Recordings
Meeting Notes
Transcript
All right, cool. So we can maybe just get started with some little basic intros and then we'll dive into the protocol itself. Maybe we could start with you people. If you're going to do most of the talking. But maybe just a little bit of background on yourself as far as it pertains to crypto and where you fit in in the being team, like what your role is, what you tackle. Yeah, Take it away. Sure. Thank you very much for having us. Oh, and I apologize. Usually I have people on here who well, actually, I think I think you guys would know this, but this is Timmy. Timmy on the account talking. Didn't fail to introduce myself because usually people know. But apologies take it a lot. No, no worries, brother. And thanks again for having us so. Me personally, I'm one third of Publius. We Publius are collectively the pseudonymous founders of Bienstock Bienstock was originally founded entirely anonymously, meaning we didn't tell anyone who we were. And we can get into why we did that and why we thought being anonymous was better for the long term success of Bienstock. At this point, we're doxxed. The docs was one of the results of the April Bienstock exploit because of our anonymity. A lot of people thought that we were somehow involved in the hack, and so we came clean and basically said, This is who we are. And you know, we didn't have anything to do with it. And maybe a little more positive spin on our, you know, relationship to is that the three of us have been involved in crypto in various capacities for the past five years ish, maybe even six years now, and have skill sets ranging from economics to computer science between the three of us. And we're we're we're all like 25 ish. Cool. And is, is guy one of the three you're talking about or Scott If you come in after the fact. Yeah. So at this point there's a huge set of contributors like in the dozens across a variety of different organizations contributing to Bienstock and Guy is one of the contributors to Bienstock Farms, which is a, an open development organization funded by the Dow to work on Bienstock. But it's not a guy as a separate entity from this. Gotcha. Okay, cool. Sweet. So, yeah, let's maybe jump in the beanstalk officially. Guy, if you want to give a little intro, feel free. I'm just I'm not sure how much of the talking I want to do tonight. I know you indicated though mainly Publius, but if you'd like, feel free. Actually, yeah, it might. Let's do the talking. Okay, cool. It might be good. Real quick to just shout out how Beanstalk Farms fits into it. You can chill your stuff for a minute. I think you guys also do like spaces. Is that correct? Or Well, I guess the podcast, but the quick TLDR on what Beanstalk Farms is is just as published mentioned a set of contributors that on a recurring basis proposed budgets to the Dow, to mint beans to fund development. Progress does not work as part of beanstalk farms for say, all the folks that who have found Beanstalk and contribute to Beanstalk through Beanstalk farms. You just found Beanstalk organically and didn't found it per se. Cool. Sounds good. All right. So yeah, let's dive in. So maybe a little basic overview of like being just at face value. You know, if you are giving someone the couple centered summary, then maybe we can get into a little bit of the history because from what little I've sort of learned and seen, it looks like currently minting is turned off. You guys went through a hack at some point. I know that just like I think there's a lot of stuff to dig through, but what started at the highest level sort of face value for people who aren't sure what bean is, how would you pitch it or describe it? Okay, so we'll do our best to try to describe Beanstalk in a simple, unintelligible fashion if we lose it anywhere. Timmy, let us know. So, yeah, well, well, well. We'll get through all the details of questions. No worries. I'll let you get through. Beautiful. So, Beanstalk is an open source protocol that is deployed on the Ethereum network that is designed to issue a low volatility money. Now cryptocurrency and the general design space for cryptocurrencies has generally moved pretty unanimously in the direction of hard money or store of value optimizations and bitcoin and ether, which are by a pretty wide margin, the largest cryptocurrencies at this point. Both have monetary policies that significantly optimize for a store of value or number. Go up dynamics, which is valuable clearly. But when it comes to facilitating economic activity on chain number go up, currencies are not very useful for businesses that need access to loans. And the the reason for that is if you're a business, you don't want to denominate your liabilities or your loans in something that may ten X in value over the course of the loan. And so given the amount of economic activity today in today's economy, that is a function of credit or loans. There is a need to have the ability to borrow money on chain in a competitive fashion to borrowing money off chain. And when we're talking about borrowed money, there's the money itself and then there's the interest rates on the money. And what beanstalk is an attempt at fundamentally is creating a low volatility money with competitive interest rates compared to other currencies. So whereas most cryptocurrencies are currently designed for number go up, being stock is designed for numbers stay about the same and the concept of a stablecoin is in and of itself pretty well understood. But other stablecoin designs, or at least other stablecoin designs that have been implemented to date each have a variety of issues with them of the successful attempts at Stablecoins, the largest ones have both the centralization and censorship issue, but more than that, they have a fundamental economics issue around collateral, where if you have a stablecoin that is based on collateral, there is some opportunity cost associated with that collateral for locking it up to mint the stablecoin And the punch line is that that opportunity cost, if you have a collateralized stablecoin versus an uncorrelated stablecoin makes the interest rates on collateralized money is simply noncompetitive with interest rates on an collateralized money. And when you consider that today the majority of the economic activity is happening in an on collateralized money US dollars, it seems almost impossible to believe that an on chain collateralized money would be able to compete with off chain non collateralized money. And so bienstock again just it's been a little bit of a longer answer than perhaps originally intended or you had asked about. But the idea is Bienstock is designed to create low volatility money with competitive care and cost to current fiat currencies and any other currency that could exist. Okay, awesome. Good, good summary there. So I guess one of the first things I want to ask to kind of help give me some maybe context or sort of a frame going into this discussion. One of the reasons when I saw you guys I reached out and wanted to do with spaces is because I've always been pretty skeptical of like collateral backed stablecoins like I wouldn't call myself an economist or even like a mathematician, but something has just never sat right about that model with me as far as it just seeming capital inefficient, like you're using money to create money in a way it hasn't ever added up. I just can't totally put my finger on it. So I've always been really fascinated by alternatives like Luna and Usdc at the time, and then for the longest time still to now, like Ampleforth is one I keep my eye on and they're new like spot tokens. Very kind of open ended question But like what? What are your thoughts on Ampleforth or how does something like, like they're taking a totally different approach to Collateral back, but just some of what you were saying there and that description made me think like, oh, this is the language ampleforth people use. Like it's not necessarily a stablecoin it's low volatility money or yeah, have you guys like looked into them at all or been inspired or taken anything, or is it really just too fundamentally different to even kind of compare? Well, you can always compare and yeah, the, you know, the algo stablecoin space is a particularly the design space to date has been pretty limited. So yeah, there's definitely a lot to be said about comparing the Bienstock and Ampleforth models and Ampleforth has very much been a trailblazer in many regards and we actually had the, the great pleasure of meeting Brandon from Ampleforth recently and he was a wonderful person and oh cool, we, we got a chance to hear about what they've been up to and how they're thinking about things to a spot which we had not totally been up to speed on and this spot is a really compelling idea that you have the ability to effectively branch risk to create lower volatility tranches. And that as a concept makes a lot of sense. And one could imagine that like Button would try and change model as it's applied to creating low volatility assets in general could definitely be used in Defi. In a lot of ways this is a very compelling idea, but to get to the thing thing you were mentioning before around the inefficiency of collateral, the swap design presents a very open question of which, like one of the cool things about being in this space is the market will ultimately decide as to whether having a wrapper around an collateralized money such that it creates a lower volatility tranche of that collateralized money. Whether that is a better based version of a Yeah. Than something that is meant to just be lower like being volatility versus ampleforth volatility will be like buying volatility should be lower based on how the models work. But it's like while spot volatility may be lower than been volatility, but then what are the trade offs worth it? And you could take the spot Tron Tree model and roll that out on top of Beanstalk as well. Oh, how is that? How would the spot tranche being stock work compared to the spot tranche AMPLEFORTH Logical. Yeah. And so this is like, you know, as people get more jazzed about Stablecoins as sort of a valid intellectual pursuit and experiment which post the terra collapse has been a harder conversation for people to engage in, genuinely it seems. But it's like as more people try to start participating in a lot of these experiments. Yeah, those are the types of things that people will build these cool ideas and then the market will decide which has the most utility, if that makes sense. Yeah, no, that totally makes sense. I agree. Okay, cool. Let's, let's definitely like circle back to some of this actually, like particularly taking the spot model and applying it to being. But I think first I need a better understanding of being the stock itself. So coming back to the matter at hand, let's maybe just start with kind of like a history, because I'm kind of curious like some of the stuff I mentioned earlier. So like, I know there was an exploit at one point, but then someone mentioned recently that minting is currently turned off. I noticed you're very off, Peg right now, so maybe just kind of a quick run up for whatever you think's a major invented event and like important enough to touch on. But how have we gotten to where we are right now in the beanstalk lifecycle? All right. So we'll try to give a quick summary of the roller coaster that has been the past couple of years, but maybe just to quickly wrap up the the conversation about the collateralized wrapper around it and collateralized money, feel like that sort of like LAUSD on ether and you don't really get around the capital inefficiency associated with the lockup so it's unclear if the spot model will actually solve the capital. I'm actually problem I'm actually not super from what the I'm not familiar with the LAUSD model. Is it possible to get like a one or 2% of LAUSD is a make it like a makerdao fork that just uses ether so ether? Oh, I have heard of that. It's it's liquid protocol. So there's a yeah, it's a non collateralized based money which is ether that is then being wrapped permissionless to create, you know, a lower volatility tranche let's call it. And it's like the spot model probably works better on ether than the LAUSD model does, or maybe it does, but I think we're sort of comparing apples and oranges