• Recordings
• Notes
• Quick Summary (can use as Spotify Description)
• Announcements and Updates
• Q&A
• What causes the cyclical nature of Beanstalk?
• What is Publius’s philosophy on what is a sustainable level of debt?
• What do you think of a weather-reducing function that only kicks in when we are out of soil for 2 consecutive seasons?
• How might gas fees be affecting the demand for soil calculation and thus the weather? If soil is super low, the gas fee may make people not want to take the soil because they would be paying gas to get such a small amount of soil (e.g. pay $70 in gas to get 50 soil because there’s only 50 soil available)
• Should we still be increasing weather when soil is scarce and we have such high debt and p>1?
• What does Publius think about the breakdown of beans between circulating beans, siloed beans, and beans in field?
• Publius’s thoughts on the Polymarket fine? (Polymarket is a prediction market that just got fined)
• What does Publius think about the recent rally in Beanstalk? What should it be attributed to?
• What does Publius think about the Congressional hearing today where politicians said stablecoin issuers should be FDIC insured with banking licenses?
• Is there potential for Beanstalk to change its reference peg from 1 USD to something else?
• Do you see a scenario where there is less than 1 billion $BEAN on the market by the time this debt cycle completes and what initiatives are being worked on / what will be the key drivers for ~1b $BEAN demand within the ecosystem?
• Does Beanstalk have/need a marketmaker or group of marketmakers that are/will support the peg?
• Can the farmers market become an extension of the field in terms of supporting the peg since you already need to purchase beans to buy pods. Would it be a “tax” if the system charged a % of beans on each farmers market transaction that would be burned? This burning help with peg maintenance.
• Transcript

Recordings

Notes

Quick Summary (can use as Spotify Description)

• In this edition of Beanstalk A&T, we cover topics like:
• The cyclical nature of Beanstalk
• What is the right amount of debt?
• Musings on how to best adjust weather
• How we will reach 1 billion beans
• A potential Beanstalk DEX with 0 fees
• and more...

Announcements and Updates

• We’re now over 6 months from deployment! Very exciting milestone
• ETH Denver is Feb 11-20, if you’re going and willing to help distribute Beanstalk stickers, please let @Dumpling know!

Q&A

What causes the cyclical nature of Beanstalk?

• It’s behavioral economics — when people see Bean printing and p>1, people think it’s working and so they get in. In the opposite case, when people see p<1, less people get in. This causes cyclicality

What is Publius’s philosophy on what is a sustainable level of debt?

• Ideal equilibrium is defined as debt = 15% of BEAN supply while TWAP = 1. This is a robust state where Beanstalk can easily recover from any price shocks (like the original shock when Bean price went to $0.24 but it recovered). The protocol is working towards this.
• A “sustainable level of debt” is an impossible question to answer because it’s binary — either Beanstalk attracts creditors or it doesn’t. That’s what tells you if the debt level is sustainable or not
• Currently, the debt level is around 1500%, we do want to deleverage from this. As Beanstalk “builds up its credit” and its reputation, maybe one day this having happened in the past will make it much more attractive for people to want to come in when the debt level, is, say 500%
• With the recent soil adjustments, if Bean supply increases by 100% in a short period of time, like it did in the growth cycle last November, this would lead to a halving of the pod rate (i.e. debt level)
• A short-term growth cycle would kick off a bigger deleveraging
• Bean holding its peg more and more consistently bolds well for the debt level to decrease

What do you think of a weather-reducing function that only kicks in when we are out of soil for 2 consecutive seasons?

• In theory, there’s nothing wrong with this idea, the team has thought about this a lot
• But just need to ensure this is a period of real excess demand for soil, and you’d want to move the weather quick enough such that you can accurately measure demand for soil and potentially move weather down again in quick succession if there is still an excess
• Is there a need to measure demand for soil when it’s clear soil is being gobbled up?
• Yes — the key is to see how the weather change impacted the demand for soil. Only then can you figure out whether the change in weather was too much or too little
• Would be inclined to have weather changes be in fixed amounts

How might gas fees be affecting the demand for soil calculation and thus the weather? If soil is super low, the gas fee may make people not want to take the soil because they would be paying gas to get such a small amount of soil (e.g. pay $70 in gas to get 50 soil because there’s only 50 soil available)

• It’s reasonable that when soil is very low, the gas fee may make people not want to take the soil because they would be paying gas to get such a small amount of soil. This is just a scale problem, as Beanstalk grows, this should become less of a problem
• However, the fundraiser provides a temporary workaround because you can sow through that without having to consume soil

Should we still be increasing weather when soil is scarce and we have such high debt and p>1?

• We could think about changing this in a BIP. The most quick fix is basically changing the following chart in the whitepaper. In the top right of the top chart below (in coordinate (2,-1)) you can see a 1 where the rest of the row is 0. We could change that 1 to a 0 to implement this suggestion.

• We could also play with a concept where the weather changes differently once soil is below a certain amount (aka soil is scarce)

What does Publius think about the breakdown of beans between circulating beans, siloed beans, and beans in field?

• Beanstalk doesn’t really care about the distribution of beans
• Circulating beans % should expand as the ecosystem expands from just having the silo being one of the only sources of alpha

Publius’s thoughts on the Polymarket fine? (Polymarket is a prediction market that just got fined)

• Polymarket case shows the bigger opportunity at play for Beanstalk — it’s very clear that federal government is not playing ball at the moment with cryptocurrencies
• By using a decentralized stablecoin, crypto and defi can avoid the regulatory risks of using a centralized stablecoin or currency

What does Publius think about the recent rally in Beanstalk? What should it be attributed to?

• With the Curve pool, Beanstalk is less dependent on ETH price, so the ETH rally doesn’t fully explain the Beanstalk rally
• It’s a combination of the ETH strength + many network effects and great developments in the Beanstalk ecosystem

What does Publius think about the Congressional hearing today where politicians said stablecoin issuers should be FDIC insured with banking licenses?

