“Web3 is the next iteration of what started as the internet. While the internet was an evolution in exchanging information, Web3 is an evolution in exchanging value.”
These words encapsulate the vision and passion that drive Chris Spadafora, a serial entrepreneur who believes in decentralized finance. He believes decentralized finance can revolutionize the global financial infrastructure and bring financial freedom to billions of people.
Chris Spadafora founded BadgerDAO, a decentralized autonomous organization (DAO) dedicated to building products and infrastructure to bring Bitcoin to DeFi. His journey into Web3 began with a deep belief in ideologies of freedom and a desire to break away from societal norms.
In a recent episode of Beacon Podcast Web3 Unlocked’s second season, Chris shares his insights on the challenges and rewards of being a Web3 founder, the importance of building with community, and the future of DeFi.
Disclaimer: The views expressed in Beacon Podcast Web3 Unlocked are solely those of our guests; none of this is financial advice.
Inspiration to work in Web3
Chris’s journey into Web3 began with a deep fascination for Bitcoin and cryptocurrency. In 2015, he was introduced to these technologies, which resonated with his belief in financial freedom and his desire to break free from societal norms.
“I’ve always been a person that didn’t believe in adhering to societal norms. In 2015, I broke out of those norms. I was introduced to Bitcoin and cryptocurrency then and fell in love with ideologies represented in this idea of freedom.” Chris’s attraction to ideologies of freedom and decentralization is a common thread among many Web3 pioneers such as Vitalik Buterin- co-founder of Ethereum, and Gavin Wood- founder of Polkadot. Although the early days of Web3 presented challenges in building real products, Chris’s determination to create something meaningful in this space remained strong.
“I decided that I wanted to pursue a path in entrepreneurship. That entrepreneurial path was one where I wanted to have as much flexibility and freedom in my life as possible. I spent most of my time building in the early days of e-commerce, which was the first doorway to a similar level of flexibility that we see today in web3-based businesses.
Chris’s decision to focus on e-commerce in the early stages of his entrepreneurial journey highlights the importance of adaptability and the ability to recognize opportunities in adjacent fields.
By building his knowledge and skills in online user acquisition and sales, Chris prepared himself for the challenges and opportunities that would come with the growth of the Web3 ecosystem.
“I started to accelerate my knowledge around online user acquisition and selling online, and then, after a successful exit, I moved back to Toronto.”
After coming back to Toronto, Chris discovered that Ethereum had gained significant traction in the years since his departure. Reconnecting with old friends, he found many of them heavily involved in cryptocurrency. This familiar network, coupled with his enthusiasm, made transitioning to a full-time career in crypto a natural progression for Chris.
Journey from Web2 to Web3
As Chris delved deeper into Web3, he recognized the immense potential for decentralized innovation within this nascent ecosystem. At the beginning of his crypto journey, he experimented and collaborated with various projects, learning valuable lessons that would later influence his vision for BadgerDAO.
” Working full time in crypto was the beginning where I started bringing some of that knowledge — sales strategy, marketing, user acquisition — to new protocols and projects launching in 2016. Over the years, I continued to do that and work closely with some projects that went well and some that had bad actors behind them, which was unfortunate.”
Chris’s experiences with successful and problematic projects highlighted the importance of transparency and trust within the Web3 ecosystem. He realized that many early projects and businesses were driven by short-term gains and a lack of transparency, which ultimately led to manipulating people’s trust. This realization catalyzed Chris to create something that would address these issues head-on.
He envisioned an organization prioritizing transparency, decentralization, and community involvement, setting a new standard for how Web3 projects should operate.
“So that’s how that journey started. It’s been a wild ride, as you would imagine — a crazy ride.”
Chris’s journey from Web2 to Web3 was challenging. But precisely, these challenges shaped his understanding of what was needed to build a successful and sustainable project in this space. By learning from the successes and failures of early crypto projects, Chris identified three fundamental principles that would lay the foundation of BadgerDAO: transparency, decentralization, and community-driven decision-making.
The problem that BadgerDAO solves
As the DeFi ecosystem grew, Chris recognized a significant gap: A lack of infrastructure and products that could effectively bring Bitcoin into DeFi. This realization became the driving force behind the creation of BadgerDAO. Their mission was to build the necessary products and infrastructure to facilitate Bitcoin’s integration into DeFi and to do so in a way that adhered to their core principles of decentralization and community-driven decision-making.
