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Beanstalk University Class #15

Date
March 9, 2022
Timestamps
0:00 Intro • 3:25 $BEAN Curve Gauge Proposal and Convex Integration Updates • 6:40 How Curve Gauge Will Work With $BEAN • 11:35 Is The Debt-to-Supply Ratio Dangerous? • 19:50 Pod Rate and Dune Dashboard Updates • 23:15 How Will The Protocol Continue to Incentivize Creditors • 25:10 BIP-13 'Adjustment To Weather Changes' Reasoning and Updates • 32:40 Hypothetical Weather and Debt Level At $4 Billion $BEAN? • 38:10 How Stalk and Seeds Work In The Silo (Technical Description) • 41:30 Yield Bearing Tokens In The Silo • 48:50 FiatDAO & Pod Marketplace Partnership • 54:30 Closing Remarks
Type
Beanstalk University

Recordings

Notes

Summary

  • In this edition of Beanstalk A&T, we cover topics like:
    • Events that Beanstalk holds
    • Convex/Curve/Gauge and Bean’s potential integrations with it
    • Commentary on the Pod Rate / Debt Level
    • Weather changes
    • FiatDAO x Bean
    • and more...

Q&A

What events does Bean hold?

  • Every Tuesday there is A&T University at 7:30pm ET
    • Meant for education, people can come in and ask questions
  • Every Thursday there is a DAO meeting at 8:30pm ET
    • DAO contributors will update the group
  • Team is creating a space for “office hours” and that’ll go up on the events calendar later

Can you describe the crv/cvx proposal, where it stands and what to expect from it?

  • There are 2 proposals
    • Curve Gauge proposal is currently live
      • Our proposal was met with questions around our audit
        • We can get a public report from Omniscia out there in1-2 weeks
        • Tricky part is that we have made updates to the code since Omniscia did their audit, so the audit will be a little bit updated
    • Integration for Yield-bearing tokens to be deposited into the Silo

What is gauging and what are the advantages?

  • There are CRV emissions that are distributed to various liquidity pools. The specific distribution is determined by the CRV gauge. So the gauge system refers to the distribution of rewards to different pools. Being “added to the gauge” means that people will be able to vote to distribute tokens to your pool

How does Curve voting work?

  • You can lock up your CRV tokens to get veCRV. Strength of the vote is proportional to the time the veCRV is locked
  • Curve has a whitelist so not all contracts can participate in the veCRV system.
    • One of these whitelisted is Convex. Most contracts can’t participate directly in the gauge, so they have to do this through Convex
  • Great podcast on how Curve works and the Curve Wars: https://www.youtube.com/watch?v=Z1G94dxZG7M

“There are currently a little over 600M in Pods correct? That would mean the protocol is currently 600M dollars in debt and having 42M dollars in supply. Wouldn't that debt to supply ratio indicate a dangerous situation? What is the plan to flushout that debt?”

  • Debt level is important to track to track health
  • The pod rate has started to flatten since ~1/6, ever since the soil parameter was adjusted to make it more accurate
    • Pod rate Originally minimum soil was set as a % of total Bean supply, so during the November growth cycle, debt actually increased significantly because of the increase in total Bean supply as a result of the growth cycle
      • Now Soil is configured such that the pod line cannot increase when p>1
  • Pod rate = outstanding debt/total bean supply
    • With these new soil parameters if bean supply doubles, we can expect pod rate to halve if debt outstanding stays constant (now possible because of the soil adjustment), which will deleverage Beanstalk and decrease the pod rate
    • image
  • Podline clearance analytics: https://dune.xyz/queries/483634
  • BIP-13
    • We realized that when soil is minimal, this may cause problems because the gas fee makes it not worth it to pay gas to take like 80 soil, so basically there are many seasons where there is effectively 0 soil
    • Under the current system these seasons will keep raising the weather because it reads that there is 0 sowing (even though this is just moreso a function of gas fees rather than true demand)
      • That means that even when p>1, no matter what the weather is getting raised because of this soil/gas problem
    • 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.
    • image
    • Making this change will push is in the right direction
    • The goal is to create an efficient market for soil. How can we measure soil properly? This is a tricky problem because there's a minimum threshold of available soil where it becomes not worth it to sow because of fees

“Hop in the Delorean with me and zoom forward 1 year. If you saw the market cap on Coingecko at $3.8B beans but you hadn’t yet been to bean.money, what would you expect the weather and debt level to be at? I’m curious how the deleveraging and massive growth would change the weather and debt level you’d expect. For reference that would put us at #34 in terms of Mcap, today”

  • It’s very hard to predict this
  • If Beanstalk grows to a $4bn supply, then this means ~1.9bn pods will be paid off. Given this, it would be unlikely that the debt level / pod rate would be high
    • In that case pod rate would probably be in single digit %s
  • Weather is very hard to predict given iterations on weather and it depends on so many variables

What happens to stalk and seed when someone exits the silo?