• Do Kwon once made a great comment that went something like “he’s not so concerned about the regulators because that’s the attitude that any decentralized protocol that’s serious needs to have”
• Decentralization will make Beanstalk last in the long run

Is there potential for Beanstalk to change its reference peg from 1 USD to something else?

• Beanstalk can issue tokens pegged to arbitrary values — it’s all about if there will be actual demand for those specific pegs
• Start with the dollar first because that is what people are demanding most
• What does Publius think about the Pod Marketplace launch? Expectations vs reality
• Impressed by the amount of listings, though the prices seem a little bit high
• Amount of orders was more in line with expectations (didn’t expect that too much liquidity early on)

Do you see a scenario where there is less than 1 billion $BEAN on the market by the time this debt cycle completes and what initiatives are being worked on / what will be the key drivers for ~1b $BEAN demand within the ecosystem?

• Publius guesses that a billion beans would probably get the debt level to the low hundreds
• The special thing is that you don’t need $1bn to mint a billion beans. You just need to create supply while people don’t sell
• Some initiatives/drivers currently being worked on that will power our way to billion beans:
• Having Silo accept different LP tokens and allowing it to more easily integrate with other protocols
• Integrating Bean:3CRV pool into the oracle in the minting schedule to increase the rate at which Beans can print given a similar amount of demand
• Stalk and seeds becoming liquid and creating a wide variety of opportunities to use a yield bearing token across the Ethereum ecosystem

Does Beanstalk have/need a marketmaker or group of marketmakers that are/will support the peg?

• You can see in the data an increasing # of Arbitrageurs, which is good
• How do you see the game theory of players having so many pods riding on the success of Beanstalk?
• This makes it so there will always be people in the pod line working towards the success of Beanstalk, even if they are doing so purely selfishly

Can the farmers market become an extension of the field in terms of supporting the peg since you already need to purchase beans to buy pods. Would it be a “tax” if the system charged a % of beans on each farmers market transaction that would be burned? This burning help with peg maintenance.

• Yes, this would be a tax, a fee is a fee
• The macro goal is to make an efficient market for soil — such a tax at the margin could distort the efficiency of this
• Beanstalk tends strongly on the side of on additional fees or taxes
• Beanstalk DEX
• A high-level goal for Beanstalk is a native DEX with no fees whatsoever
• Incentive for providing liquidity is stalk rewards
• Attraction for users is the lack of any fees whatsoever
• Decentralized open source tech can bring fees down to 0 (it’s a race to 0)
• Actually offering 0 fees would be massive and would create the ultimate DEX
• This is theoretically doable using stalk rewards
• A DEX allows for cross-chain bridging with minimal cost. This way, a Beanstalk DEX could create a hub for Defi across any chain
• The idea of a Beanstalk DEX is very nascent but it’s very exciting

