposal, this root means that, while in a linear distribution the top 100 addresses would have been eligible to receive over 70% of DIGG, they instead will be able to claim just 33%.
Tompkins said that of the 600 DIGG tokens currently available the top address will receive 8.75 DIGG, while the average of the 8517 eligible addresses will be able to claim .07 of a token.
The goal of this distribution was to allow the project to “reward the little guys that are strong badger supporters but not fully disadvantage the whales,” said Tompkins.
Keeping a peg
Now that the token is live, the rebase games begin.
Algorithmic stablecoins have been a hot topic in DeFi circles over the past few months as one of the most popular trading vehicles. The assets, which are primarily meant to track the price of the US dollar, have “rebasing” features that dynamically expand or contract the total supply of the asset based on preset parameters such as price or time.
So far, however, they’ve proven to be far more effective at enriching users who know how to play the rebase parameters than they’ve been at creating truly stable assets.
DIGG will be possibly the first-ever synthetic rebasing Bitcoin, and certainly the first to feature this distribution method. Out of the gate users will be able to stake their DIGG in a yield-bearing vault, use it to provide liquidity to DIGG/WBTC Sushiswap and Uniswap pairs, hold the core asset in anticipation of a positive rebase, or sell the tokens on the open market.
While there has been speculation as to how DIGG will perform and what the best strategies might be, it’s ultimately unclear to what degree the asset will be able to hew to its intended peg given BTC’s volatility and DIGG’s unique launch.
In a previous interview with Cointelegraph, BadgerDAO founder Chris Spadafora expressed hope that additional forthcoming stabilization mechanisms will be able to help DIGG better track BTC, however.
“What we want to do with our vault system is really at large-scale be the… let’s call it the ‘buy-and-sell’ dictators. So through automated strategies we’re able to buy when the time is right and sell when the time is right to optimize return for the users,” he said.
Forthcoming vaults designed to programmatically play the rebase games are designed to do just that, but given the uncharted game-theoretical landscape it’s impossible to say if the vaults will be sufficient to stabilize DIGG — or what happens after vault incentives dry up.
In the end, after weeks of anticipation, instead of “Wen DIGG?” BadgerDAO participants lining up to take a spin at the latest rebase casino now must ask themselves, “What’s next?”
- Coinbase has shared a public year-end report for 2020.
- The company claims to have $90 billion on its exchange, across a range of cryptocurrencies.
- Coinbase also details its relationship with Microstrategy, the tech company it’s helped purchase huge amounts of Bitcoin.
In a newly released year-end report, has said it now has over $90 billion in cryptocurrencies on its platform.
The report, which is geared to Coinbase’s institutional clients, was released Friday afternoon, and attempts to clarify the company’s place in the broader crypto ecosystem.
Topics include the state of Bitcoin in 2020, as well as , , crypto regulation, and “cryptodollars,” otherwise known as —these are cryptocurrencies that aim to eliminate volatility with backing from fiat money.
Coinbase, together with payments firm Circle, launched the stablecoin USD Coin () back in 2018. The idea is that the price is always $1.00, and that there’s one real dollar for every USDC issued. USDC is still a distant second to Tether (USDT) in terms of market capitalization and trading volume, though the growth of USDC is currently outpacing the market leader.
“The most common-use case we see for crypto dollars is efficiently moving funds between exchanges,” reads the report. “Increasingly, we also see private financings, e.g. venture investments in start-ups and new crypto assets, being funded with USDC by more crypto-savvy investors. Finally, we see a growing number of crypto users leveraging cryptodollars to engage with DeFi protocols.”
USDC’s market cap began 2020 below $500 million; it’s since risen to over $5.4 billion.
The report also details the Coinbase’s relationship to several large institutional clients, such as MicroStrategy and One River Asset Management. Microstrategy, helmed by Bitcoin evangelist Michael Saylor, has purchased a whopping 70,784 bitcoins in deals brokered by Coinbase—that’s over $2.3 billion.
Microstrategy’s massive investment may have played a role in the Bitcoin bull market this past fall; since the company’s first buy in August, other large institutional players like Square and PayPal have announced support for crypto in their payments products.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
Bitcoin Core lead maintainer Wladimir van der Laan has decided to take “even more” of a “background role” for the sake of further decentralizing the project, according to a new blog post.
Bitcoin Core is the key software underpinning the Bitcoin network. While van der Laan’s work is mostly “janitorial” in nature, making sure the project’s code proceeds smoothly, some in the community view him as a leader of sorts. As van der Laan puts it, he’s become a sort of “centralized bottleneck.”
His announcement comes after finding himself in the midst of controversy on Thursday. Some Bitcoin users didn’t like his decision to pull the white paper from bitcoincore.org, following legal threats from Craig Wright. But van der Laan maintains that this decision to pull back from Core is one he’s been thinking about for a while.
“I will start by delegating my own tasks, and decreasing my involvement. I do not intend to stop contributing to Bitcoin, or even to the Bitcoin Core project, but I would like to remove myself from the critical path and take (even more) of a background role,” he wrote.
He thinks this move will help to decentralize the project, a digital currency that is supposed to not have any leaders. “One thing is clear: this is a serious project now, and we need to start taking decentralization seriously,” van der Laan wrote.
His decision is a part of a much larger effort to further decentralize the project. For instance, 2020 saw a wave of Bitcoin companies doling out grants to developers working on the underlying protocol full-time.
Exchange OKCoin, for instance, is funding Marco Falke, who is the most active maintainer behind van der Laan in terms of commits – code changes that have been successfully added to the project. Popular exchange Coinbase is now supporting two developers as well, after receiving many requests to do so from the community. Several other companies have joined them in doling out grants over the last year.
Bitcoin Core contributor John Newbery launched non-profit Brink for mentoring and funding more developers as well, in an effort to get even more contributors involved, particularly from diverse backgrounds.
Indeed, van der Laan notes in his post that he’s no longer the most active Bitcoin Core maintainer, as several others have joined ranks over the years.
Plus, he outlines other ideas for decentralizing the project. For instance, Bitcoincore.org is one of the major websites where users can download new versions of the Bitcoin Core code. But it is privately owned and centralized. He suggests moving it to an organization.
“Bitcoin is quite different in some of the requirements here from other [free and open-source software] projects, so we’ll have to develop some tools as we go,” van der Laan wrote. “We could also, definitely, use some help here.”
He has asked other developers to step up to take his place as the leader of the weekly Bitcoin Core development meeting, where developers discuss pressing next steps.
Felt better than it should have.