  • it’s hard to say what happens because it’s a little metaphsyical
    • At a technical/contract level: Beanstalk stores a map of a Silo member’s deposits by token address and season, and when you withdraw you are removing an entry from that map
    • Currently stalk is not yet liquid, it is simply an accounting item. There’s no token that actually needs to be burnt
  • Less-metaphysical, more practical answer: When you deposit in the silo, you receive stalk and seeds
    • Stalk grants you a % of seigniorage (new beans minted)
    • Seed grows stalk
    • When you withdraw from the silo you have to burn all the stalk, all the seeds, and all the stalk that grew from the seeds

Someone (https://youtu.be/XTzWmysOxKY) talked about possibly being able to deposit Convex tokens in the Silo and thus be able to earn both Convex emissions as well as stalk and seed. Would this indeed be possible?

  • Yes it would be possible.
  • The Silo would be able to support earning rewards from multiple protocols simultaneously while allowing you to also earn stalk and seeds
  • The product market fit for Beanstalk in Defi comes form this generalized silo mechanism
    • This distribution of minted beans to silo holders means Beanstalk is a positive carry stablecoin (holding beans earns your return), while collateralized stablecoins are negative carry (you incur an opportunity cost from not lending them out), which is where a lot of this product market fit comes from

What is FiatDAO?

  • FiatDAO facilitates the hedging of and borrowing against zero coupon bonds
  • Pods are basically a zero coupon bond without fixed maturity
  • Currently FiatDAO only supports zero coupon bonds with fixed maturity, but we are working with them to figure out how they can do this without fixed maturity
  • We are sending them a valuation methodology for pods, and once they approve that, then we can use FiatDAO to allow people to borrow against their Pods!