Transcript

okay uh well we'll go ahead and get started thanks for coming to class um so this has been a pretty nice um nice couple of weeks we've really started to tighten up around the peg which has been pretty exciting i'm sure that people have lots of lots of questions for publius so uh province i'll i'll pass it off to you and then um i don't know if you want to give a quick quick update on maybe a pod marketplace and you know anything else that's on your mind and then we could get class started sure the i mean maybe just this is more of a not a protocol specific thing but we're a little you know we're over six months from deployment and that's very exciting so to be a uh be you know six months from when being stuck was deployed on mainnet it's just very exciting so uh this week in particular we've been really uh you know looking ahead and thinking big picture about being stuck in uh what needs to happen to not just you know have been stopped become you know widely adopted on ethereum but really to be a a a and it's in a central part of defy uh for the long term so just a very exciting place for us to see the protocol in and and it's uh you know we're very grateful for the community that's forming so uh with that in mind and happy to talk about the pod marketplace if people are interested um you know we can answer questions uh whatever people have on their mind sure um oh i do have one just kind of a little bulletin item i just wanted to mention uh east denver is is coming up um if it's from the uh that's in the next next few days i think it's the 11th through the 20th it's kind of a long range um i may have that off by a couple of days but we're whipping up some stickers for beanstalk and i wanted to know if anyone was comfortable uh handing those out at youth denver uh we could send you a roll of stickers uh you know just to promote being stuck so we're um whipping up some stickers and if you have a if that's something that you'd be interested in just shoot me a dm um i obviously understand if you don't want to you know doxx yourself or be involved but if you're interested let me know um okay so we're open for questions now i'm going to go over the class discussion um and i see that uh pubis uh pubis has a question here i've been hearing that beanstalk has growth cycles what factors contribute to its cyclical nature [Music] well supply and demand is constantly changing the cyclical nature of supply and demand is primarily due to the fact that when the price is above one or it seems like the price is more generally above one and therefore there is inflation that tends to create more demand for the protocol i.e you know it's working so people people look at that and try to come in uh and that creates a positive cycle similarly when the price is less than one some people look at them say well it's not working anymore and sell and so that uh just tends to create uh a cyclical nature uh in terms of how the system uh trends over time and uh that's not necessarily exclusive to beanstalk uh it's certainly not uh but but it's exacerbated when you have uh a system like beanstalk with no real intrinsic value or anything of the sort uh and so it really is just a question of incentives and in the early days you would expect you know those cycles to be uh more exacerbated than as people start to believe in the model and the incentive structures okay i think that answers it um i had one dm to me um by tbec i'm just gonna read that uh tbx says hey dumpling i have a question for publius at university chat i'd like to hear more about publius's philosophy on what a sustainable level of debt for the protocol is so ideal equilibrium is defined as the price of a dollar or the t-wap at a dollar and the debt level at 15 of the bean supply which is very low and that's explicitly defined such that the protocol is able to um respond anytime the debt level gets really high it's supposed to basically fully reset it doesn't need to reset to zero but you know uh a significant paying off of its debt and a true decrease in its debt level to near zero it is what a a complete deleveraging looks like so the protocol is working towards that to answer the substantive questions to what is a sustainable level of debt that's an impossible question to answer because the the real question is at the margin can bean stock attract enough creditors or demand for the silo or in some way can be stock attract enough demand for beans when the price is below a dollar to return the price to a dollar and that is not definable other than in practice it's binary it's either happening or not and in the grand scheme of things it's binary in the sense that either the debt level was sustainable or it wasn't at some point the system dies if it wasn't so the fact that the price is at a dollar and more than that it seems like the price is at a dollar in a relatively sustainable or strong fashion is an indicator that the current debt level is not too high whatever that means um you know we're basically 1500 what is it right now which is really uh significant maybe yeah 1478 at the moment which is significant in the scheme of any system uh you know having a 15 to one debt ratio is uh you know an eye-popping number in the grand scheme of things um i don't think that in the long run bean stuff wants to settle at this type of debt level and again the starting point is the goal is for beanstalk to deleverage entirely um i think the thing that might be helpful to appreciate is uh in a similar way to uh it's unlikely that uh if the price returned to 24 cents again beanstalk would be able to recover or at least the recovery would be much more difficult than the recovery from 24 cents when the protocol is young and small in a similar way it's going to be much easier for beanstalk to de-leverage and demonstrate a real proof of concept like it did from returning the price from as low as 24 cents back to a dollar and you know over the past month or two as we were at 90 cents 80 cents people look back at those much more risky times at 20 cents 30 cents uh or 24 cents 30 cents and have uh more faith at 80 90 cents in a similar way i think right now the protocol is kind of building its history and building its credit history and so while the pod rate the debt level is particularly high uh in the future that will hopefully be a good reason for people to lend to being stock at a 500 debt level for example so in the context of things at the moment you know i think it's important to realize that last time being stuck went through a mini growth cycle around thanksgiving uh where again the soil parameters weren't properly set so uh the pod rate uh increased during that time even though it should have uh decreased significantly if the parameters were properly set uh the bean supply increased by 150 from around 20 million to around 50 million and if that happened again not to say that it will but if what's called a 100 increase at some point in the bean supply uh in a short period of time uh that would uh under the current parameters for soil effectively result in a halving of the pod rate and so already when you get down to a 750 pod rate you know a 15 100 pod rate looks you know looks pretty looks pretty good on the record in the grand scheme of things so um is the sustainable who can say um but i think you know at least in our perspective this is looking more and more sustainable uh the fact that the price is maintaining its peg uh more and more consistent is very encouraging and that's step one towards getting to a place where the pod rate can decrease and uh you know while i think there are some places the efficiency of the overall model can be approved i don't think that the soil is one of them at the moment and therefore you know we're very excited to see whenever it is that we go through a larger uh short-term growth cycle and not to say that that'll happen anytime in the near future you know that that really should kick off a larger deleveraging great um uh mod you hopped down up so go ahead and ask a question hi guys how are you doing doing good you're good nice to hear your voice what do you got for us well i i have a series of questions so i may not ask them all in order just you know we can take a break or or go with it um the first two are around on the field i understand uh and i agree uh completely agree with publius that um whatever inefficiency problem that we're having here is not stopping us from you know maintaining peg or continuing uh with it um so what what the two questions that i'm going to ask right now well they're not a priority it's you know for the sake of discussion or just for thoughts on it so the first one is is with the weather publius what what do you think of a function so a weather reducing function that only kicks in or only takes place when we are selling out of soil for two consecutive seasons in order so this means that only whenever we're in the complex calculation of demand for soil so when that happens this is when we reduce the weather by by you know more than three percent are you still there yeah pubes if you're if you're hopping in with an answer we can't hear you right now can you hear us now yes sorry about sorry about that so