The anonymous analyst “Wezek Bruh” cited the main reasons why BadgerDAO and its native token linked to Bitcoin, DIGG could be a great opportunity for investors. DIGG was developed as a rebase token and can reduce or expand its offering to meet a price target, as Wezek Bruh explained.
The analyst believes DIGG has value as a potential speculative investment and as a “critical part of the Badger ecosystem”. DIGG holders have a fixed percentage of the total market capitalization of the token. Although the price is determined by market dynamics, the number of DIGGs an investor has in a wallet or smart contract can go up or down as needed.
This is determined by the positive or negative base, but as the analyst explained, this mechanism is designed so that the investor “always keeps your share of the pie”. Wezek Bruh added:
The most important aspect is that you should think about your DIGG position in terms of the percentage of total market capitalization and not the number of tokens multiplied by the price per token.
DIGG holders can use their tokens in a roof vault and receive rewards with the bDIGG token. There is currently a 43% APY with this product. In contrast to DIGG, bDIGG is not subject to the rebase mechanism. The analyst said the following about BadgerDAO and one of its Bitcoin-based investment strategies:
(…) You can buy DIGG which incompletely tracks the price of BTC, put it on Badger to earn 43% APY, and also get bDIGG tokens back into your wallet that you can use elsewhere within DeFi.
The analyst points out that BadgerDAO provides incentives to its users that both owners and the protocol can benefit from. The latter can therefore build a sustainable model.
How DIGG can be a hedge against the fluctuations of Bitcoin
As Wezek Bruh further explained, DIGG will be re-established within 10 days. The mechanism reacts to the fluctuations in the price of BTC. Therefore, it takes longer for DIGG to respond to a crash or a cop run. This window can be used for more investment strategies.
Since the token tracks the price development of BTC, DIGG can be viewed as a synthetic version of Bitcoin. An “impure” one, as the analyst claimed. However, BadgerDAO aims to integrate BTC into the DeFi sector. Wezek Bruh added:
Badger is solely focused on bringing BTC to DeFi. And with DIGG, it’s one of the few places that offer BTC returns. In the end, I prefer BTC over the newest token of the week.
Unlike other synthetic versions of BTC that operate in the DeFi sector, such as. B. Wrapped Bitcoin (WBTC), DIGG removes a risk factor by eliminating the need for users to provide collateral. The analyst believes that this protocol can achieve the “holy grail of crypto” by combining BTC’s function as a store of value with the “long term” benefits of the DeFi and Ethereum ecosystem. Wezek Bruh said:
The mechanics around DIGG may be different, but the benefit remains as DIGG owners get a direct BTC exposure to Ethereum to earn interest (bDIGG, ibBTC), issue loans against their positions and (most importantly ) as a composable asset in DeFi do a lot more!
Bitcoin is trading at $ 57.043 with a 7.6% rally on the daily chart. In the weekly and monthly charts, BTC shows a gain of 9.7% and a loss of 2.8%, respectively.