Transcript

so welcome everybody to beanstalk a t university number 15. uh we're glad that everybody can make it happy to have you here so um for those of you that are new join us for the first time this is essentially kind of a weekly ama that we have um i'm rex i'm the head of community here at beanstalk and uh with me as always is publius head of engineering and one of her and the founders of beanstalk and really this is just an opportunity for folks from the community to come in and ask questions and kind of have some free form conversation we try to keep it around an hour but we will go over if there's some really good discussion or some questions that are left to be answered i'm watching the class discussion i haven't seen a lot of stuff come in yet um if you have questions either you can drop them in that class discussion or if you want to raise your hand we can actually bring you up on stage more than happy to do that and let you ask your questions from up here actually there is kind of a question from nimzer and it's actually about events and really basically the question was hey are there um are there regular events that appear in the events section and i'll take that one quick just to say yes um so there are some kind of regular things that happen throughout the week for beanstalk and the two that are most common right now one is the one that your list the thing you're listening to right now so we've got a int university uh it's 7 30 p.m eastern eastern standard i'm not smart enough to do all the different time zones but i know where i'm sitting right now at 7 30. um so that is essentially every tuesday evening and then every thursday evening at 8 30 p.m eastern we've got the dao meeting and really that's a little bit more action-oriented usually the department heads come in and talk a little bit about what's going on in their department um and it's also an opportunity for folks from the community to ask some more pointed questions about specific projects or you know kind of talk about um you know more like update type things um so those are the two regular events that we have every week um we're also in the community group we're talking about doing things like um what we have kind of poorly named office hours and we're working out when we want to do that but basically just creating an open space on a regular time at regular times during the week probably a couple times during the week where folks can just kind of come in and ask questions um we realize that this setting with you know 26 30 folks might not always be the most comfortable to ask questions about like how do i use metamask or you know what is the difference between a bean and ether but we want to create a space where people can do that and have those questions we can have a lot of really good discussion about even some really basic topics we are working that out as we work that out that will go up in the events calendar as well so keep an eye out for that okay first question is from dumpling our head of operations so uh dumpling asks can you describe the crv cvx proposal where it stands and what to expect from it so not sure exactly what dumpling means by crv cvx proposal there's the curve gauge proposal which is currently live and then they're separately you know we're working to develop the integration for yield bearing tokens into the silo that would facilitate for example the deposit of convex bean three curve tokens in the silo once uh that the pool is added to the gauge so to talk a little bit about the gauge proposal we received some initial feedback which was great we responded to and then some follow-up questions and the the center of the follow-up questions were around the audit and particularly given all the novel code in beanstalk you know they were basically asking when is a public report going to be a public audit going to be live and when can we and would are we planning on waiting until uh they said a few but at least one i think uh public audit report is live and so with that in mind uh and especially given that the silo upgrade to support convex bean three curve for example which would be the main use case of once uh the the pool is added to the gauge that's still a couple weeks away there's no real reason in our opinion to push that proposal through and so the the question then becomes well how quickly can we get a public report out there from omnisha who's you know done their initial report already and we're in the process of finishing up some tweaks uh to send to them that reflect their audit and so i mean i would say at the short end maybe within a week we could expect the first public report from omnisha uh maybe two weeks is more realistic um but but the thing to comment is omnisha did audit a slightly older version of the code because we're constantly pushing so many bits and so accordingly the only thing that's a little tricky is the public report will ultimately be that they audited all of the code but it's only some of you know there's some new code as well and so the the that may still be a little bit uh imperfect from a like everything is audited perspective but at that point in time i think we'd probably be more comfortable charging ahead and trying to push through the curve gage proposal even if people are like we want more audits it's like yeah well you know within reason so the that's kind of the current status on the curve gauge proposal and then obviously the related convex uh or other yield uh yield bearing token integration into the silo uh that's that's also underway so all of all of this will hopefully be resolved uh not simultaneously but back to back to back over the next three to four weeks let's call it i appreciate that and i'll i'll follow up with a question that i think dumbling and i both have together could you just give a little bit of clarity on on what gauging is about how that process works and just give the give the room a little bit of sense of how that works and and what the advantages are if you're holding specific tokens okay so curve is a pretty sophisticated ecosystem and so we'll try to keep it somewhat simple but here's the high level so there are curve emissions uh crv token emissions that are distributed to various liquidity pools now those uh the spec the specific distribution of those crv rewards is determined by the curve gauge and so the gauge system refers to the distribution of crv rewards to different curve pools so what it means to be added to the gauge or to make a proposal for a pool to be added to the gauge simply means that people will be able to vote within the gauge system for your pool for for a given pool um to receive some of that gauge rewards and so the other side of this thing to briefly mention is well how does curve voting work so in order to vote uh you actually need to lock up your crv tokens at which point they become v-e-c-r-v vote escrow crv and v-e-c-r-v the effectively the strength of the vote within the gauge is dependent on the time lock on the ve crv and so you can lock your ve curve uh up to for for up to four years and the longer from when your ve curve unlocks uh the more voting power that you receive within the gauge system and so the that's the starting point now the the tricky part around curve is that they have a white list such that not uh most smart contracts cannot actually participate in the ve curve system and therefore there are only a few uh white listed smart contracts convex is among them and therefore what what has happened in practice is because convex is whitelisted