Chris recalls saying this to his friends while getting started: “What if we think much bigger — instead of a product, why don’t we work on kickstarting and seeding a community that’s dedicated to building a whole boatload of products that are focused around the same thing, which is how do you bring Bitcoin to DeFi.”
By taking a grassroots approach and empowering communities from day one, BadgerDAO aimed to create a truly decentralized autonomous organization that could serve as a model for other Web3 projects. BadgerDAO’s approach to solving the problems of bringing Bitcoin to DeFi was innovative in terms of the products and infrastructure it sought to build and how it aimed to create a new standard for Web3 organizations to operate.
How does BadgerDAO work?
BadgerDAO is structured as a decentralized autonomous organization (DAO), which means that its community members govern it through a transparent and democratic process. The DAO comprises several councils, each responsible for overseeing specific aspects of the organization, such as treasury management, operations, and community engagement.
“For Badger, in particular, we have an Operations Council, a Treasury Council, and a Community Council. Across all these councils, Treasury is where the majority of decisions are happening on a day-to-day basis, and capital that exists is exclusively on-chain.”
One of critical features of BadgerDAO is its commitment to building with the community at every step of the process. From ideation to implementation, the community is actively involved in shaping the direction and priorities of the organization. This is achieved through various channels — including Discord, forums, and social media — where community members can provide feedback, suggest ideas, and vote on proposals. Another critical aspect of BadgerDAO’s operation is its commitment to radical transparency, particularly regarding finances and decision-making. All treasury transactions and expenses are visible on-chain, and community members can access real-time dashboards to monitor the organization’s financial health.
By combining a decentralized governance structure, community-driven development, and radical transparency, BadgerDAO has created a unique model for how Web3 organizations can operate. Such an approach instills a strong sense of ownership within the community and helps ensure the organization remains focused on its core mission.
Lessons learned building in Web3
Building in the rapidly evolving and often tumultuous world of Web3 has taught Chris several valuable lessons. Most importantly, there is the need to move slowly and deliberately, resisting the temptation to get caught up in hype cycles often dominating this space.
Chris emphasizes the importance of focusing on fundamentals and analyzing and researching the models, architectures, and designs being created. In an industry where everything moves at breakneck speed, it can be challenging to maintain this level of discipline. However it is essential for building projects that can stand the test of time. Another crucial lesson Chris has learned is the need to withstand the volatility and stresses that come with building in Web3.
As Chris puts it, “web3 founders are the ones that can survive. And survival is a real thing.” Another important lesson Chris has learned is the importance of focusing on a long-term vision that is bigger than oneself.
Qualities of successful Web3 founders
From regulatory hurdles and market volatility to the ever-present threat of hacks and exploits, challenges faced by Web3 founders are unparalleled in Web2. In addition to technical expertise and adaptability, emotional resilience and conviction in a bigger mission are crucial qualities for Web3 founders.
Another essential quality that sets Chris apart as a Web3 founder is his commitment to building for and with the community rather than acting as a centralized leader. He recognizes that the decentralized nature of Web3 requires a fundamentally different approach to governance and decision-making.
One that empowers the community to shape the project’s direction: “From the first day this all started, it was always, ‘There is no founder, there is no leader, there is no CEO, there is none of this stuff.’ I’m just a community member.’
Thoughts on recent DeFi hacks
Chris emphasizes that the immaturity of DeFi ecosystems means that only some vulnerabilities can be anticipated or prevented.The open and composable nature of DeFi, while enabling rapid innovation, also leaves projects exposed to the risks associated with their dependencies.
As he puts it, “you are only as secure as dependencies that you have as part of the system, as part of whatever is being built on. This interconnectedness means that a single point of failure can have far-reaching consequences, as evidenced by the ripple effects of recent high-profile hacks and exploits.
One key lesson Chris draws from recent events is the need for more significant investment in critical infrastructures that underpin DeFi. He points to the example of Vyper, the programming language used to develop many DeFi intelligent contracts, which has historically been underfunded and understaffed. By allocating more resources to these foundational components, the industry can help to mitigate risks associated with building on top of them.
However, despite the challenges posed by recent hacks, Chris remains optimistic about DeFi’s future. He dismisses the notion that “DeFi is dead” — arguing instead that the space is on the cusp of a significant revolution driven by developments like the rise of ETH staking. While risks associated with operating in this nascent space are significant, so are potential rewards.
Only by learning from past failures, investing in critical infrastructure, and remaining committed to the long-term vision of a more open, transparent, and accessible financial system can we continue to drive DeFi innovation and growth in the face of adversity.