so to answer your first question mod this is actually something that we've thought about a lot which is in certain instances is it appropriate to decrease the weather more than you might otherwise and this is particularly the case when you have excessively high debt um but the question is what would be the trigger or the the cause of that and multiple consecutive seasons where there was uh complete demand for soil was certainly one way to do it maybe it could be multiple consecutive seasons uh not necessarily two um not opposed to that idea don't think it's the most substantive in the grand scheme of things so it's not something i've spent too much time really fleshing out but uh like there's nothing wrong with this idea in theory i think the real thing to highlight would be that you would just want to ensure that this was a period of real excess demand for soil and you would also want to move the weather down quick enough such that you could continue to measure you know demand for soil accurately and get a sense of whether the decrease was too much or or not you know and then if it wasn't too much maybe you want to decrease it again at the same rate so it's a question of not just doing it once but uh does that increase you know again or decrease again and again and again in a jump fashion so uh some complexities there but very interesting to think about and totally in the right place thank you and i was thinking um so if we think that this is a good idea then how much to bring it down as you said and i was thinking there are three ways of doing that one first what it can just be a set value like we say like three percent then we bring it down by nine percent and that's it only it always only kicks in at nine percent or it can be a percentage of how much we're minting or it can be a percentage of what is the weather so we say that whenever this happens then you know the overall weather reduces by five percent yeah i think the first at first glance i'd be inclined to have something closer to the first idea you know in the spirit of the weather changes are all fixed amounts i think this would most likely fit into the model as like a fixed condition where there would be um you know a larger fixed decrease in the weather but a lot of different ways to go about it here thank you my second question now is about issuing soil again when we are selling out of soil in two consecutive seasons in general so i understand that we're always issuing soil because we always want to be able to measure demand but is there real value in measuring demand when we're selling out of soil um you know consecutively do we care really like you know what's going on that's actually the thing that you need to measure right let's say the system lowers the weather by x percent three percent currently or ten percent in the future um according to your first question uh it's very important that beanstalk can compare in consecutive seasons how that change in the weather affected demand for soil yes and we continue to issue um soil like you know as long as so we reduce the demand and then we're issuing soil uh and if we're still selling out of it we you know even after reducing itself out then then we continue to do that but i want to separate them though the two the first and the second one because you know we can still do the second one even if we don't reduce soil at all [Music] you can decrease the weather but you don't know whether you decrease the weather too much unless you have soil is the point and if we talk about creating sustainable peg maintenance the goal is for any time there is soil for there to be demand for soil and therefore it's very important that if beanstalk is lowering the weather even if it's a small amount of soil it can use that to measure whether it's lower the weather too much too little or you know okay okay i i got that if anyone else has another question you know i can stop and come back or i can continue what what do you say dumpling uh mod i just have one question that fits right in here um so i might ask it and then we'll get back to your questions if that's okay um so publius a question that i have and i think i was chatting with austin about it as well is it seems like there's a minimum soil threshold where the gas might be causing a friction so um like if it's under probably you know 200 or so if the soil i would almost call that soil then like dust where it's it may be issued but someone might be waiting for more soil to make it worth it because of the you know the transaction costs of of the so so i'm wondering how that might affect things yeah go ahead i don't disagree that there's there's a there's something to be said for the friction on the east market makes cases where you have 50 soil you know that's hard to measure is it is that there's no demand for the soil or is it that there's you know just too much friction for 50 soil and even if people wanted it they're not going to take it and that's totally reasonable um i don't have an answer for you as to like a an easy solve around that other than has been stuck grows you know this is really just a scale problem 500 soil um is is a lot less of an issue um you know but at the same time it's it's important to realize that there is a fundraiser outstanding and you could if you wanted to sell you know 240 000 right now into soil right now you could and no one's really doing that so even though i think you have a very interesting hypothesis as to why you know there may not be demand for soil i think in practice and and there's also a comment to be made that it should be much more clearly displayed on the website um but that's separate from it like just on an economic perspective there is pods of it new pods that you could access even if it's not explicitly soil um you know from a protocol terminology perspective but people are aren't lending to the protocol right now even though being stuck it's well into so i would say it's probably not the issue at the moment so i totally understand that but if there was like i'm imagining like there was zero soil before how often does a small amount of soil get issued and if we're above peg and there's like 50 soil does that cause weather to increment by one or am i am i off base it's a little more complicated than that um but in short it actually might be helpful um and i'm going to try to find it but if someone beats me to it i'm trying to drop the weather changes from the white paper that page hold on i know it also factors in how quickly that soil was was gobbled up but it just seems like if that you know if there's a 80 or 120 soil or something like that and yet we're above peg it just you know just strikes it it weird that we're above peg pretty much all the soil's gone and yet you know the weather is increasing um so i mean that was just yeah i dropped i just dropped in class discussion the photo for a photo of the white paper and the the weather changes so i think the one place we might highlight is if you look in the top right or i guess the top chart and you look at uh coordinate two negative one how that's a one whereas the rest of the column uh y equals negative one are all zeros um i think the fix to what you're talking about dumpling would be uh because again this is the case where the price is greater than one and there's no demand for soil basically because there's only 50 for example that's the special case um or it's not a special case that's the general case if you change this to a zero that would basically mean that bean stuff doesn't raise the weather um but when the price is greater than one and there's decreasing demand for soil um so that might be like the quick fix uh and i mean there's something to be said for proposing a book to do that but i you know i think that would probably be the simplest uh way to address it from a like a pure economics perspective i don't know if it's the best long-term solution and we're hesitant to propose short-term fixes like that but at the same time you know there's a strong argument to be made that would be an increase in efficiency in the weather maintenance or the weather changes system uh at least for the next couple months while being stock is closer to its current size and when you set a minimum threshold of like 200 like if the soil or 100 or or something along those lines for when for when it is then that's when it it doesn't go it's that's when it goes up by zero so it's funny right this is more of a general question because the white paper also has to figure out well what is the threshold below which um you start figuring using time instead of just demand for soil over the season and the there's a lot of different factors that go into that number but as soon as you define it explicitly it does become very exposable to manipulation like you can sell all but all but 200 if you will um now that's again we're speaking a little bit more theoretically um so it doesn't prevent that from being a quick fix but we're not the biggest fans of quick fixes for being stuck and would almost prefer to just let the model play itself out even if they're due to its size uh short term inefficiencies i wonder also if there's um yeah i i wouldn't have to go down this