on their uh on on the curved platform for the curve gauge basically other smart contracts have to interact with the curve gauge through and so that's where when people talk about the curve wars or the sophistication around curve gauge rewards that's because most smart contracts can't actually interact directly with the gauge because of the ve curve restriction and therefore uh everyone has to participate via secondary protocols like convex and convex has their own gauge system through which the whole convex system then votes into curve and so it's like a there's a market on convex uh to to figure out where uh all of the ve curve that convex controller should vote to allocate curve gauge and that ecosystem has layers and layers to it which are probably not beneficial to get into at the moment but that's that's you know the the intro to how curve works if you will i appreciate that and for anybody that's interested in learning a little bit more about this so i i myself was interested here let's say a couple more minutes a month ago or so um bankless actually has a really good episode on the curve wars and they talk through this process with some pretty significant detail in a way that i would say i'm going to say people like me could understand you know people that aren't you know extreme defy natives so worth worth reaching out and uh and tracking that podcast down very good explainer and i appreciate that information publius all right so um austin just dropped the link to the podcast how great is this community i'm thinking well i wish someone would drop the link it's boom just like that you know what you know what we ought to do though we should get our own podcast and we can have these same discussions and just wax eloquent you tell me time and place rex all right lots of good stuff uh questions starting to come into the class discussion next question uh is from the pharaoh and this is a this is a really good one it's one that we talk about a lot but it's always good to go back over so the pharaoh's question is um there are currently a little over 600 million pods in the pod line correct that would mean that the protocol is 600 million dollars in debt having 42 million dollars in supply wouldn't that debt-to-supply ratio indicate a dangerous situation and pharaoh's got a little bit more um written i'm gonna publish i'm gonna let you take that first part of that question though because i think there's a pretty good pretty good component to talk through there sure so your your analysis is totally correct that beanstalk has a lot of debt at the moment and i think in general it would be totally disingenuous to say that excessively high debt levels are not uh a dangerous situation ultimately when you have a credit-based model uh the debt level is a key indicator of the health of the system and so the fact that beanstalk has an incredibly high debt level is an indicator that the system isn't in the most healthy state that it could be in and so to answer you substantively let's analyze both the actual level of danger uh as we are able to based on market data and then talk a little bit about what the future looks like and how beanstalk may de-leverage so fundamentally beanstalk's pod rate the debt level has continued to rise over the past seven months since launch but noticeably or notably i should probably say notably the pod rate has really started to uh flatten significantly since around january 6th which uh basically coincided to when bip nine went live and so to give a little bit of context uh the last time being beanstalk went through a decent growth cycle which was around the end of november uh beanstalk had uh what we would what we would certainly argue is uh insufficiently uh accurately set soil parameters such that even during periods of time where beanstalk was paying off lots of debt uh and growing significantly the amount of soil it had the minimum soil parameter of beanstalk was way too high and accordingly and maybe just to give a little bit of context on why why beanstalk issues soil when the price is high and it's paying off debt so beanstalk every season changes the weather based on the t-wop uh the price of a bean over the previous hour the current pod rate the debt level of the system uh and then also the change in demand for soil from season to season and so in order to measure the change in demand for soil every season beanstalk needs to have some amount of soil outstanding such that it can measure demand for soil and originally the minimum soil was set as a percentage of the total bean supply and in short uh when beanstalk was growing and there was a ton of debt being paid off there was also excess amount of soil available and in short even though beanstalk paid off 20 plus million dollars of debt uh during during those two weeks or so while it was growing uh late november early december it actually ended that period of growth in an objectively worse situation than it it had been prior because the pod rate the debt level of the system the indicator of health was also higher than it was before it started and so you had this huge wave of demand and then you ultimately had uh the system was in a worse place than when it started which is not what you want at all and the result is that since then the pod rate has continued to increase significantly so uh the thing to note is that between vip six and bip nine uh is our belief that the soil parameters are set in a radically more efficient way at the moment uh to be specific in the case of when the price is above one uh beanstalk uh only issues the amount of soil at the start of each season such such that basically if it paid off 10 000 pods at the start of the season the most amount of pods it would be willing to issue during the season is 10 000 and so the the pod line the length of the pod line cannot increase uh when the price is above one and for consecutive seasons and they're even if there's excess demand for soil and in the in those seasons because the bean supply is increasing uh the supply is increasing and the amount of outstanding debt is staying constant the pod rate will start to decrease and so to answer a little bit about well is this a dangerous situation certainly it's dangerous because we'd much we'd much prefer beanstalk to have a much lower pod rate but in the grand scheme of things it's important to realize that under the new current parameters whenever beanstalk does go through its next growth cycle uh and when it did in november uh the bean supply went from 20 to 50. so it increased about 150 percent but let's say those supply just doubles uh if the supply doubles and the amount of debt outstanding stays constant the pod rate should get cut in half and if the padre gets cut in half that will even though it'll still have a very high debt level like 800 percent uh it will be significantly lower than the current debt level and that will be the the very beginning of a larger deleveraging of the ecosystem and so while it it's not necessarily reasonable to expect that entirety leveraging to happen all at once uh it's certainly reasonable to expect that as the bean supply continues to expand at some point that deleveraging will will occur the other thing that i would draw a little bit of attention to and this is both for the pharaoh and for anybody else that's having you know these thoughts or or questions about um the the number of pods really what publish is describing you can see if um if you're on the bean.money site and you look under analytics uh you go into the field and