when it comes to collateralized wrappers versus the collateralized base money. So anyways, let's push that aside, as you suggested, but just wanted to tie a bow on that for completion and yeah, was a good, good rapper. Talk about the history. So we mentioned it briefly before, but we'll add some some some more hopefully helpful color here. So we probably just worked on Bienstock for about nine months, uh, in in secret effectively from November of 2020 to August of 2021 when we deployed Bienstock on Eve Main and over the next couple of weeks we basically tried to anonymously, without a network, get anyone on the internet who we could to look at the project. And it took a couple of weeks, but in September, so it's like five or six weeks after being deployed, the protocol went viral on crypto Twitter, and we still don't know exactly how that happened. It might have been like a tweet from this office or something. But the the point is that the being price went up to $4 and the market cap grew from a couple million up to like 40 million. And so let me jump in here. Apologies. So is being the actual stable token or is that something like a governance token? Okay. Interesting is the STABLECOIN and that went to $4, Correct. So there was so much demand and the supply was so small at the time because the being supply was only 100 when it was originally deployed and all been growth since then has been according to the algorithm. So it's like it starts at basically zero and it's growing. And as it's growing very slowly from zero, it suddenly goes viral on crypto Twitter and explodes and price goes up to $4 and then ensuing crashes to $0.24. And this was five, six weeks after the initial deployment and was the initial test, if you will, for the Bienstock model. And we have really talked about the model and how it is different than like other attempts at Algo Stables, which maybe we'll get to. But the point is this was the first big test for the model and it took over a month. But the protocol was able to over time return the being price from $0.24 to a dollar. And we can get into how all that works at some point. But we're just telling the history that was really like a 0 to 1 moment for being stock in many ways because now there was a community that had participated in this crazy pump and dump. Those that remained, had seen the thing go up and go down. And there was some community with faith in the model at that point. And and so when when was that like relative to now set about that was September and October of 2021. So about 18 months ago. Yep. And, and oh basically that was the, that was the starting point of a wild eight months where Beanstalk had a number of other cycles, each less volatile than the last in the grand scheme of things where around Thanksgiving the price went up again like above a dollar 50 I believe, and then back down to $0.80. There have been a couple oscillations since then, over month long periods of time, one of which, as you commented in work, commented about work the system is currently in at the moment is a period of downside volatility. But the point is that at a high level, this is not like the volatility itself is not the indication of a problem, it's the problem that has always been there that the system has to be able to solve, if that makes sense. So it's like each of these deep hacks, whether it's pop up or down, it's an open question as to how can the system respond. And so the first nine months history of Beanstalk stock from deployment until the exploit in April of 22 was a series of growth cycles and debt cycles, each of which lasted a couple of months. And over those couple of months, the system grew from a supply of 100 beans to a little over 100 million beans at the time of the exploit. And so as a and it is worth saying, like from the time until the model was deployed, until the exploit, there were a large variety of improvements to the protocol that were implemented by the Dow. So part of the rollercoaster of those nine months was that there would be an inefficiency discovered in the model and practice, and then there would be a plan to fix the inefficiency that would then get implemented and then voted on proposed voted on by the Dow, and then most of the time implemented. And so it was like a very radically quick paced period of experimentation, which culminated in getting to a point where the model was really, you know, firing on all cylinders, if you will, and the health of the system at the moment, the block before the exploit was by far the best state of the system up until that point. And then the okay, let's yeah, yeah. So let's take a pause before we get to the exploit. I think I think about now, I think we should actually dive into the actual system and then we can kind of keep going and I'll probably understand the exploit better then. So what might be the normal first question on another podcast interview? Let's just talk about like how being actually works, like how this system you keep referring to, the algorithm, etc.. Yeah, how it all functions. All right. So it'll be hard to cover all of it because it's not the simplest thing in the world. But we'll try to. We're happy to go as deep as you want, but we'll keep it high level stock. Cool. So beans are credit based money. Fundamentally, if you are using beans or holding beans, the assumption that you are making is that beanstalk as an issuer of the money will remain creditworthy. What that means is that Beanstalk will be able to borrow money from the open market in order to reduce the price volatility of beans. So if you think that at some point in the future, Beanstalk will be able to borrow money from the market to return the price to its peg, then you're sort of assuming that beanstalk is credit worthy and that credit worthiness is the fundamental thing that gives beans their value. Because when the bean price is too high, it's quite simple. Bean stock can just mint new beans and then distribute them, you know, as as defined by the algorithm, if you will. But then on the other hand, when the price is too low, beanstalk needs a way to decrease the supply of beans. And so the fundamental like the core peg maintenance piece of the puzzle is the ability for beanstalk to borrow beans from the market. So also it's almost similar to Ampleforth in that part of the like stabilization comes from not exactly rebasing in the way they do, but like in changing the amount of circulating bean, Correct. Yeah. The difference with Ampleforth on the rebase front is that if you're a user of a bean, you will never have that bean. It's not going to change. Yeah, but you can voluntarily elect to forfeit your beans by lending them to the system, which will then burn the beans in exchange for debt from beanstalk. And that debt pays some interest rate or multiple, which we call high specifics. But the point is not so much. My next question was actually going to be so let's dive into that that like lending and borrowing part. So the way you describe being is like at some point in the future, the beanstalk protocol or you're making the assumption that at some point in the future being stock protocol will be able to borrow money from the open market to back those beans or supply them or I'm not sure exactly. So let's just dive into that part. So like, what do you mean exactly by borrow money from the like, where's that money coming from? How does what does that mean exactly? So the simplest way to think about borrowing money is you're selling a debt, you're selling an asset. And the question is around the features of that asset and how they make it more or less likely for the market to be willing to buy that asset from you, if that makes sense. So if you want a map being stock to something like Terra, which it does generally map to the concept is the the lunar asset. In the case of that, that system was the thing that was being sold in order to provide value to the to the holders of the stablecoin in some capacity. Yeah. And like there's a lot of nuance differences between Luna and the debt of being stock, but you can think about it fundamentally as the system has to or maybe not has to. In being Stark's case, it actually doesn't have a hard peg promise. It doesn't have to sell the debt, which is very important. But the point is, in general, the system wants to sell some asset. What is the best price that the system can get for selling that asset? And the interesting thing is that particular only given the nature of like a bank run or a de peg, there's some concept of and you're doing it through a smart contract with the market. If the incentives created by the asset sale are not perfect, the market will eat up the asset, if that makes sense. And so the like. What happened with Terra in practice is that the structure of the sale of the asset that in practice was Luna was such that there was a tragedy of the commons to buy Luna at the moment that the system needed you to buy Luna. So it's like when there's a terror. Deepak the number one thing that Terra needs is for there to be demand for Luna. Like that's an asset that the system needs to liquidate. The fundamental value proposition is like or the assumption is there will be demand for Luna if that makes. Yeah, yeah. The whole thing was like if there are buyers for Luna, USD would hold this fact. That was the sort of in the same way it's like, well, if there is demand to buy being strong debt, then it will, it will stay. There will be the ability to create low volatility. And so it's a really important thing to get it right, which is beanstalk debt from what from being itself or are there other assets involved in that system? Yeah, this is where we're going. So the the this great so the, the, the fundamental thing to get into is the difference between something like equity and debt. So Luna as a token really matched to equity. So it's this fungible all equity token that is receiving some revenue in a network sort of like equity in a company and step totally separate from discussions around securities laws. The point is if if Microsoft which has the some of the most consistent revenues as a company had an outstanding stablecoin balance that was convertible to their equity of $10 trillion, you would still have the same run on the bank happen that happened with Terra because the the fungible equity token during the bank run, there is no bid for it. And that's because of the fungibility like at the margin during the bank run. There's like a question do you participate in the background or do you catch the knife? And fungibility basically creates this catching the knife problem where and there's also the like the future revenue expectations that make it very hard to price all of this. And so in practice, no one was willing to catch the knife. The the fundamental difference between equity and credit is that unlike equity, which cannot scale to trillions for the Microsoft, their credit actually scales infinite because the more credit that Bienstock pays back, the more creditworthy it becomes. And that is a positive feedback loop where the credit of the system can ultimately grow to trillions of dollars. But when it comes to catching the knife for creating incentives for the debt to catch the knife, there is actually another asset in the system called pods, which is the debt asset of bienstock. So mechanically, if you lend beans to be in stock, you receive pot and at some point in the future those pods then become redeemable for more beans. Now when it comes to trying to create the we can you literally just say that again, just the relationship but just yeah, literally repeat that lesson if you have beans, you can lend the beans to be in stock and you receive pods. At some point in the future, each pod will become redeemable for one bean inch. Okay. Okay. And that's where our new beans coming into existence come from. Well, well, you beans are minted based on demand for beans. So if the price of beans are too high, only then are beans minted. And then some of those newly minted beans are distributed to paying off debt. Oh, so, okay. So when new beans are minted, some are used to like mature those pods into beans, whereas others are used for or where do they go into the protocol itself. So there's this is where there's two halves of the protocol. So, so far been talking exclusively about the