road too much but i think that i was just thinking maybe there's a way you could sort of like almost like make it a higher percentage chance that that this happens as you approach that magic number but you didn't you didn't announce what that magic number was you know like if it was say it was under 200 if it was the soil was 195 then it'd be like a 98 chance that the weather doesn't increase and a two percent chance that the weather does increase and you could sort of scale it up like that based on some kind of um well anyway we obviously yes you know there's beauty in the simplicity but you know it's it's all interesting to think about yeah okay um mod you're still up on stage i want to see what your questions are yeah thank you uh dumpling [Music] douglas what do you think of the current uh percentages of being that's between you know the liquidity pools silo and circulation where we stand today most of most of the beans are in the silo so that's around like eighty percent and then you have eleven percent and pooled and three percent encircle in circulation do you foresee this percentages changing as we grow and when when we do what do you think the ideal you know percentage would be you know this is actually one of the rare questions that i don't have basically any answer for you um i don't think that beanstalk really cares about the distribution uh of beans that are in the silo versus not in the silo when the system is young and there's not a lot of use for beans or stock or seeds outside of the system uh you're probably not gonna have too many circulating beans um unless the system collapses uh because most of the returns are in the silo or the field at the moment um but you know you'll you'll see an increase in circulating as a percentage as like the ecosystem expands and there's less stuff that just exists in the silo um but i i don't really you know i'm kind of unwilling to speculate because it's kind of non-substantive so it doesn't really matter and therefore you know would rather not make it up okay um i just wanted to take us through this you know thought process or think about it uh for a bit if we say that the demand because our objective is to become the currency right and and our you know strength is that we can meet any any demand so in that case when when you're when looking when we are such a currency um would is it fair to think that it would only make sense for it when we're at that stage that the circulating you know uh percentage is the highest more than the silo i mean it can't it's not that the majority of the people are you know using this currency just to silo it they are using it to use it so is this first assumption fair to think of so when we are big enough and we have become you know the currency that's being used then it makes sense for the circulation percentage to be you know maybe not the biggest or or at least the bigger bigger than both silo and um pooled beans yeah i think that's generally correct i mean it's all a question of what scale are you talking about if beans are generally like a deposit account for people all across the world well then your rate of circulating beans may be like a larger macroeconomic indicator right so there's a million scales that you can analyze this at and that might be what makes it so hard to speculate yeah and and when that happens then being is or let's say that you are more susceptible to volatility or or you're more stable basically when you know there's high percentages in the silo and pool versus in circulation so basically i'm saying that the challenge is going to be more challenging well i would actually push back on that because the goal is for the withdrawal time for the silo to come down to near zero and that therefore that shouldn't be the case okay um last question is maybe um just just for fun or just a brainstorm um i don't know if i think like you might have be aware of poly market and and the recent fine that they got for those who are not aware poly market is like a predictive protection market that recently got fined like the us government and you know they were continuing operations outside of the us um and and you know even though they're decentralized the reason you know they weren't really decentralized is that everything still had to go through through the market um itself um and then this paired up a new discussion of you know for you to really have a you know uh um i guess do you have to really have anything decentralized uh you have to have a decentralized currency so do you see this as an opportunity or or just noise uh publius you know when when we have you know prediction markets right now that you know are you know for them to really work out they have to really use decentralized currencies well there's a lot of noise out there um but like the poly market thing that you pointed to or highlighted really does show uh the bigger opportunity at play for beanstalk and so we don't necessarily pay attention to the day-to-day fray around you know particular judgments or fines or fees but it's very clear by what's happened with dm and facebook for example that the federal government is not they're not playing ball at the moment and cryptocurrency and d5 needs to kind of make a decision whether they're gonna just wait around for the government to give it the okay or or not and to that extent you know there's real meaning behind the value of decentralization in that context and so we are big believers that at some point at some point beanstalk will start to demonstrate enough stability that places like polymark and protocols like poly market you know start to consider being as an alternative because because of for a large reason you know the regulatory environment in addition to the the economic benefits of having a positive or neutral carry stable points so certainly certainly i think from a macro perspective things like that point to an opportunity more than anything else but you know don't don't necessarily have comments on the specifics of poly market per se thank you and and i i always think it's an opportunity even though probably our biggest or bigger one is in my opinion is being able to meet any demand and and then second comes you know that you're truly decentralized my last question and i'm sorry for taking this long time publish what would be your best explanation to the recent rally um my the way i'm looking at it is this is mostly attributed to the rise of the price of eth am i am i reading this correctly so there's certainly some uh strength in the beam system that's the result of the strength of the youth market in the cryptocurrency markets in general um but i would almost highlight that with the growth of the curve pool the effect of eat on the ecosystem and the price of being has decreased significantly and so i mean it it can't be understated that eat increasing 20 30 percent short periods of time is meaningful to being stuck at this point in time like we were not hiding from that um but at the same time like the there's three million dollars in the curve pool that's been added over the past couple weeks uh there's been you know hundreds and hundreds of thousands of dollars of siloed deposits with being nlp uh from a bunch of different wallets over the past couple weeks so i think it's a combination of each strength and then a lot of beanstalk native uh network effects and and headwinds or excuse me tailwinds that are pushing things in the right direction so uh certainly a lot of it is the e strength but i think that there's also a lot of good things just being stock native that are happening that are good thank you publius i appreciate the time and the answers okay thanks mod for all your questions um rex uh go ahead hey guys um just wanted to quickly get publius's thoughts on the uh the hearings today the congressional hearings with the treasury sta and under secretary it just sounds like there's a lot of a lot of discussions and interested to hear what what thoughts might be not to come off as uh ignorant but didn't pay any attention to them i was working all day yes so um no longer the short of it is that um the treasury undersec under secretary of the treasury was talking about uh or trying to push for stable coin issuers to exclusively be fdic insured banks in the united states and so that could potentially limit uh the ability for i mean things like that are not surprising at all the federal reserve has made it very clear that they are both not really looking to develop a cbdc themselves and are not cool with like circle issuing stable points and so then saying you know we really want everyone to get a banking license and then they're actually going to restrict the banking charter uh they're going to restrict who can get those like you know cynthia loomis the senator of wyoming recently wrote a good article on the wall street journal highlighting that the fed isn't approving uh kraken uh and avanti i think um for for uh banking charters and you know they may talk with something like project hamilton about a cbdc framework but they're all talk and they're basically they're gonna drag their feet left and right and i think you know without speaking too specifically because we don't wanna