then look at pods underneath that you can see the curve of how of how pods accumulate and it's like the end of the first week in january when we start to kind of flatten out and there's still an increase after that time periods like you know january 7th or 8th um that curve starts to to really flatten out the number of pods still increases but it increases at a much more reasonable level and i would say that's much more in line with what um with what the protocol or what what we want to see rather than as public was describing earlier you know you look a little bit further back in time especially starting like mid-november and you see those really steep increases in number of pods you know really the the protocol health as of now january 8th on is probably a little bit better of a of a of a gauge of what the current state is yeah the only thing we would we would just uh comment is that there is a a slight difference between pods and the pod rate so pods are like the absolute amount of outstanding debt whereas the pod rate is a function of the bean supply now because the bean supply hasn't really changed over the past two months uh they look pretty similar but i think the absolute amount of pods is less helpful as an indicator of the health of the system as much as the pod rate is just that's that's a the pod rate just to clarify is the it's the ratio of beanstalk's outstanding debt to the total supply uh and i just wanted to say like related to this question i just added a chart to the dune dashboard today it's in the uh the fields section and it's called bead and pod line clearance so what it does is it shows you both the current market cap and at each point in time for market cap the market cap required to clear the pod line um and also the percentage increase required in market capitalization to clear the full pod line so if you want some specific numbers and you want to see how these have evolved over time you can check out that section of the dashboard to provide a little bit more color to i guess this topic you um want to drop the link to the dune dashboard in the class discussion i see awesome yeah see we've always dropped a screenshot then austin did too yeah drop that link because actually while you were talking i actually went to the doing dashboard quick to look and see what you're talking about it's really that's really really interesting stuff yeah it took me like five minutes to put together so i don't know why it wasn't there before but there was some discussion going on in questions today and that kind of inspired me to put that there um but yeah again it is in the field section of the dashboard it took you like five minutes because you're a wizard i like i mean i've also i've also built a lot of basic data tables so now when i have questions like these to answer the tables are already built out um if i was working with like raw data then yeah it would have definitely taken longer but if you look at the query like it's very short that's awesome you appreciate it i also appreciate being called a wizard too so like straight up hat staff that shoots lightning that's that's that's what i'm seeing in my mind and spike spiegel in fact in the hat exactly the wizard hat is cut out of the frame but it's it's there on his head all right okay so um skimming down always down to stroke tbx ego a little bit that you know what it's it's time well spent thank you the analytics are a plus agreed so um looking through looking through so i guess also just while we have 10 seconds if people want to raise their hand too they can also just always hop up here if people want to ask a question as well completely agreed and i'm looking through um the rest of what the pharaoh wrote and i think i think what you walk through publicly is probably covered all of it but i will throw that on on my lap um the pharaoh if if there's something that that you don't feel like was covered drop it into the chat i will be happy to to cover it more explicitly or go over it again or or re-ask a question happy to do that well well i do see their question and i think maybe just to answer the second part which is slightly different which is how will the protocol continue incentivizing creditors to supply beans and purchase debt as the waiting queue continues to grow especially considering the current ratio would suggest that this difference will increase not decrease so the the key thing to note is that the currently and again this could change at any moment for a variety of circumstances but currently there does seem to be demand for soil at roughly the current weather such that beanstalk can attract enough uh lenders and so while there's no reason to necessarily expect that to continue other than the track record that beanstalk has continued to attract creditors in the case where beanstalk can't attract creditors at a given weather it will continue to raise the weather until it has found an interest rate that it can attract creditors and so the way beanstalk works fundamentally is if there's no one that's willing to lend to it it can just continue to raise the weather until it finds someone that does now it seems to be at a weather range roughly where there is sufficient demand for soil um and i would argue uh given what we said earlier about the expectation that at some point the pod rate starts to decrease uh you know that that would probably be the thing where sustainability comes from so uh you know just want to make sure that we're doing our best to answer your questions but again as rex said if we didn't feel free to type out whatever i appreciate and i appreciate you following up on that publish that's uh that's definitely a good get it's a team effort indeed indeed all right um actually you know what it's probably i'll i'll ask a question quick i i saw j dubs pop up and then hop down i will i will get you i promise um but since we're talking about things like weather rate um publish you want to talk just quickly about bip13 sure so bip13 seems to have uh be doing pretty well uh it's at almost a majority i think yeah 44 uh it's got over three days left and so that looks like so far it's gonna continue to um like it looks like it's gonna continue to accrue votes and pass hopefully now to speak substantively about it we we spoke about it last class uh particularly uh to to kind of introduce that this was likely going to get proposed uh the the weather changes have been something that's been much discussed about and it's actually a nice segue from the previous comment we were making to pharaoh which is well beanstalk will continue to raise the weather to find creditors but there's a problem at the moment which is uh a result of the efficiency changes that were made to the soil in dip six and dip nine uh such that there's not enough soil available most seasons uh for anyone to sew at most seasons particularly after the price was above one so let's say ten thousand pods have harvested uh there may only be a little over a hundred soil during that season or during the following season excuse me and uh the the issue with that is when you consider eath gas fees you're gonna pay forty dollars to lend 100 beans to beanstalk that's not necessarily cost effective and so we have lots of seasons where there's basically no effectively no soil uh available but if there if any time you have a season where there's significant soil then there's demand for soil and the problem is that uh under the current system beanstalk views seasons where there's zero being sown even if there's only 40 soil