lending and the credit side of the protocol, which, which is where it gets. It's like beans get their fundamental value from, from a theoretical economics perspective, which you know, like a new audience feel like it's important to start from a like here is where the theoretical value for sure. And do you want to just say, we know we haven't really gotten into how the pod structure economically is better than the terra equity, but we can we can return to that. If you find it valuable, Don't want to just want to kind of say that we know we haven't answered that. So it's not to say like we don't have an answer, but happy to know where is. Yeah, this is a lot to take in. So it's kind of go with it as it comes from curious perspective. Just want to caveat like we you know, we're about to go in the direction of the silo, but you know, just want to say like there's a lot to be said about the economics of pods, which, yeah, you know, we're happy to do at some point. So anyways, the other half of the system is the silo which you can sort of think of as the bank of the system, which is the part of the system that goes through bankruptcy. And so like any stablecoin protocol can have a bank run the silo, you know, counterintuitively is like the bank layer that is introduced to create incentives to limit bankruptcy. So like the system itself has bank runs because it's a non collateralized money, the silo is the like what is what is a bank run in this case. Would that just be people selling being correct. Yeah. Like people getting out of the system quick. Yeah. Okay cool. Which has happened many times. You know, it's like the $4 to $0.24 drop was the most extreme, but there have been a number of. Yeah, mini runs. Okay. I want to let you just keep going, honestly, but just to make sure I'm following you up until this point, like the one sentence, like I'm trying to distill everything down is beans are almost Oh, I had it in my head a second ago. It's still it's still all the pieces are still kind of slowly falling together. It's something where if you if you buy into the system, if you purchase beans, you are incentivized to do so because you get more beans down the road through pot. I'm not necessarily asking the question. I'm kind of thinking out loud here because I am I'm now starting to really see the similarities to Terra. Different for sure, but I'm saying the yeah, the parallel, let's say the value proposition is that beans are better money to use than a, you know, bitcoin or ether or any other currency because it has low volatility and competitive carrying costs. Your point, people may want to use the currency because it's a great currency, but to sort of get to 0 to 1, to have the currency, you need the model itself to create endogenous value. So there's definitely some circularity in value to get the system started where the system has to be able to contain itself. So that like what that process you were describing of people wanting to buy beans to like have more beans in the future, you can think of that as like the bootstrapping phase where there's some set of early adopters where before there is real utility in the currency, recognize the potential for utility in the currency and want to, you know, take a chunk of that, you know, future system, let's call it. And that's the you know, that's where we're like that's why someone might want to get involved at this point is, you know, the potential for I mean, it's hard to see beans being, like super useful today, to be totally frank, just based on the state of Defi. And so it's like, well, why would someone want to buy debt from the system? Because they see the potential of it in the future. But we still haven't gotten to the silo, which is where, like most users would probably interact with the stock. You know, that's the poker. Cool. So yeah, go for it. Yeah. So the the other half of the system other than the the field, the credit facility where the lending happens is called the silo, which is the bank and users can deposit whitelisted tokens into the silo beans and various LP tokens that are being trade against that. They receive two additional tokens upon deposit into the silo. So if you deposit a being into the silo, you receive a stock and feeds stock is the governance token which entitles you to a vote in a system. And it's also the it also entitles you to a share of all future benefits. So and so I was going to ask I was going to ask earlier, actually. So are all of the beanstalk core contracts controlled by a DAO? That stock is a part of or the governance token for? Is that how it works? Correct. Okay. Which is to circle back on the exploit the that was ultimately how Beanstalk was attacked was that there was a 51% attack on stock. Oh, wow. That's that's interesting. We've recently had some similar exploits in the cosmos with Daos that came through such a simple sort of attack vector. Yeah, Call will definitely cover the exploit, but feel free to keep going on silos. So when when you deposit, you get stock and seize the stock entitles you to a vote on governance and a portion of all future benefits. So in the beans are minted, some go to paying off debt and some go to paying stockholders. And you can think of depositing in the silo as like a passive risk rate of return of the system or just for holding your at you're already holding beans, you're already holding the exposure to the system just for leaving your assets in the silo. You receive some yield. Now, why does Bean stock want you to leave your assets in the silo? It's again that the silo allows for the imposition of like anti-bank run incentives on top of this. So where does this come in? This is the seeds. So you receive stock and you receive seeds. When you deposit the seeds, yield more stock over time linearly and there is a rule that the silo enforces that when you withdraw from the silo, when you withdraw your deposit from the silo, you have to forfeit all of the stock and all of the seeds associated with that deposit. So you only get the stock for as long as you keep the underlying deposit in the system. And the fact that you get more stock over time creates opportunity cost in the form of the stock that you would have to forfeit for leaving and coming back. So in the moment of a bank run, when you're faced with this fundamental question of there's this risk to the system, do I leave and maybe come back later or do I stick it out and wait it out? And what the stock that has grown from the seeds does is create an opportunity cost associated with leaving and coming back. That can be like explicitly calculated economically such that like participating in a bank run or not, is something that you can calculate out for yourself. And therefore one cannot prevent a bank run. It creates a real efficiency around bank runs that it both like exacerbates them to happen quickly and limits the extent of them very much so. We're able to get into more of the like reasons, how the opportunity cost plays that out. But like this is the fundamental reason why the silo exists is to create this stickiness in the system. When the bank runs, which are inevitable, ultimately happen, That beanstalk can create some reason not to leave and come back. If that makes it okay. Yeah, definitely dig into that a little more real quick though. So one thing that you kind of lost me with is are pods different from seeds? And so I think I missed I missed what seeds are and how they fit in. So there's been pod so Bean, which is these stablecoin pods which are sort of a guarantee of beans in the future. Yeah. Stock which is the governance token and then seeds yield more stock over time. Oh, interesting. Is that sort of like but like most, most tokens that you stake in just crypto systems give you like more of them over time. Is that sort of your answer to that? Like since, you know, just being a DAO token doesn't inherently do that or is there kind of so, Oh no, I see it probably. I see it also plays into the only reason that it exists at all is to create opportunity cost like seeds you can really think of as an abstraction of like how much stock do you get for per season, per hour for having your assets deposited in the silo. So like seeds are an abstraction that helps you think about like earnings. Oh, interesting. How many seeds do I have or how much stock am I earning? But it's like the seeds themselves are an abstraction for growing stock. But what this might be a dumb question, but what if what if I like sold my seeds or sent them elsewhere like my other assets in the silo? Yeah, that's a great question. So currently, because this is technically complex to account for, yeah, there has yet to be a liquid seed implementation, so. Oh, we all stock and all seeds are linked to your deposit. It's like a default or soul bound in a way. Deposit bound, Yeah, deposit bound one. So you could. Yeah. This is one of the major upgrades that's being worked on over the next couple of quarters is going to be stock and seed liquidity separating out that deposit into three different assets. Interesting. Okay. To what benefits? More economic efficiency. But it's I feel it feels like stock and seed go absolutely hand in hand. Like it's almost like everything goes hand in hand. But what you want is liquidity at every layer of the system, because the more liquidity you have and the more ability for like independent actors in the in the if it's just sort of in a if it's just sort of an if seeds are sort of just a way to an abstraction of like you're growing everything until fraction being the size of beans or pods, like everything. This is like the cool thing about composable tech, like whether something is a tradable token or not is sort of like just so I guess better question the abstraction better question. Why separate that functionality? Why have both stock and seed when you could just make it so that when stock is deposited it, you get more of it over time? Like what? I think the reason for that choice, not just have a stock rebase. What do you mean? Well, you're saying like if you have stock, you get more stock over time. Yeah. Because that's essentially what does. Great question. Great question. Yeah. Yeah. So kind of like I'm thinking of I'm in the cosmos mindset, right? So all of our stuff is proof of stake. It's it's two functions combined into one token. I'm with you so this has to do with creating economics that do not overly they create the opportunity cost we're talking about without making it such that earlier entrances in the system are early. Entrants in the system have an unfair advantage over later entrance. So the issue is that you have stock yielding more stock that effectively becomes exponential growth on your stock, whereas what we want is linear growth in your stock. And so the reason for that is that I'd say that you came in a month ago and you've got X growth stocks, you've got some bonus, and now I come in, so you've got X bonus over me. After another month you will have two X and I will have one X. Yeah. So you're like over and then we'll go to three basic compounding like the relative advantage you have over me for starting earlier trends to zero over time. But individually we are all still faced with this opportunity cost. So but people still have the opportunity to kind of do that sort of compounding right. They could take or in the future when you add like liquidity pairs and make them liquid, people could take the stock that they get from holding seeds and like sell that to get more seed or just deposit or buy to get more. They can they can prioritize because when you think about it, it's even more complex. When you hold stock, you get paid more beans, right? When the beans are minted and when you get paid beans, those beans come with stock and seed. So there's an open question of like, should you hold stock or should you hold seeds? And the benefit of holding one or the other has to do with like from an efficient economics perspective, your estimation of the time over which the beans will be minted? Because if you think that the are going to get minted immediately, you want more stock. If you think that the seeds are going to be minted excuse me, the beans are going to minted over time. You want the seeds because then you'll get more stock that will then yield more beans. Yes. Okay. Okay. Gotcha. And so when my stock