put a target on our backs more than i feel like we already have starting beanstalk you know dope one made a great comment on an interview i think it was from bloomberg or something recently where he was like listen like you know he's not so concerned with the regulators and that may be because he's not in in america um per se um but i think more generally that's the attitude that any decentralized protocol that's serious about being an integral part of define needs to have and so when we talk about decentralization we mean it and uh while currently there's certainly some parts of being stock like the website uh and and uh you know all the i mean there's just a lot of different places across the board that could be further decentralized across the stack um we're working to make that happen and uh we really think that's going to be aside from a strong product market fit uh the thing that makes beanstalk uh last in the long run i appreciate that insight and i guess the other thing that is kind of on my mind right in that same realm is you know is there [Music] is there a potential where beanstalk changes its reference peg you know where we say okay because of you know how the the political winds are changing or whatever in the united states we're going to change to a different peg because that gets us you know further away from that that centralization or any thoughts on that well here's here's the beauty of it of being decentralized beanstalk really doesn't give a and more than that beanstalk can once people believe in the credit of beanstalk and there's demand for soil beanstalk can issue assets be inspected arbitrary value pegs uh the demand for those different pegged assets is what's going to determine the the supply of those different pegged beans not beanstalker any decision maker and it's very clear based on the current structure of the stable coin market that the vast majority of demand for stable coins is a usd stable point so uh while there's a lot of more interesting ideas around like a btc peg stablecoin uh i mean i don't think that that's going to make a difference in the long run and the point is beanstalk is and will continue to be developed in a fashion that realizes you know there's a lot of uh people in the government that are gonna be unhappy about this uh if it continues to work i appreciate that insight and admittedly i agree it's uh just nice to hear you say it um publius can you give us a quick um out of the pod the pod marketplace just came out this last week and if you haven't seen it yet it's gorgeous um but i just wanted to get your take on kind of a before after like what your expectations were going into it about how many people would list what pods would trade for you know the whole the whole thing and um you know now seeing it in action uh kind of comparing those two well you know not to overstate my excitement uh you know and we did tweet a little bit about it but uh i mean it's just really it's really cool you know like this is a novel dead asset it has its own structure and now there's a dex to support it just like you know kid in a candy store um but with regards to expectations and how those have been met i mean candidly the farmers market is like very much an mvp and there's a lot a lot of efficiency upgrades that can be made uh which are basically listed at the bottom of the farmer's market section of the white paper uh that explain how the market can be significantly improved in efficiency and structure and you know wanted to give bean joyer his credit because he did a really amazing job getting the mvp up and running um but at the same time you know just from a pure economics perspective it was evident that it was going to be like the most liquid market at the start and so i think we were generally impressed by the amount of we were actually really impressed by the amount of listings um the number of or the amount of uh orders was was more in line with our expectation whereas i think the number of listings exceeded our expectations uh we are still expecting you know the the listings to come down a little bit in price they seem a little bit high um in our perspective i'm kind of making that up but you know again not financial advice but that would just be my my initial expectation was that the market would settle a little bit lower if you're just looking at the pod market chart right now there's a almost like a linear decrease at the moment uh in the bottom left of the chart whereas you'd really expect that to be where the meat of the curve is um and once you get out to like 300 million in line there's not going to be that big of a price difference between 300 million and 500 million um so still still looking to watch that curve uh you know increasing its curvature a little bit um if you will but overall just very cool to see and i think it's a big it's just a big step for the ecosystem in terms of uh developing as a more sophisticated financial you know protocol and ecosystem definitely and like the kid in the candy store yeah i was i was just watching it refreshing looking at it you know for a solid hour two hours right when it came out it was really cool um so yeah that was a that was awesome uh and thanks to everyone who for all the hard work that went into it um okay i have from dr beans here i have do you see a scenario where there's less than 1 billion being on the market by the time this debt cycle completes and what initiatives are being worked on to create opportunities for this level of demand slash what are the key drivers for 1 billion being demand within the greater ecosystem so there's kind of a couple of questions in here but i'll let you take that well the billion dean's thing is it's probably a good target for a general deleveraging i mean it's like what is the level where you'd say okay the system is deleveraged certainly like 15 but given the current structure of the soil that's not going to happen anytime soon that would be at like 10 billion and so when you say a larger deleveraging i mean like a billion would probably get the debt level of the pod rate to a couple hundred low hundreds and that would that would likely constitute a larger deleveraging um i think that's probably that's probably yeah low hundreds is my best guess um and then with regards to well how do you actually get there one it's very important to realize that you don't need a billion dollars uh that's the main difference between being stuck in a collateralized stable point you don't need a billion dollars of demand or collateral to mint a billion beans uh at the margin you just need more demand that starts printing and then you need a lack of sellers for lack of supplies such that the printing continues and the question is well what are we doing to or bean stock farms doing to create supply and prevent people from selling because they have an expectation that beanstalk is going to continue to grow uh i would point to i mean there's there's a lot of different things going on um one of the things that we're going to hopefully publish in the next couple of days or weeks is a slightly updated road map to lay out some of those things but having the silo accept uh various uh different lp tokens like the bean three curve lp tokens uh for example is a big step in that direction which will greatly improve the ability for beanstalk to integrate with other protocols and tokens um furthermore integrating the b and three curve pool into the oracle and the minting schedule that's a really big one when it comes to increasing the rate at which beans can print uh given a similar amount of demand and then i think when we take a bigger step back stock and seeds becoming liquid and creating a wide variety of different opportunities to use a yield bearing token across ethereum that's that's potentially a really cool growth opportunity in and of itself and so i think there's just a lot of different it's hard to say which which will be the main driver or the big the big the big kahuna um but there's a bunch of different things across the silo uh the oracle and uh liquidity for stock and seeds among a couple different other things like marketing campaigns and beanstalk farms creating a brand uh that i think all will help help create an environment where that type of growth and adoption is possible okay great and also from uh from dr beans um how do you see the game theory of playing excuse me how do you see the game theory of players having so many pods riding on the success of beanstalk um does beanstalk have a market maker or a group of market makers that are willing to support the peg well those are totally different questions in my opinion with regards to the ladder i think there's a if you just look at the unchained data there's an increasing number of different arbs that are buying low and selling high which is really interesting uh and then with regards to the question of what is the the dynamic of having so many pods outstanding i think it's primarily that there's a lot of people that are really incentivized to work on beanstalk growing to get their pods to harvest and specifically given the first and first out harvest structure and that beanstalk doesn't mint when the price is below one