Wen? Now! Bitcoin, DIGG, a BadgerDAO synthetic re-synthesizer goes live

After weeks of anticipation and a carefully watched series of preparatory steps, Bitcoin, DIGG, a BadgerDAO synthetic reboot, is now live and claimable for eligible references on Ethereum mainnet.

The statement will be warmly welcomed by a potentially overly-realistic community, one that has been lighting Twitter with a “DIGG smile” for weeks. However, despite all the memes and excitement, there is some serious technical work behind the distribution and maintenance of the newest Bitcoin asset on Ethereum.

Ultimately, though, now that DIGG is in the wild market forces is what will determine the long-term success of the synthetic Bitcoin asset – a success that may not be certain.

Fair, flat launch

According to BadgerDAO’s core contributor and distribution architect Jon Tompkins, the amount of claimable WLI for each eligible account was determined using a formula centered on Ethereum’s address activity in the BadgerDAO app. Factors such as total native platform badge tickets won, ratio of Badger won to Badger won, and total share days were considered.

To prevent allocation to “deep-pocket whales”, the DAO approved the application of root 1.75 to smooth the distribution between addresses. As Tompkins wrote in the original DIGG distribution offer, this root means that although in a linear distribution the top 100 addresses would have qualified for over 70% of WLS, instead they will be able to claim 33 % only.

Tompkins said that of the 600 DIGG tickets currently available, the highest address will receive 8.75 DIGG, while the average of 8517 eligible addresses will be able to claim .07 tickets.

The aim of this classification was to allow the project to “reward the little guys who are strong badger fans but not put the whales at a complete disadvantage,” said Tompkins.

Keeping a peg

Now that the ticket is live, the reintroduction 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 “repurposing” features that dynamically expand or contract the asset’s total supply based on default parameters such as price or time.

So far, however, they have proven to be far more effective at enriching consumers who know how to play the payback parameters than they have been in creating truly stable assets.

DIGG may be the first ever synthetic reseller Bitcoin, and certainly the first to feature this distribution method. Out of the gate consumers will be able to place their WLS in a vault bearing a product, use it to provide liquidity for Sushiswap and Uniswap DIGG / WBTC pairs, hold the core asset in anticipation of a positive return, or sell ‘ r tickets on the open market.

While there has been speculation about how DIGG will perform and what the best strategies might be, ultimately it is unclear to what extent the asset will be able to outperform the intended peg given BTC’s volatility and launch unique DIGG.

In a previous interview with Cointelegraph, BadgerDAO founder Chris Spadafora expressed hope that forthcoming additional stabilization mechanisms may help DIGG better track BTC.

“What we really want to do with our large-scale vault system is the dictators … let’s call it ‘buy and sell’ dictators. So through automated strategies we can buy when the time is right and sell when the time is right to get the best possible return for consumers, ”he said.

Upcoming vaults designed to play the payback games programmatically are designed to do just that, but given the unmatched game-theoretic landscape it is impossible to say whether the vaults will be sufficient to stabilize DIGG – or what happens after vault incentives dry up.

In the end, after weeks of anticipation, replace “Wen DIGG?” Now BadgerDAO participants signed up to take a spin at the latest rebate casino have to ask themselves, “What’s next?”