is in the silo, is that when I can use it to like vote, is the silo also a DAO or is it an either or thing? The silo is the Dow and like the stock, particularly since it's not currently liquid like only exists within the silo. Right. But even if it were a liquid like you can do whatever you want, you can still go stake your stock somewhere else, but immediately you would still at least, you know, one can assume you'd probably still have your governance. Right? Okay. Okay. Gotcha. Yeah. So it is a little bit different than Dao's. Like, I might think of them where you have to. Well, of course it is right now because it's just sort of lives wholly within the silo. Okay, cool. I'm more or less with you so far. So you deposit value in the silo and you get stock and seeds, you get to participate in the Dow, you get all this yield that is you know it's a little complex, but it's got this really elegant economics to it or what we what we hope are like in economics that create the right incentives around bank runs, if that makes sense. So you've got the just to summarize, you have the field, which is the lending facility, which creates like the the theoretical fundamental underlying driver of demand for beans and it's stability. And then you have the silo where everyone can take their beans and deposit them to like earn passive interest. And if we go back to, you know, you ask like what is beans at the beginning or what is being stock, The goal is to create a low volatility money with competitive carrying costs. So the low volatility really comes from the field fundamentally, and then the competitive carrying cost come from the ability to deposit. While you're holding the money, you're already taking the risk of holding exposure to being stock. You can then put your money into buying stock into the silo and earn the risk free interest rate, if that makes sense. So it's like it would be like if your dollars, your U.S. dollars came with the federal funds rate or something. Okay. I have. So I have to be honest, it's funny. This is completely different from what my guess or what I was expecting. Like when I saw Stablecoin backed by credit, I was thinking you guys might have built something off of like Mink Maker or are they or some like existing lending protocol where the the debt or the credit for certain assets was like backing. So this is definitely throwing me for a loop. But, but I'm getting a clearer picture. So maybe let's actually zoom out and kind of go back to the beginning now that I have a much better understanding honestly and just go back to like the kind of core question and you can answer this however you want. I think like I'll be more able to follow along. So if a new whether it's an investor or let's say a regulator comes to you and they're just like, So what is being backed by like why does being have a value? I think that's obviously the golden question of any stablecoin So let's just return to that question and try and walk me through that and I might jump in and like nit pick and stuff, but that's just how I'm going to figure this all out. Sure. So beans are worth whatever the market says. There were so yeah, what that means in practice is like whatever people want to buy and sell beans for really by whatever price they're willing to buy them for. You can think of as like the one way to to think about where does the value come from, all people willing to buy it at this price. It's got that value now. So why would anyone want to buy it at any price? Well, there's some like risk adjusted return that you can take for participating in the system based on your analysis of, you know, the likelihood of the beans supply increasing to a certain amount over a certain period of time. And that's where the value of a bean comes from. Okay. So then my, my, my follow up question there would be I don't understand how just assuming there will be more of something in the future gives it any value. I do follow you with like, you know, the only reason anything has any value obviously just comes from people buying it. You know, perfect example is tether. Nobody has any idea what backs it, where the dollars are, but so long as people are down to buy it for a dollar, it effectively is. So when you put it that way like it is stupid, simple as that. But like Beanstalk is a little more sophisticated. So the like logic train works as the beans have value. If people if there is demand for pods, pods have value, if there is some future demand for beans exceeding some amount because each pod becomes redeemable for a bean at an exact supply. So, you know, like this pod at this bean supply will become worth a bean. So the concept is the demand for pods comes from that calculation of like what is the time weighted likelihood or the likelihood over time of the bean supply reaching X and that is non-zero like it could be zero. But so and what it means for the system to go back. Right. But it's like that's the that is the dynamic like beans are valuable because there's demand for pods. Pods are valuable because there's potentially demand for beans. Beans are valuable because there's demand for pods. So it is very circular and it's important to acknowledge that. Yeah, because like I'm very much enjoying this combo and you seem super intelligent, but obviously that sounds super Ponzi ish like that, that just like a sort of circular like that, like so there's no the only four tokens or the only tokens involved in the beanstalk system are your own. There's no like real money coming in anywhere. Or did people have the liquidity, right? So there is you can deposit liquidity pool tokens in the silo. Or let me ask this actually, if I just as an outsider right now, if I want to get some beans, I assume a obviously I could buy it on like Uniswap, I assume right curve at the moment, but sure. Okay. Yeah. Or how how would I get them through like using the system that is, that is getting them through the system. The only way in is to buy them on the open market. Correct. You can't like take some asset to the protocol or the silo and do anything to get beans correct. This is actually one of the reasons why I like it. That actually kind of makes sense. Yeah, people have like a hard time with this, particularly like VCs where it's like, well, what? How do we. Yeah, because it's not even like you guys are the one selling them on curve. It's just it's just yeah, it's the system. It's literally the market, Right? The market. So this. Well, actually, no, here is a question. Does like go for does the beanstalk protocol itself actually participate in curve and lend or is it all your users? It's just users and they're not even are users buying stocks You. But it's just the protocol. That's what I mean. Yeah the protocol is totally neutral like it does. Okay. How did those people get beans in the first place that they bought? They bought them with the first one. But like, yeah, how do you you were minted when the protocol was deployed and just like airdropped or kept with the team and like then you sold them and it kind of grew from there. The Pugliese wallet deployed the contract, got the beans and then deployed the initial liquidity, so it matched the 100 beans with ether and deployed, oh, the system and everything has gone from there. Okay, okay. Yeah, that is a bit of a mind fuck, but I am following a one baby 0 to 1. So the All right. So literally, like with the way the system is designed, if yeah, if you guys hadn't manually given yourself those hundred initial beans and put them on the open market, it like couldn't have grown. It's a closed loop system outside of that one like starting point, right? Correct. That is the setup. Okay. From there everything blossomed so it was like that was answering 2100 beans and over the next nine months it grew to like, you know, $100 million, 107 million beans or something and like $77 million in liquidity. So it was like a $200 million inflow, if you will. Yeah, this one must be a real hard pitch to VCs, huh? Yeah, they don't like it. It's like, yeah, you can participate like everybody else. Welcome to the club. You know, like what? Interesting. Yeah, it's just like, it's making sense, But I also still absolutely don't understand it. Like, what's the guarantee that anyone would want to buy them in the future? Because saying the right thing to like, I can you could say that with anything. Technically. Yeah, but most things have a likelihood that they would because they provide some sort of like external value. But I guess in your case, I mean that value might be the utility of being stablecoin. Like if people simply want that to exist about enough, that is the incentive to keep the system going kind of total, totally correct. And it is a like it is a circular loop, it is a self fulfilling prophecy. But like that is what it means to create endogenous value. Like that is what it means to create something that is internally valuable in and of itself. Like Bitcoin makes the same assumption. The Bitcoin network is only secure if people hold value in bitcoin, which so does that also mean in way like outside of something like the stock exploit, which is just like kind of an almost simple 51% thing like is there no real way to financially attack being because like an outside megabyte you can buy a huge chunk in the system started gross cycle and then dump all of it and start a debt cycle. But that's all you can do. You can buy in. So okay, so what that would look like is I would just go to curve, I would get a shitload of being I would put those in a silo to get weight. Yes, yes, yes. Okay. To get like seed in stock. And then in the future, when I recruit a bunch of beings, you just pump the dump the price now up the systems printing all that stock will now yield you more beans and everyone else will get more beans to The point is, you then dump everything that you just bought and that money comes in, money goes out, price went up, price went down. And actually that happens all the time when all like that's the okay, that's, that's the thing happens. People come in, they leave, you know, depending on size there's a certain amount of volatility. But like that's the model that's okay. So I think so far we've kind of focused or at least that maybe it's just in my mind, a lot of these examples we've been talking through have been like sort of single events, like whether when you look at your chart, there's that one crazy spike, the drop, the return, this example we just went through. But can you maybe break down what's been going on like the past few months? Because when you look at your chart, it looks like just a slow trickle below, like a wave from $1 down to, I think in the 80% range right now. So like, I think it's like a house. And so there could be in the eighties is it my exact exact price doesn't actually matter right. In this case it's like well like yeah it's just a it's just and when you say that you mean right now, right. Like if the price stayed at in the eighties forever that would not be, that would actually well actually that would be fine because I would effectively be stable but you know, it could better best. It's like that's not really the goal. If you can keep the price at $0.80, it should be able to keep the price at a dollar. Yeah, Yeah. So it's like but okay, so yeah, so what's been going on the past couple of months And then also with that, walk me through like what the system is doing to try and like repackage. Yeah. So let's resume the timeline. So exploit happens in April perfect liquidity that is trading against billions is stolen. So the value of beans like the market price comes from the liquidity in the arms that it's trading against $77 million trading against beans and exploit that goes to zero. There's now no value trading against beans. The bean price goes to zero. So the beans are there's 100 million beans, they're all worthless. We go back to the fundamental assumption that a user of being stock is making is that the system is creditworthy. What does that mean? It means that the system is going to be able to borrow money from the market. So what is the natural response to, you know, the ultimate bank run, if you will? It's to issue debt to try to recapitalize the system. So it took about four months for stock to be turned back on and a like a recapitalization to be structured and agreed