you don't really have the chance that people are gonna all at once for run and stop working on the protocol maybe a small trickle but the point is they're always going to be people in the pod line working to develop bean stock even if it's in a self-interested capacity and that's in addition to stockholders got it thank you um hey uh good evening everyone do you hear me okay i sure do great so yeah um just to kind of follow up on uh mod's question and i believe rex i have a much greater appreciation based off of recent events and just kind of looking at the landscape of d5 in general of the the um the restraint that i think publius has shown with the protocol and liquidity model um i understand now i've have a better appreciation for why perhaps from a you know scrutiny perspective um in the long run and also from a decentralization perspective that's not ideal so kind of touch or following up on that my understanding also is that you know in alignment with that you know being stock doesn't want to have or wants to minimize friction as much as possible within its you know at its foundational layer and i was thinking about the farmers market and some of the recent events you might some of you might have seen yesterday i believe uh super rare um terminated one of the team members they kind of long story short whether you agree with it or not i think they the team member had posted some according to some people or were offensive song lyrics from years ago somebody dug that up from twitter and uh i noticed a lot of prominent people on crypto twitter um selling saying that they were selling their super rare tokens whatever blah blah blah and it just got me thinking like about the farmers market but then also about the potential for um you know expanding the utility of being across d5 from an nft perspective so i'm going to focus i'm going to have two parts my question publius with the farmers market you need beans to buy pods and we've had a very uh spirited discussion in the economics channel over the past few days and i really just want to thank everybody that has contributed to that i think we're all passionate about wanting to see this project succeed and i think that manifests itself in different ways so i just want to thank everybody for that i think we've had a much more constructive conversation in recent days so um thank you for that one of the things i've been thinking about is can the farmers market by become sort of like an extension of the field in terms of supporting the peg and by what i mean by that is since you already need to own beans you need to purchase beans to buy pots would it be a quote-unquote tax if the system charged um both on the buyer and the seller side a percentage of beans that would then be burned upon the sale of the pods and the burning itself would not equate to new pods so it would be to the benefit of everybody essentially um we've had a you know i've had some discussion with some people that said you know this would be an added friction my my thought on this is it wouldn't be because you already need beans to buy pods number one and number two the fee itself wouldn't be going to like a treasury right beanstalk doesn't want to have a treasury all about decentralization the idea of burning the beans would essentially be that it would indicate how you often you be like a fee is a fee you know it's like you can tell me if if i don't want to buy a candy bar and you say well the candy bar is a dollar that's okay i'll buy the candy bar for dollars all right well here's 99 percent of the candy bar and i'm like well what like i just i thought i bought a whole candy bar you're like well you can buy a whole candy bar but you got to pay more for that um any way you slice it you're still charging people more for the same amount and there's actually you're totally right there's a real argument to be made that in the case of the first market that's not uh friction in the traditional sense in terms of the model and in fact if you're burning beans or burning pods uh whichever side of the market you decide to charge uh you're benefiting the ecosystem as a whole that may be uh at the micro level but let's just think big picture the real goal from a macro perspective is for beanstalk to create the most efficient market possible for soil when there is demand for soil everything is hunky-dory like the system is good and so from a macro perspective i would argue and there's again you could argue that this is too marginal and it does make a difference that imposing attacks such that the benefit or your future expected value of a pond if you're going to sell it on the farmers market before you redeem it is decreased that at the margin could decrease the the demand for soil or in another sense increase the weather that beanstalk has to pay for soil so on the one hand if you're arguing that it's just a marginal increase in the weather but it's not going to change the demand for soil then you could actually make the argument that it it makes sense to impose that tax um i don't have a strong opinion which way that would cut at the moment but as you know we we tend to bear very strongly on the sign of no fee or no tax and so you know this doesn't sound like something that the there's really a benefit there um like in general and then it's like so if there's no benefit or there's a super marginal benefit what's the cost notes it's either a marginal or slightly larger than marginal cost and if that's your benefit and that's your cost not sure it makes sense to implement at the protocol level given it's pretty antique against the ethos of of the protocol which you know low friction is uh even in the white paper so uh not sure if that that answers your your first question or if you had another question right i guess from my perspective i just don't see it as a tax because it's not going to the fees are not going to be collected by essential oils the candy bar the fraction of the candy bar that you're taking away i'm taking away from you it's going to go to a child that is starving like it's going to go to a great cause nonetheless i'm still taxing you for it so it's like it's separate from where is it going it may be no one no one gets the pods no one gets the beans it gets destroyed um so everyone benefits at the marsh and you're taxing an individual for some general benefit and uh i'm not sure that that is aligned here okay on a separate note uh related to that on the nft front i'm looking at the big players in nfd market open c looks rare and super rare opennc charges two and a half percent up front and primary sales looks rare everybody's familiar with that it's a fork of open sea very popular right now two percent charged on primary sales super rare 15 charged on primary sales super rare just their top artist sold a piece for 120 eat super rare got 18 eth as a fee my question is if we were to just launch an nft market to drive the utility of bean would a fee like be a friction i don't see it as a friction because all the other prominent players are charging exorbitant amounts so can you see right let's take a big step back and i'm sorry to cut you off again no problem in the grand scheme of things uh from like just a pure markets perspective uh if you look at unit swap versus curve units swap charges up 0.3 percent release unit swap v2 on all trades curve charges 0.04 percent that's a huge difference in the grand scheme of things um and so you may say well what's the difference between 0.04 and 0.03 or 0.02 percent you know whereas the economist in me is like well that's double the fee and so in the grand scheme of things one of the i mean one of our high level like goals for beanstalk is to actually have a beanstalk dex which i don't think this is something we've really spoken about before but the beauty is that you can have a really high quality liquid decks because of stock rewards um such that there's a an attraction of liquidity for because of stock rewards but you can actually have no fees whatsoever and so the attraction for adding liquidity is the stock rewards but the attraction for using the platform is that there's no fees whatsoever and so from a pure economic perspective in our opinion one of the real beauties of decentralized open source tech is that it's a race to zero when it comes to fees openc was forked uh where someone said okay we're gonna undercut your fee by 20 and they've started to take over market share so this is a race to zero and i would argue you know this is where sure at the end of the day you may be able to get a product market fit with one percent fear half a percent fee but it's it's not it's not sustainable and any fee that you end up introducing it by a fork that says we're gonna lower the the fee by an arbitrary amount okay cool thanks all right guys um i i agree here uh with the marketplace i think because this is this is then going and competing against opencm and it becomes a different kind of business and you know you're charging for something different than the objective of it right now here which is bringing the demand for four beams please you just want to mention the dax what are you for seeing it how will that work what would it do yeah don't have