available it views that as decreasing demand and so what these weather changes or weather change it's only a single weather change uh addresses is that in the particular case where the price is too high and demand for soil is decreasing uh the only uh weather change in in that circumstance where the the weather was raising or being increased at the moment uh was when there's excessively high debt which makes sense because beanstalk tries to be as conservative as possible in the sense of it would much rather raise the weather too high to attract sufficient demand for soil than not attract enough demand for soil so it would rather raise the weather as opposed to not it would rather be conservative and overpay slightly um maybe you could say that's aggressive depending on how you want to slice it but in either case uh beanstalk basically went after a season where the price was above one when you have 40 soil or 100 soil or less uh beans no beans are being sown and bean stock then is raising the weather and so you have this weird edge case which is getting hit constantly where the price is above one and then the next season no matter what the weather is going to get raised and that's obviously sub-optimal so we are spending a lot of time and brainpower trying to figure out a a a long-term solution to measure demand for soil in a way that is accurate uh and in line with the new soil parameters but frankly it's a non-trivial problem because how do you define that minimum below which it's not cost effective to sell like that's an arbitrary thing to define and furthermore once you define it everyone can game the system and so 0.1 or 0.0001 less than whatever that threshold is to still have beanstalk considered decreasing demand and accordingly it's not so simple to figure out what's the best way to measure demand for soil in an accurate way so given that it seems like it's going to be a little bit more time before we have a good solution here uh even though to date we really haven't uh we we've been strongly against i wouldn't say vehemently against but strongly against i almost said vehement strongly against uh making any sort of short-term changes or fixes to the protocol in this case changing a one to a zero to address a very obvious inefficiency in the current model seems like a reasonable step to take even as a short-term fix given that at the moment beanstalk is attracting creditors in the current weather range uh is doing a decent job of maintaining peg stability uh even with heath down below 2600 and accordingly you know even though beanstalk would rather be more conservative and pay slightly higher that doesn't mean that it should raise the weather in this circumstance and so this weather change adjusts that effect in practice will basically address that one circumstance and until we have a more refined method to measure demand for soil and affect the weather changes this seems like a good intermediate step so that that's a little bit about bip 13 and uh for those of you that have not voted you know we would we would encourage you to go take a look at the bit great information definitely appreciate it i've got a little feedback from uh from pharaoh says uh loves the transparency the whole system is complex and the code is rather genius publius not bad um and uh just uh is is appreciative of the work that's been put in so it sounds like we've gotten gotten those questions answered always happy to do so well and and particularly the thing that they highlighted was that the the whole system has fully decentralized governance implemented across the whole protocol we have to give all the credit there to nick mudge who created 2535 which really the diamond standard is what facilitates a lot of so uh we we really do feel like we're just uh one brick uh in the in the group of people that are building uh the decentralized future so uh just just grateful for all this other cool tech that we can we can leverage and help build on top all right next in the chat dumpling so uh dumpling says boob lace and rex hop in the delorean with me and zoom forward one year i'm trying to think if the delorean had more than two seats it might have been a two-seater when you got mr fusion in the back anyway yeah i think i think at the end of uh isn't it the end of back to the future one marty doc and the girlfriend are in the car or is it just marty and doc yeah i think all three of them i think all three yeah because it gets crowded when he puts mr fusion in but yeah during the first movie i think all three of them fed anyway geez we're way off the way off the uh the trail here we don't claim not to be nerves here guys just for full disclosure that's not one of our claims we make you gotta you gotta own it um so if you saw the market cap on coingecko at 3.8 billion beans or dollars worth of beans but you hadn't yet been to bean.money what would you expect the weather and debt level to be at so in other words fast forward one year we're at a 3.8 billion dollar market cap on coingecko what would you think when when all this settles out when we de-leverage when we move into what's considered or what we might consider kind of a normal operation with the protocol humming what would you expect the what would you expect the weather in that level to look like so frankly it's almost impossible to give a good answer uh but i will try so let's say beanstalk grows to a four billion dollar supply that means that uh at likely and this is a maximum but it's likely that it will be close to this because of the amount of outstanding debt half of the new beans minted so 1.9 billion beans will go to paying off pods in this scenario so frankly it's hard to imagine that under the new parameters if 1.9 billion pods have been paid off over the next year that beanstalk will have a very high debt level um as a as a function of like the pod rate so the the debt level is likely to be significantly lower uh it's very hard to speak at about the length of the pod line in that case because again the pod line doesn't necessarily ever get any shorter if there's always demand for soil the pipeline should always stay the same length it shouldn't necessarily get shorter and so the pod line may be a billion long in which case you'd be at a 25 debt debt ratio you could be at a 2 billion pod rate you know or pot you know you could have 2 billion pods and a 50 pod rate um that puts it at single digit percent um so i think if we're at 3.8 billion beans it's likely to be single digit percent now let's say beanstalk rose to 3.8 billion in the next two months again not financial advice just playing through a theoretical scenario and then it it grows further to 10 billion and then crashes 3.8 billion well that would be a radically different scenario right we're now being starting to remove seven billion beans from the supply and then it could end up issuing 10 billion dollars of debt in which case or 50 billion dollars of debt in which case the pod rate may go back up to a thousand right we could see a scenario where the pod rate goes as low as 10 and then back up to a thousand percent so there's a lot of flexibility within uh that that that scenario dumpling laid out around the pod right and that's why it's very uh that's why it's very difficult to to estimate now with regards to the weather uh that's even tougher to say because how the weather will change is basically a function of demand for soil and so if we play out that there's long periods of time where there's extensive demand for soil uh it honestly depends on whether