upon by the down implemented. But that's what happened in April. In August, actually, on the one year anniversary of the deployment of being stock being stock was turned back on. And while there was about $77 million of value stolen, only about 20% of it was originally recapitalized, which is good, not great. It was turned back on in August. There was initially a little bit of that money coming in and then money going out phenomenon and volatility. But basically the system has just been chilling out for the most part since then. There's some initial price discovery and movement of assets between parties after the system was turned back on in this price discovery. At this point, the system is sort of in an equilibrium state where there's no nothing really happening. And from a like demand changing or people pricing things changing. And so there is very little money coming in and very little money coming out and in a in a vacuum, you'd expect that the price to stay the same. But as you observed, the price has been coming down slightly. So there is the Dow has decided through governance to mint beans to fund development of beans stock. So being stocked farms is one of those organizations that has been funded by the Dow and the majority of like sell pressure over the past six months has come from people that have been paid in beans to work on beans that are liquidating a portion of those beans. And so it's like the system is generally in like an equilibrium equilibrium state, except for like there is some new, like marginal supply coming from the payment to contributors, which is getting sold. So that has resulted in the price coming down slightly. So I think what you've effectively done is like created a closed loop system that can only be as big as the net amount of money in versus money out, but at the same time doing it in a way so that when money, money goes in, it doesn't actually go into the system like it just goes into some private wallet to be used like wherever else. And the Etherium ecosystem, like, is that kind of an accurate assessment in my understanding? That's right. Well, I think because like so so that the price trickling down right now comes from the simple fact that there is more money leaving the system than coming in right now, which is just like how any closed loop system works. But what's the interesting part that took me a while to get my head around is for money to go into the system. Money doesn't actually go into the system like if I was selling. But it doesn't it doesn't go away because when you buy the beans with ether, let's call it, or three curves, you're like adding three curve to the system, to the liquidity pool. Yeah. Okay. Actually, I get the part I was maybe missing is you have to consider the curve pool as part of the core being system. Well, it's like so like this this is actually the thing you were saying around like taking it in a private wallet. Like you as a user still own your liquidity pool tokens, right? But like, those tokens are serving a communal value by providing when you need people to buy and sell the B. That's the part I think I was kind of missing, right? So like even though it is not part of your contracts when talking about the beans system, any LP pools you're part of in this case, just curve is like a fundamental part of that. So if you actually if you want to answer the question to someone who's like, where is the money in the system that's backing it, you can kind of just say in the curve, all people like that where you can tell, Yeah, okay, okay. I'm correct. But it's not backing it. It's more no backing it because it's not collateral that can be redeemed, but it's literally everything in the system. Yeah. Liquidity that's a better word. Yeah. It's like this is. Yeah. What can I get for it. Well what's the liquidity. Right. No redemption value. It's just a liquidation value and the liquidity comes from the amount. Okay, cool. Okay, so that makes sense. So to resume, maybe just to wrap up, like what's going on at the moment. So Bienstock is like up and running, but the on chain governance which was exploited, has been removed. Um, there are in addition to re-implementing on chain governance to get to like a fully permissionless system. Again, there are some additional economic improvements that can be made to the model. And you know, they're all of varying levels of complexity. And in terms of like economics and technical implementation. And so there's, you know, marginal benefits to each of them, some more beneficial than others. But the point is there's like a huge set of developers and community working on designing and implementing upgrades to Bienstock itself. And we as like the initial founders feel very lucky to get to participate with an incredible group and figuring a lot of that stuff out and implementing it, which is really been a rewarding thing for us. But at this point, like the scope of the work that the beanstalk community is engaged in has expanded dramatically because the integration of Beanstalk with with Defi such that beans can actually start to be used is going to be a pretty big project. And one of the reasons for that, maybe just to give one, is that Defi doesn't really support 1155 tokens and non fungibility of silo deposits and pods makes them you know they'll likely be implemented as 1150 fives and so in order to get you know bienstock assets to be tradable and borrowed well and defi there's a need to implement a lot of defi native or defi primitives that support 1155 natively. So a lot of there's a lot of cool development work happening on like a zero fee composable dex where you can compose like an arbitrary pricing function with an arbitrary on chain oracle, stuff like that. There's a lot of cool development happening not just on Beanstalk as an issue of money, but around Beanstalk that should be, you know, generally positive contributions to the, the even. Yeah, actually I noticed I think which one their bios was someone's bio on the beanstalk community. I was oh yeah Beanstalk farms working on Beanstalk money and EVM Pipeline. Yeah cool. Okay. Oh shit. What was I going to ask? Yeah, okay. So I had so like, I'm just on app, dot, dot money right now and like, I have a few questions just about what I'm seeing here. I think the first one would be and this could just be a simple like chart, just not set up right thing because like the liquidity chart basically looks like a flat line. Why does the like market cap chart look so different from the price chart? Like how is the market cap been dropping in the way that it looks like on on this graph here when the price has not been dropping? Same are there beans being destroyed? Like is the circulating amount of beans going down somehow? So let me try to pull up the. It could literally just be. Yeah, but the short answer is when beans are sown, they do actually they do give the market the market cap chart just looks very like choppy, like they're obviously big sell events or big events. But then, you know, the the price chart, for example, kind of a flat line, but it looks far smoother, like it's a smooth trend down. And so that makes me wonder about circulating supply. Yeah. The punchline is that I believe the jumps in market cap have come from some of those bips being stock improvement proposals that meant beans to fund development, for example. Okay. Yep. And so it's like if you if you normalize for that it would likely look a lot closer to the price line. Okay. Okay, cool. Yeah. I'm sorry. And then I think that's what that is. Yeah. I mean, it's hard to tell just because the the price chart and the liquidity chart, the y axis doesn't seem to like auto adjust. So they basically look like flat lines. So they could actually be similar and I just can't really see it. My second question just on here, though, is there a fifth token in the system or is this just like nomenclature for something when we say unripe beans, is that just sort of. Yeah, Yeah. So we we haven't even talked about the barn. So there's the field, the kind of, oh boy, the silo, which is the bank, and then the barn, which is the recapitalization facility. So we mentioned that there was this whole plan to recapitalize the system after the exploit. There was a new facility, which should be a hopefully a one time temporary recapitalization facility that actually has a number of additional assets to it that, you know, I'll throw out the names just for means, but we probably shouldn't get into it because it's only so substantive. There's fertilizer, there is sprouts, and then there is unripe deposits, I guess ripe assets underneath the deposits. So it's a little cockamamie, but it's okay. So I think one of the reasons that caught my eye, the biggest number here on the beans supply is Unripe Bean three Curve LP Token. Yeah. So like, do you want to try and break that down for me? Sure. So the like, let's look at these four numbers. There's yeah, we can take it. 5 million beans 26 and change million beans Recurve LP 76 million unripe beans and 119 million Unripe beans. Recurve LP The Unripe beans and Unripe LP. Basically math. Basically. This is imperfect, but it basically maps to the assets before the export. So there's about $200 million in market cap before the exploit there. There's about $200 million in unripe assets. So if you add a billion worth of value before the exploit, you've now got a billion worth of unripe assets. It may be being or being three of LP depending on what you held and what you've been doing since. But the point is that the unripe assets are tokens that represent ownership of beans before the exploit. So those unripe assets are entitled to buy some portion of the the assets that have been lent to bean stock to recapitalize the system. And so the unripe assets mark to some value that they can claim, which is as a function of the first two values, the amount of beans that currently exist and the beans recurve LP that currently exists. So if you look for when you say So it's like a temporary thing, right? This is not something that would exist if it weren't for the exploit. This isn't like a core part of the system long term. Got into something that you would expect around 2 billion or so for the system to effectively to, you know, to graduate. Actually, it's it's kind of interesting that you wouldn't have something like this had the exploit not happened because shouldn't you guys succeed in the long term? A you have this thing should ever should you know, this system should something ever happen again. But then B, obviously you've just proven that the system is resilient enough to withstand and exploit of that magnitude. Exactly. And this is actually the same counterintuitive logic that applies to right now. You know, it's like the system is at $0.92, which you described as like a way off peg, but it's like which is fair. It is true. It's way off, peg. But on the other hand, compared to $0.24, it's actually not way off, Peg, compared to $0.80 even. It's not that bad. And in the context of a split grant and this may be wrong, but grant that at some point the system starts churning again every second that it's spent here. Below Peg, for an extended period of time should be good data for people who have confidence in the system the next time around. Yeah, right. Like it is proven it can spend this long under peg and it's not and create inherently detrimental faith based system. It's a faith based system. So the idea that there is data that should lead reasonable people to have faith is like, you know, this is the it's counterintuitive, but it's like, yeah, not being perfect is actually what the system wants. And this is why maybe this sort of like wrap up the comparison with most other stables. It's like Beanstalk doesn't make any promise about the value of beans, whereas Tara made a promise about the value of USD. And like once you break the buck the first time and you have this promise, the model is always, yes, there is like this there becomes a way to fuck the model. It's like, Well, if you get to this point then you like it. It's a it's a selling point where after that, like everything collapses by by saying there is no promise about the bean price. The bean price can be anything. Bean stock, actually, if you're going to try to like attack the system takes away your biggest weapon. Right. Your biggest weapon is the Deepak. But in the case of Beanstalk, the Deepak Bug is par for the course, Peg. Unless you actually kill the system in the deep peg makes it even stronger. Next time and time. Yeah. Also, just to just to chime in real quick, the point per being supply at which beanstalk graduate from the barn is more like 500 million, not 2 billion. 