like too many thoughts to share but the general ideas you know with any decentralized exchange there's a question of what are the you know the exchange algorithm that you support is it a constant product uh formula do you support different uh formulas like the stable swap algorithm um do you support multiple assets other than just two assets you know these are general things where it's like there's a wide variety of different exchange protocols that are all doing cool stuff but at the end of the day they don't have uh you know they have to create uh demand for their governance token of their emissions token or whatever the specific system is through fees and those fees are a friction and one of the main reasons in addition to the table swap algorithm my curve is advantageous to uniswap is the low fees and so again if you keep in mind that fees are raised to zero the question is well how can you actually offer zero fees or uh as close to zero fees as possible and the the the chicken and the egg around liquidity is sure if there's you know a place you can trade and get the same price and pay no fees you're gonna choose that venue the questions well how do you bootstrap liquidity at those venues at those dexes and i think using stock rewards being stoked will be able to attract liquidity and in doing so you'd be able to create a kind of the ultimate decentralized exchange um that's a little bit further down the road so i don't have too many thoughts other than just from a theoretical place how that would work but um it seemed relevant given the discussion thank you i'm just looking over the class discussion seeing if there's anything i missed see nasdaq is uh quite excited do you have any questions i don't know if you're at a place where you can you can speak yo what's up hey how's it going i was essentially i was just saying that's that's pretty huge um like like are you essentially saying that you're going to like you've been talking about implementing a gauge system and everything is this kind of like overtaking curve um like if everybody starts swapping their stables in the bean decks and then so i guess like that sounds huge one how will that drive demand for beans will that just kind of like show people that they should silo and so and like it gets attraction to the platform and then people start buying stock and seeds um and then two like how to get there um my quick thought was that okay we need erc20 tokens for the silo and then we also need stalk and see tradable and then we can kind of start building that um yeah i mean you know you've only just started talking about this so only just started thinking about it but let me know if that makes sense well first off we push back it's not you it's we uh basically everyone in this call is probably most of the people in this call are gonna have a hand in all this um i think to answer your former question and it's related to the second question the real starting point is beans what makes this happen is beans being used as a medium exchange and so as you have more and more liquidity pulls against beans on various different dexes uh the question becomes well uh in what cases can you actually uh do better once you have those liquidity pools and if you imagine that the silo is going to be able to say okay well you know all of a sudden there's no gauge rewards for this pool but all of a sudden there's gauge rewards for another pool and you can convert over you know there is an expectation that you'd be able to pretty easily incentivize people moving over to the decks of choice in a given instant and doing that in a decentralized capacity and so the question is well building out like a beanstalk dex what does that actually look like and how is it better you know there's a a lot of different questions there i don't i don't have too much to say other than you know the goal would be for it to be as flexible as possible if anything and i say this with i'm i just don't like to talk about things that aren't well thought out enough where it sounds like we're talking out of our ass but the other place where this really makes a difference is when it comes to the cross chain implementation for being stock where having a no fix a dex basically allows you to with slippage only uh on your price on your execution price uh basically go from any asset on any chain that being stock is on and has liquidity against to any asset on any chain that beanstalk is on and beans have liquidity against and so when we talk about well where does this come in this is actually part of like the larger beanstalk ecosystem and creating like a hub for for defy and you know i i think the stock and seed liquidity and the silo upgrade that's all part of it but this is going to be a larger development uh project and i mean you know by the interest in the questions on the one hand i'm glad that we mentioned it because it's great that there's so much interest but on the other hand don't want to sound like this is something that's a couple weeks away this is more like high level planning on what the overall ecosystem should look like that's very fun awesome thank you yeah that makes sense so uh two months no i'm just messing around awesome thank you thanks for coming we can either spend time on classes and calls or we you know we could disappear for six months and then all that stuff would be ready but it's difficult not not to build a crazy idea on on a crazier one but if beanstalk anyways can peg you know anything you know it will be packed to anything so can we sort of have like a decks that can sell you anything so you know we don't we don't we don't even have to have it we can just tell you whatever you want and then we create this of everything and we become you know the decks of everything does that make sense meaning like you want btc beans and you can just get btc beans from beanstalk or what do you mean yeah so the same way that we're having we're having beans that affected the dollar so we can have other iterations of it that affect anything and then we can sell you buy and sell you anything on our platform correct okay very very excited to see how this progresses and where it goes hey mr manifold hey dumpling hope you're doing well i just wanted to give a shout out to uh jim i see this is his first time in here really smart dude so uh welcome to the beanstalk community we're glad to have you buddy hey jim uh it's just kind of expanding on that uh we'll actually kind of like mod set and now this conversation i don't want this conversation to get like two minutes or two out there but just the thought i had on my just the thought i had is you know like mod said if you can kind of create synthetic assets i don't know if that's the right word so just you know shoot me down if it's not but like if you're just trading like you know btc being first or like yeah like being btc trading credit you're basically trading credit the install credit in a denomination whether that's denominated in dollars or btc or whatever yeah right and so like i don't know if you looked into like synthetics at all and like how they trade cents and how the supply of synths is kind of limited by the c ratio of that protocol um but this would kind of flip that model upside down and kind of allow for unlimited scalability hypothetically that because the credit is much more skilled it's the same flip from collateral to credit just from a dollar stable coin you're now applying it to every other asset so the starting point is is the dollar because that's where there's the most demand and so from a creating credit perspective that's the starting point um and maybe i would just say jim welcome you know you should know that we're a serious community and these conversations are not you know they're not a joke and uh if anything it's just that we have these calls every week and so uh you know at some point we do get into the philosophical or the ideal um but at the same time we're you know we mean business and you know this isn't we're not just saying this cool yeah gonna think about that some more really interesting okay guys i think this is a pretty successful class a lot of interesting stuff um brought up here there will be some notes distributed in case you want you came in late you want to listen to the recording um oh uh jim do you have uh you want to come out for a second ask the last question guest of honor here okay or maybe you're just waving that's fine too um but uh yeah anyway uh if uh you want to listen to the recording tubing or not to bean uh he'll be uh posting some notes and the recording so you can look for that and uh yeah thanks for coming we have a meeting uh at 8 30 eastern time on thursday so that's a uh it's a beanstalk farms meeting um so we're and then we're in discussion also of having monthly dow meetings as well as uh the weekly beanstalk farms meeting which is usually project-based and open to everyone so anyone can come and there's usually some open time at the end of those meetings too if you have any questions about specific projects or initiatives so feel free to come to that and that's in the that's in the calendar here at our discord so again thanks for coming and uh we'll see you all soon you