or not what like what the new measurement of demand for soil looks like and therefore it's hard to predict how quickly the weather would decrease in those scenarios but uh you know beanstalk has been alive for seven months and the weather is basically seven thousand percent so uh if you assume when it's growing uh you know it may take a couple of months of growth consider consistent growth to decrease the weather to back to the low thousands or high hundreds uh i i don't necessarily know uh whether the weather is going to be come all the way down when beanstalk deleverages to 10 or whether the fact that it decreases slowly enough that it may never get all the way back down and then whenever you know there's too many variables to make a real prediction like this but hopefully my rambling was instructive as to how it might be constructive to think about a problem like this fair enough sounds like there are a lot of variables involved all right so j dubs i had you'd been up a minute ago and hop back down you want to hop back up and ask a question there he is hey guys actually i was going to ask a question uh that publius basically addressed before about credit-based systems so uh that's why i popped off he was actually answering it while i was going to ask so i think that's evidence we talked too much gotta cover all the bases got credit based systems and a debate about the back seats and the delorean all right um so i'm not seeing any more questions in the chat right now um does anybody else want to hop up on stage jay dubs go ahead uh yep yes i'll ask a question actually somebody uh new to the uh new to the community popped a question in the other day uh which i thought was really good that i actually embarrassed they didn't know the answer to um so quickly can you talk a little bit more what happens with stock and seeds right now uh when someone exits their silent position uh and yeah what happens to the stalking seats so when you say what happens it's hard to say what happens because it's a little bit metaphysical in the sense that uh you're i mean to get into the nitty-gritty beanstalk stores a map of a silo member's deposits by token address by season and in short when you withdraw from the silo you're removing a deposit from that map and so like in practice to give you the technical answer before i give you the non-technical answer nothing is really happening when you withdraw other than uh an entry is being moved uh from your list of deposits to your uh list of withdrawals in practice uh it's not technically a list but um that's that's what's happening at the contract level now that's primarily a function of the fact that stock is not liquid so there's no token that actually needs to get burnt at the moment stock is just an accounting item that the user interface can display and calculate based on the current state of your deposits for example or the dune analytics uh dashboard can do a similar thing so to give you the non-technical answer what's happening with your stock and your seeds so when you deposit assets in the silo you receive stock and you receive seeds based on the bean denominated value of the assets that you deposit and the stock entitles you to bean senior rich new beans that are minted the seeds entitle you to new stock over time so neither neither stock nor seeds are currently liquid the expectation is that stock will become liquid in the not too distant future whereas seeds are less likely to become uh the seeds are less likely to become liquid and so in short when you when you when you withdraw from the silo you are you have to take all of the stock all of the seeds and all of the stock from the seeds that you accrued for your given deposit because stock grows from seeds over time at the longer you're deposited in the silo you have to forfeit all of the stock and all of the seeds associated with uh and so uh in short that's you know that's what's happening uh in a practical level you're you're electing to burn all of your stock all of your seeds and all the stock that has grown from your seeds uh in order to withdraw your assets from the silo great thank you so i want to riff on that for just a second to kind of go back to something we were talking about earlier so we're talking about things like curve gauges and convex tokens um there was someone that put out a youtube video just today dumpling references that i can't remember the name of the individual man it's i'm kicking myself i should know it anyway so um the the premise of this youtube video or at least part of it i've talked about how theoretically in the future someone may be able to do to deposit convex tokens into the silo and certainly you can stop me if i'm getting off track here deposit convex tokens into the silo be able to realize the emissions associated with those convex tokens and stock and seed benefits as well is that is that correct am i on the right path so so the short answer is yes one of the next upgrades to the silo that beanstalk farms will hopefully propose in the not too distant future will facilitate earning interest not just from beanstalk but also from other protocols so currently if you deposit an asset in the silo and that asset has some sort of yield bearing asset aspect to it in practice because the assets are owned by the silo on the ethereum blockchain they're they're currently uh in in the smart contract the the beanstalk contract itself will be the the thing that accrues the rewards and the thing that beanstalk needs to be upgraded to support is the accounting of those rewards to efficiently distribute them to the people that actually earn those rewards if that makes sense and so what the silo will be able to do in a general way is support earning rewards from multiple protocols simultaneously in addition to beanstalk so an example is let's say there's a frax bean pool on curve and there's curve gauge and fxs gauge rewards being distributed to this lp pool or lp tokens uh you you would be able to deposit those lp tokens in the silo continue to earn continue to earn your fxs rewards uh if you're doing it via convex you'd actually be depositing convex bean fracks into the silo you would then also receive boosted crv rewards uh via convex and so the idea is that uh that's just one example but you can see how you can start to receive multiple yield generating revenue streams i guess just a revenue stream uh from different protocols all within the silo [Music] and so what what it seems like is happening over time is as people become more imaginative with how they want to kind of layer those benefits that will lead to greater incentive to put wider varieties of more complex assets into the silo that in turn bolsters the silo itself creates stability within the protocol and then multiplies the advantages of whatever those tokens are by including those stock and seed benefits right so totally right and to expand on that a little bit more the product market fit for beans within the like where where can you use beans well you can deposit them in the silo and that's cool but the product market fit for beanstalk and for beans within d5 at large comes from the generalized silo and the fact that you like what do you actually want to trade against if you're cryptocurrency a right you want to trade against something that is stable and has really low borrowing costs because if you're trading against usdc and usdc has 10 borrowing costs well guess what buddy you're paying for that like you are paying that implicitly because you're trading against a coin with