2 billion would be if you if you sow beans and get pods of good jam now guys sorry for misspeaking that Yeah great shout call. So while I'm at it I have to run a 30 minute mark. Not sure about Poulos is available, but just just a heads up. But that's great. Yeah. I saw your message. Yeah, we can wrap up soonish here. Jimmy just laughed, which is funny. We just had someone requesting to speak to. It's usually just a massive troll. We honestly don't let him up often, but every now and then has some good questions. And I was going to let him up because I think he would have had insight. But I think I took too long and he figured I was just ignoring him. So that's too bad. Okay. Okay. Interesting. This is all like, this is one of those things where even though I kind of understand it now, like I could go give a simplified version of this to someone after this call if they wanted it's still just kind of fundamentally so different from existing systems that I'm very much second guessing, like, wait, okay, do I actually have my mind wrapped around it? It's it's definitely one of this is like actually for me, the example of the fascinating type of shit that you can do with like this distributed ledger tech, be it blockchain or whatever else. I don't even know how to quite put into words what I mean. But it's this weird abstraction of various values and functions and systems from traditional financial systems kind of put together in a way that I don't even think would be possible for someone to look down or put sit down and be like, Is this going to work long term or not? It kind of just needs to be tested and see, and I'm sure I'm pretty ignorant in saying that, but it's just really fascinating. Like this has been a really, really interesting call. Yeah, that's why we are comfortable working on this experiment that may fail. It's because, like fundamentally, the only way to even test the stuff is out. Like the theory only goes so far. These are behavioral systems. And to your point about like this is an implementation of like some of the crazy stuff you can create, you can think of it as like the product of appreciating the Etherium network as a blank canvas, like the yeah, we took it as a blank canvas to solve like a fundamental problem where you can encode whatever rules you can think of that solve the problem. And it's like there's a lot of big problems that need out of the outside of the box solutions today. Yeah, we we we recognize it's certainly outside of the box. Yeah this cannot be like the solution to the problem but really do feel like this this this is in the direction of yes at the very least it's a step it's a good word. Yeah that's and frankly like that's all we're just trying to take the next step and it's like hopefully we take the next step after that. And when we say we mean like collectively, we all everyone that's on the the Bienstock train at this point or a part of the Dow, however you want to think about it. Yeah, the goal is to like just make the next step and then we go from there because it's too it's too big of a problem to be like, Yeah, we're going to solve every single part of the problem right now. So I guess one of my last big questions would kind of be a more open ended like for the future one, I don't even know if it'd be possible, the exact current model, because the current pool is such a crucial part of the system. But like the way this is all set up is it's kind of taking the idea that I think Luna, like half embraced with the U.S. tea mechanic of as long as there's a buyer for something, it has value, just like as simple as that. Kind of like what I said about tether earlier, but it's just going going full force with that to kind of create almost like a pure form of money that that's driven and backed by. The only thing money's even used for the first place, buying and selling. And so it makes me wonder if you might want to expand in the future or alter rather to not be USD pegged to some kind of stable store of value, whatever that might mean, but that is just stable in its own right. And I don't know what that would look like, but like I know a lot of people have turned the discussion on recently about like, should we be pegging everything to the USD? It's certainly convenient, but does it actually offer the long term benefits we're looking for? Blah, blah, blah. What are your thoughts on that now? Like USD peg in general? So if you think about like Egypt being as a liability of the system, this goes back to like businesses wanting to denominate their loans and things that are inflationary or low volatility versus highly deflationary. Yeah, like in theory you could have a version of being stock pegged to bitcoin, but it's like that's going to be a way harder peg to keep than something inflationary, like the dollar. All right. Because of the way you work, you actually benefit from the thing that you're tracking being inflationary in a way at the margin, certainly. Yeah. It's like even if the model may be good enough to work for one like asset with a given rate of inflation, it may not work for another one that's highly deflationary like Bitcoin. And so given that this goes back to the experimentation that is happening in real time, there's an open question as to whether there will be in the future multiple beanstalk that each have a, you know, a an asset, a stablecoin that is pegged to some different index of value, right? It could be the CPI could be something better than the CPI, it could be Bitcoin, it could be a stock, it could be anything, or whether it's more likely the Bitcoin excuse me being stock moves in the direction of having beans that are pegged to dollars and the CPI and other stuff and it's all backed by, it's all kind of arbitrary in a way. Well, it's not just arbitrary. It's like whether or not like the system could in theory support an arbitrary peg. The question that's interest is will it be one credit, one version of Beanstalk that supports all the peg? Yeah. Or will it be end of multiple deployment support and credits or something in between, Right. Where some versions are being used for multiple, we don't know. So it really does feel like this is the beginning of an incredible of discovery around this. And, you know, to this point, we really don't feel like there's been a particularly since Terra collapsed ten months ago, there has not been a lot of discourse on any of this stuff. People are not participating in discussion. And so we really do want to do our part to, like, raise our voices a little bit more, such that people start resuming these conversations. Because as I'm sure you can tell, when you get into the weeds, there's some really interesting and meaningful intellectual questions to to like try to answer like this. Oh yeah, there's some like philosophical debate to be had here or just discuss a little bit and no one is doing it because, you know, it's scary. So and you know, and the last group that did it pretty well, blue Yeah, it's messed up. Yeah. Okay. Okay. So I have two last little technical questions and then we can just wrap up with a couple, like more fun or lighthearted ones mainly centered around that curve pool because now the, the full system kind of makes sense to me. The pictures coming together, what Curve Pool is being in and like I assume it's its own. What are the two other assets in it or one other three other or however many? It's just been, it's been three curve within a parameter of one. So I'm not I'm not super familiar with curve to know what that means. So does that mean the curve was a three curve is there's a three pool dai tether and USD C three curve is the LP token for that. Okay, so it's that for the matter pool. Yeah. Yep. Met a pool pair. Okay. Yeah. I'm familiar with like how curve works. Just not some of the terminology. Okay, cool. So then and then that pool, the three curve pool and beam pool does that. What is someone's incentive to take their beans and put it in that pool instead of, let's say, the silo? So there is a pool of centralized token in the silo and the this is how we get to like marginal incentives. The number of seeds that you receive depends on the token that you deposit the also, whereas right now and this actually this goes to like the system is d pegged right now because the incentives around beans versus LP is like not perfect, it's static and there's this inefficiency around facilitating conversions between LP and beans and one one future improvement to the system that has been much discussed is having variable seeds per BTB such that there can be some sort of like automatic monetary policy change. Or maybe this is not monetary policy, but some change in real time or close to real time in terms of seeds per PDB that should help contribute to peg maintenance by changing the marginal benefit of depositing a an LP token versus just a bean. Right. Okay. And so the LP pool itself doesn't have native and incentives, rather it's just that you can take the LP token and put it in the silo for correct. And in fact, you know, whereas providing curv LP like I guess you can technically get some curve rewards, the cost between the minute minimal, the fee is not worth it to be in stuck because the to trade creates this inefficiency around the peg. So the bienstock dex that is being developed doesn't have a fee. So hopefully soon there will be zero fee trading in beans. There's no spread by the AMA. Okay. Okay. Gotcha. So then I guess my last question would be actually, I guess it's kind of a two and one. So a what I'm about to ask and kind of talk through and you can jump in and correct me whenever is how someone might like set themself up and get into the system, the steps they would take. But then to I guess the like bonus question wrapped in as I would probably just go buy some beans for the for the hell of it after this. I think it's interesting enough probably wouldn't be a ton at first. I would do the whole system more about it, go through if it wasn't on a Etherium. Do you guys have any plans to go to a cheaper, faster chain in the future or even just like one of the authors of Etherium or I just don't use Etherium anymore? Yeah, that's a great question. So the punch line is the goal is to facilitate the access to the economics of being stuck everywhere. One, minimizing the compromise in censorship resistance of the base layer, issues of money. And if you think about where the Etherium roadmap is going in terms of becoming more of a data availability layer that is settled to one can imagine Beanstalk ultimately settling to May net or the data availability layer, but ultimately having the majority of transactions that are processing and stock assets happening in one or more roll ups. And then there's a like a separate question as to how to bridge those those assets across other networks. And I'm also just trying to figure out, like in your current setup, I feel like cross-chain, like bridging stuff wouldn't work because like, let's say we wanted to get being in the cosmos here, you would basically have to bridge over a bunch of been through one of our axis, our bridges and like set up a liquidity pool on osmosis, let's say, which is one of the dexs here. But like why would you ever want to do that? Because it's not the curve pool, it's not efficient. You can't take that LP token and go like and also it's just the exact is it buy it? Could someone go just open up a bean pool on Uniswap? There's nothing stopping someone from doing so, right? Correct. Anyone can always deploy a pool, but there's a question of will that pool be whitelisted for deposit in the silo by the Dow? Oh, so that would be maybe the missing piece, Like if we were to do something like that example. Basically you would whitelist the osmosis LP token through the Bridge of Choice to work with the silo. Correct. In the theoretically could do okay to bridge the beans, add the LP, bridge the LP back, and then deposit the LP like things like that can start to happen. But. But why not just do like a whole new deployment maybe for each chain is that. Well, this is the issue if you have a whole new deployment you are likely splitting the credit. Yeah. Of the system. And so like these are the fundamental economics questions. It's like, well, do you just deploy, you know, a due to poor separate versions, do you spend the time to try to integrate the versions across all the environments? You know, it's probably going to end up being that, you know, some groups doing one and some groups doing the other. How familiar are you with IBC? And then I'm not familiar with this next one, but like the way polkadot and or avalanche like sub things work, the reason I ask is because like here in the cosmos are chains aren't connected with bridges, so to speak, as the bridges are built into the chain at a base level. And so what's starting to roll out now is like actual smart contract cross communication between chains. So like, let's pretend Etherium was a Cosmos chain or let's just pretend we're two years in the future and Etherium is turned on IBC, which there are teams working to do in theory, then you could still have that all be automated and decentralized and like not have to trust the bridge because your deployment on osmosis could just easily talk to the main silo, even if that's on a different chain. Are you kind of like a at all aware about that stuff in? Cosmos or be explored like Polkadot and Avalanche has other potential options for that sort of setup. Or maybe I'm totally missing something. But yeah, we were in the process of really trying to do our homework to figure out like what the 3 to 5 year integration with all the networks and rollups looks like, I would say that thus far the thing that stands out as the most compelling direction to take here is around shared security and have found a lot of the work that eigen layer to be incredibly compelling. Because ultimately, I mean, here's where we see this going. The goal is to facilitate real economic activity in any cryptocurrency. If beans are the best cryptocurrency, maybe the economic activity will happen in beans. But You can't have real economic activity in beans only. You have to have the ability for economic activity to happen in a permission. The static way. I have to build off that point real quick. So it's like just saying, you know, maybe it won't happen in beans. What Is the deal with the name choice for something that hopes to be taken very seriously in big one day? And is it at all paying homage to like the first pseudo cryptocurrency beans like that came before Bitcoin? I think it is just like some company ran it, you know about that. Is this related at all for the first time hearing about that? Yeah. So I just look up like beans, internet money. It's just some like it wasn't decentralized, it wasn't on a blockchain, but it basically functions like bitcoin, something some like company ran, some reddit precursor or something. I forget exactly. But yeah, what's up with the name? Like, I like it. I kind of like the whole barn stock thing. It even sort works in a way. Like when I think of seeds or growth. Come on, don't sell a short. It's pretty good. It's pretty good. No, it's actually very good. Yeah. No, it is. So, so the the reality is that, like, at this point, it's very easy to explain how like, nice the memes work and like meaning for the meme has been to creating a great community and like, it'd be great to like be able to say like, oh in advance. Like we, we really wanted the means to be a plus and we knew that would be essential. I think they would probably be giving us too much of the benefit of the doubt. You know, where does the name being store come from? Sort of unclear. In fact, the moment where the name you're sitting down trying to write the white paper at the moment. Beanstalk came into my mind. I literally thought like, people are going to want to know why been started and we're not going to have a good answer. But like, that was just the one who came off. And what the hell does dollar mean, right? Like, I know what that's like, but it's all just a word. As we started to go through and design the system we face, like despondent issue around, there are all these new assets. Talk about blank canvas. They're these new primitives being created that don't exactly map to a bond, don't exactly map to equity, don't exactly back to like what is a seed. Right. So the concept is it really as we started to fill in the words and need and fill them in with these like farm theme terminology. It started to create this whole like a larger story that very clearly, once you like, internalize the names, help you deeply understand what is going on, and that they do incredibly valuable when it comes to creating a sticky community. So harder to say like where what it really comes from. I mean, I do like the idea of like describe how spending beans Oh yeah. How many beans did that cost? Like that rolls off. Yeah. No there's a reason that this like other thing I mentioned pick beans There is some weird Yeah it must be some piece of No it must be some piece of history we all have heard about once or whatever where like we're being used as money at some point, like there is some connection there. I don't know why it does seem fundamental, right? Like it's. Yeah, I can't go down the troll and this is kind of the thing. Like it just works it really did just work. Oh, by the way, the thing I was thinking of, if you wanna look it up, it's B and Z beans. All right. Might be interesting history to dig into there, but. Okay, cool. So let's circle back to my last technical question that I diverted from. So I think I might actually got some being like, fuck it, I'll, I'll put some money on the theory just because it's interesting enough, assuming the fees don't piss me off too bad when I see that metamask pop up. But so tell me, just jump in here at any point if you want to correct me. But here's what I would do just based off our conversation. So like, let's see if I have a good understanding, I would go to curve. I would Well, no, first I would acquire some three pool LP, token curve three for LP through just whatever market I could get that on. I would use that to buy some beans. I would then take those beans and put them in the liquidity pool again, I would match it with them some three curve, just tell you and you could just simplify that by to just like the value to the three curve pool and getting the in automatic buying and adding. But yes, the point is acquire the LP token with value and then deposit it. Okay, cool. Yeah. The only reason I didn't say that is because before I thought through it, I was going to take the beans over to the silo, but no, first I'll actually use the beans and LP pool. Take the new LP token which represents beans and the three curve LP pool token to the silo. Deposit it there where I will then get seeds and stock. At that point, am I kind of just in like a hold and wait phase? Or is there something for me to do with those passive? It's, it's okay. So yeah, just a caveat. Like there is a like micro farming in the silo you can make because of the basically because of gas reasons, not all of the interest is auto compounding. So there's some things that you have to pay gas to start to compound, but it's like now we're getting into the super, super micro optimization. Yeah. Okay. Yield farming. Okay, cool. But no, that's, that's, that's like a good sort of. And then so let's say, is that what you would recommend doing just like as, as a user or would you recommend rather taking the beans and bringing them to the silo, like maybe break down the difference there for me. Yeah. So we don't, you know, make recommendations. Well, no, I'm asking you not as a project person. Yeah, full, full disclosure. No worries. It's like a we, we what, what we try to do is comment on like being, you know, we can speak to like here are the incentives that exist. Yeah. Total point is that like Beanstalk will pay you a premium to deposit LP tokens over beans. So if you are going to be in the silo, there are some marginal, you know, return that you would have to forfeit for depositing beans instead of LP tokens. Now you may decide for whatever reason you want the bean exposure and not the three curve exposure, but it's like, Oh, that's okay. So I was just about to ask, why is that even an option? Why not just disable depositing regular being to the silo? But is that maybe the answer that you want people to at least have option if they maybe don't trust the other stables and. Yeah. And it's like for money, like you have to but then wait if that if that token fails isn't being followed. So this is actually why having a diverse set of assets that beans trade against is like very, very, very important and okay, the like. Now we're going to go on a slightly different tangent, but the issue, the reason why there's not a lot of liquidity or different assets trading in speed right now is in the post merge environment, there's multi block movie and all of the on chain oracles in the curve and uniswap basically are not multi block amoebae resistant. And so there's this sort of like janky patchwork solution on the bean three curve oracle for now but there's been a ton of work happening on this Dex that has an on chain multi block media resistant oracle that will once that is in its currently under audit once that is deployed you can expect like a being Ethe pool and maybe a bunch of other pools as well. Okay I gotcha. So risk somewhat centralization of exposure risk in the oracles. So in some way actually having everything relying that one LP pool is a kind of temporary weak point like that's something you hope to to grow away from. That makes sense. Okay. Okay, cool. And imagine a future version of the seed gauge system that's changing the seeds per PDB to factor in things like aggregate exposure to a single token, to a single custodian to a single asset issuer like risk management can be encoded at the protocol level. Yeah, you know, it's crazy for the first maybe like 20 minutes of our convo, I was growing a little skeptical because I'm a huge believer just because you're one of the founding developers. I'm a huge believer in the whole like if you can't explain it simply, you either don't understand it enough or it's a scam. But now kind of getting into everything, you kind of can't explain this one simply because it really is a it's something that hasn't been possible or existed before until like we've had this sort of decentralized infrastructure to do it. Yeah, Yeah. I think that yeah, we appreciate you saying that because yeah, it's as simple as humanly possible. Like we really believe there's no. But it's also not here. It's funny. Like it's, it's as simple as it could be and no more complicated, but at the same time it's really fucking complicated and we acknowledge that. So yeah, I think honestly, sometimes the complexity of existing systems might be lost on us because the norm, like it's not like traditional financial systems are simple and straightforward. Things like the current financial system is way more complicated. Yeah. Oh you stuff is like the reduction of like 100 layers of finance into one or two. So if I were this is just me sort of like thinking out loud. Now, I think we're definitely getting towards wrapping up. But if I were like in your shoes, I would feel like one of my priorities or even just as like a potential about to be investor would be making the second LP pool that is like whitelisted the silo being one against blue chip non stable assets because it's kind of interesting doing a like yes I think the number one criticism of DI for a while right was that it's just wrapped usdc. We have a stablecoin here in the cosmos which is like 80% backed by Usdc, Usdc and Dai. It's like what is the point there? And in some way your system currently actually has the same issue like it is reliant on other Stablecoins succeeding. So what's your sort of plan moving to other staples? It's just other value on chain. So interestingly now we know wouldn't it be Dai Usdc and Usdc? Because if something happens to one of those and the Curve three pull gets in trouble, then some of the other pools, hopefully it's going to be trading against ether and BTC and a bunch of others. Yeah. Okay. Got, yeah. So that's what I was saying. That's like that's probably the next move is a non stable LP pool that should be a beneath pool God willing, before the end of Q2. Okay. Okay, cool. Very cool. Sweet. Okay, so there is some more stuff I could maybe dig into, but I think like this is probably a good place to wrap it up. We're going on 2 hours. I feel like I understand being enough where I might go through a couple of dollars of it, which is saying a lot given the complexity, not even complexity. I get what you mean. It's as simple as possible. It's complex. Probably isn't the right word, just like fundamentally different. So you kind of need to approach it and think about it differently. Um, and also throw do definitely different. I'll throw a fun question out to maybe end it on what's with the lobbying and fees give me the inside scoop there. I see a bunch of beans in the audience. Yes. So they're the BNF. TS were originally an idea to try to like facilitate some sort of like community when the price was collapsing from $4 to $0.24 and it was like sort of a you know, I think it speaks to like how bad the protocol was that it's an economics protocol. It was like, what's the best thing to do here? Like maybe make some papers like kind of ridiculous. Yeah, but on the other hand, going back to, like, the this is fundamentally a social phenomenon and a based system like the Peas were, it were amazing because like, the way to get the PMP was to participate in the re peg. That actually worked pretty well and that created like a culture or there were different tiers of being a tease. Hold on. I really don't mean to interrupt, but I don't want to lose this thought. You just for some reason saying faith based system there kind of just gave me a revelation moment where I somewhat just became a bit of a being bull, actually, I think because like the thing I was skeptical almost up until just a second ago or rather couldn't get my head around, I don't know, skeptical. It's like the whole it's really going all in on the faith. That's what's backing is that someone will buy being in the future and that they'll have something to it. But like I'm just realizing that is literally all it any money. It's like I gave it tether example earlier, which was kind of limited because tether obviously runs on that, but so does the actual US dollar. Like it is purely just that because of U.S. military and economic standing that you have faith that dollar has value like there is nothing else to anymore. There's no gold standard. So we're bitcoin ether or any other money like this. You guys have money? Yes, exactly. Taken the fundamental principle of money, which is that someone is willing to transact in it and you have somehow turned that into the thing that backs it and gives it value and utility in the first place. That's why it's so mind fuck. But now that picture is getting kind of clear and I'm liking this. Sorry, I'm starting to get that thought out. Does that. Yeah, that. Yeah. I think we've gotten somewhere here, brother. Yeah. Fun stuff. Very cool. One thing. I'll definitely say a good move on the NFT though, I think like because it's a faith based system that actually probably was like a tactical business decision in what and they're pretty cool. I love anything that's not pixelated or a monkey these days, so but yeah, if you guys ever want to explore or expand into Cosmos or anything like that, like let me know whether it's this account or the Tendermint. Timi one Cosmos people are skeptical because they're not dummies. Like a lot of crypto, there's not as many details here, but they're also super willing to explore new ideas and support projects that have like, you know, real meat to them. So like very open invitation. I would love, given the lunar history, some cosmonauts actually might be a little bit extra skeptical, but I think it'd be super interesting to see some more experimentation like this on our tech not to like shill all, but just pretty much in every single way except for amount of documentation and other people using it. Cosmos Tech is better than Etherium and you can probably say the same for like Avalanche and Polkadot and such. But now that I'm a fan, just open invitation. If you guys ever want to explore Cosmos, let me know. I'll connect you with some people. We'll see what we can do. Thank you. Really appreciate that. That being said, has there been any internal discussion, maybe a little alpha of like where outside of a theory you might explore first, even if it's still a little ways off? Yeah, there's probably going to going back to the desire to create and like real economic activity, there are a lot of fundamental problems with the EVM and any sort of natural virtual machine to facilitate real economic activity. We can get into maybe another time to some of the technical reasons why that is. But the point is that there will ultimately to be a lot of work on a custom VM. And you know that that obviously immediately like IBC enters the question at that point like where right how does how does that factor in that very everything. Yeah so once you start talking about modular blockchains, you know you have to have the conversation and that's like that's, yeah, that's where we're at the discussion, the thoughts are happening and the research is taking place and you know, at some point, so I'll say about it. Let me ask you this. What I'm not a developer. I'm more of a sort of ideas guy like project manager, marketer, but I'm I'm somewhat tempted to like to one of my friends and say like, Hey, can we launch this beam thing on most real quick and just see what happens? How would you guys feel about that? Yeah, what a great question. Like, not with any serious intent, almost purely a test, but also if it were to grow and, you know, be a thing, we wouldn't try and stop it, you know? Yeah I mean, the the only thing I would say about that is like, given how obvious it is to us, that there are further economic improvements to be made to the protocol, like there's there's an open like in its current state, if no one is going to update, not if you're just going to put it out there, why are you doing that? Yet on the other hand, like it would still be good data or it's all good data. And so I am more thinking of it in that light. Like I'm sure it wouldn't succeed because, you know, we keep up with it. It would cost people money is the thing, right? Yeah. So it's like on the one hand, if you really opt into like this is the Wild West, everyone is like free to do whatever they want. And there's just like, you know, the website will say like, disclaimer, this is a great I get what you mean. Like, maybe that's okay. But on the other hand, like that probably does take away from where we're going, which is really intellectually serious way of doing this. But like the concept of, you know, dissuading anyone from forking Beanstalk is like pretty ridiculous given like the nature of the environment that we exist in. And yeah, we really think the beanstalk model is the furthest along in this, like creating a low volatility money game or puzzle if you want to say. And so the idea that people are going to fork it is somewhat obvious like this is the latest. So of course it's going to get forked. So it's like, you know, we would view that as, you know, some sort of acknowledgment of that concept, that beans are beanstalk is at the forefront of this thing. Okay, cool. So maybe maybe this will be the closing question here. Might seem a little harsh, but like, I don't mean it that way whatsoever, given that that's how you feel about the tech, why do you feel being a so like small and unknown? Is it that the exploit really set you back? Is that just that you haven't done much marketing? Is that just like personal opinion? Why do you feel like I never heard of being until I don't even know how I heard of it recently? Honestly, I think it was like being bulk. Some dude with like a green, a bull. I don't know. But I think I was following him for some reason and I saw something. But yeah. What what do you think? Being kind of struggling to gain attention? Or maybe it's not maybe and maybe in your perspective, it actually has been kind of gaining users and traction like the rate you expected, which is also definitely hasn't post turning being turned back on post replant, if you will, in August. There's been almost no uptake or adoption and I mean totally speculating here, but I would guess that like a lot of people are scared. They don't understand the collapse last time and they don't, you know, they're not so eager to jump back in. It's funny, too, like fear often comes from ignorance, right? Just like with something that's kind of hard to wrap your head around with this, like, point in the middle. Yeah. In the middle of our conversation. And at one point I was like, sounds kind of Ponzi as to be honest. Like, and like, yeah, it does, unless you really think about it. And it's hard to relate exactly stuff, which by the way, you taking the time, it still is like, yeah, you need more people to buy it in the future. So there's some greater fool element of it. There's not a I think Ponzi is probably not the right word, but there's definitely like that future demand element a greater fool. But yeah, I think you can say that about anything too. Like even the US caller you can say, or just to replace the word buyer with people being born in the country, right. Using it like, sure, something like that. Totally crap. Okay, man. Well, this is really awesome. Are you, are you yourself like, I know you said three people are kind of pew pew pew pew public. How do you pronounce it? We know you said this last call. Are you sort of the like face and vocal person? Are the other people known in the community or. I do most of the talking. I'm also not a dev. So one of the other ones is like a world class developer and he does a lot of the technical jargon and yeah, the three of us sort of roll, you know, pretty, pretty tight. So the other two are just waiting for, for me to come so we can go get some dinner. Well I'll let you get to them then in that case. And this has been awesome, it's been like 2 hours of pretty deep, deep convo. I'm actually pretty surprised at our turnout tonight. Like last week, we had 100 people and I thought with the recent U.S., DC, you know, happenings that this was going to be a really popular space. But terror spaces you might have seen here has been recording like catalog categorizes and catalogs, everything. A lot of people will probably listen to this after the fact. And honestly, I'd love to maybe another space a couple of months in the future and see if we can't get a better audience. Might spend an unlucky turnout tonight, but I think it's really interesting. I'd love to. I'll personally keep tabs on you guys, but yeah, really open offer. Like if you ever want to explore Cosmos or do anything, let me know because I'd love to. Honestly, at this point I'm already sold enough where I kind of want to see the invasion succeed. So you've made up being alt ally tonight. Thank you, sir. It's. Yeah, we're. We're just doing our our, you know, doing our best here. So thank you very much. And I love that this has been a wonderful, a wonderful spaces, sir. So thank you for the hospitality. Absolutely Appreciate you join in and sitting through some of my questions. If I if I get the time, I honestly might test myself and my understanding by doing a little like thread right up. That will also serve as a cool summary for everyone who doesn't want to sit through this to our space, but might be curious. So really appreciate the time here. Thank Guy for. I know he didn't contribute too much, but just for making the time to be here. And yeah, best of luck to what you guys are doing. I'm probably going to go pick up a couple being just for the hell of it. All right, sir. Talk soon. All right, everybody else, have a great night. Thanks for joining. Catch us. Next week, we're going to be chatting with Leaf Wallet same day, different time, I think. So Just stay tuned for the announcement on that and all the been people. I think those three or four are you left in here. Check out the cosmos, hang around. You might like what you see. I think building bridges between communities is the way to grow in Web3. So have a good night everyone. Terrace, as always, appreciate your recording. We'll keep.