a negative 10 percent carrying and so anyone that's providing lp has to get compensated in some way for the fact a negative 10 yielding stable to provide liquidity that stinks so beans have the opposite situation they're positive yielding you can leave your beans in the silo convert them to liquidity against other tokens earn a higher rate of beanstalk native reward and and that is where product market fit ultimately comes from and so you have all these beans in the silo that are looking for to provide liquidity are looking to start trading against other tokens and so that's where this generalized silo starts to get really exciting is you're going to have all these other tokens that at some point realize they want to be trading against beans and the way to get trading against beans and trading against a lot of you have a lot of liquidity is you need your pool to be added to the beanstalk uh silo it needs to be white listed in the silo and so that's why defining a process for beyond just a bit right bips are pretty intensive so that's why it's interesting to move to more of a gauge system that allows uh people and and groups to propose adding different uh assets uh to to the white list uh in a much more modular fashion necessarily a 50 vote in favor so uh still thinking exactly about how they work but uh you can see how making that as modular and flexible as pos benefit beanstalk completely agreed oh and before i forget so dumpling dropped the right information in cesar snack sandwich is the uh the gentleman that that just put out that um that youtube video about the curve gauge explainer and he also dropped the link in the class discussion so anybody that's interested can follow that link and watch the video it was good i thought it was pretty informative i learned a little bit myself so um anybody else have any questions i have one more if no one else does i want to invite anybody that's interested first though whoa dumpling is there there's an emoji or a reaction emoji in in discord that is a dumpling that's fantastic yeah we're going to start trolling you with that dumpling no matter what you say you're only going to get a dumpling it's completely uh sentiment neutral you know exactly it's just an app we've seen your message yeah or or the word okay ah that's great um so i will uh i will i'll throw this question over to you publius and um we'll leave it open for for more folks we still have a few minutes um but so i guess was last week um we had a twitter space with fiat dao um we want to talk for just a minute about what that project is and what they're looking to do and and how that relates to the pod marketplace and want to run through that sure so fiat is super cool they are a protocol that is facilitating uh the hedging of and borrowing against zero coupon bonds which are a bond that doesn't have any yield associated and pods fit into that category because once you get your pods the pods don't uh earn any additional yield it's only earned at the time you lend to beanstalk and pods don't have a fixed maturity which does add some level of complexity to the integration with fiat dow because their original version only supports zero coupon bonds with a fixed maturity date but in short we were able to work through with them how a system might work where uh you would be able to borrow against your pods and effectively mint fiat token uh which is that the fiat dow uh stable coin which isn't tightly pegged it's loosely pegged to a dollar which is i mean you guys know us we're big fans of loosely pegged uh as opposed to making an explicit peg so i think that model is pretty cool too and the idea is that you're effectively once we are able to come up with uh a reasonable proposal for them on how to value pods effectively um which which uh tbik uh is working on uh an analysis of some of the data from the pod marketplace uh to to provide some of those uh data points to them uh once they kind of green light our proposed valuation methodology for pods uh it seems like it's kind of all systems go things to move forward such that in the not too distant future people will be able to actually borrow against their pawns so i want to take that idea and kind of layer it in with some of the uh the chatter that i've been watching on twitter over the last couple days so we've got this this concept that you just walked through probably it's about what fiat dao is trying to do and the same time i've been watching omi's on twitter starting to blow up about leveraging the pod marketplace for arbitrage opportunity and i feel like there's almost like these those those two concepts fit together potentially very very well especially if you've got if you got the beans to to get levered on fiat dow bonds and use that for arbitrage i mean you could there's there's some potential to really make some some real good moves if you're if you're able to watch and and kind of utilize and take advantage of some of those inefficiencies and um yeah it seems like those those those ideas of arbitraging in the pod marketplace and the fiat zero coupon bonds could work together really well well this is the thing that's so exciting to see right ultimately beanstalk is designed in a way where independent market participants who are all acting in their own self-interest ultimately contribute to the success of the like that's that's the goal and it's really cool to see and practice something that was created by the community like the farmers market serving such a pivotal role in the the having different participants get involved in their own independent exposure to beanstalk that ultimately contributes to peg maintenance and that's really cool could not agree more it's funny um i feel like when we use the term arbitrage in in trad fire traditional finance he usually has a negative connotation you know it's that swashbuckler you know profit taker um you know i admittedly i live in the world of commodities so i think you know the the commodity trader that's making deals that would make your stomach turn but here in situations like this you just said it i mean it's a real way to facilitate peg maintenance and really build a more robust system in the process this is uh the beginning of the debt market starting to become you know ultimately it's still not there yet but uh in the in the not too distant future uh day by day it's gonna at some point it's it we're gonna blink and it's gonna be like whoa when did this when did this actually start to afford a real curve you know when when did that happen uh when did when did that order book actually fill in so uh it's starting to happen yep indeed all right we got three minutes left we have enough time for one more question from the crowd one more question in the chat if someone feels so interested anything before we let everybody go and if not you know we would just use this opportunity to pull bean tovan up here and maybe uh oh oh yeah get us through the jig oh yes he's in the crap no no pressure bean tovan no pressure whatsoever he's got his hand raised i'm i'm a noob here i'm gonna try to see i'm with you austin that also sounds like pressure to me as well uh yeah there we go come on up there he is tuning his utar no doubt we'll we'll give them oh he's ready the microscope is ready oh maybe not he hit yet with the head face what's up bean tobin see we gotta we have to be more purposeful for being tough and we gotta like we gotta warn him because i think he's i don't know i feel like i feel like i don't know this is uh you know this is i i i just assume bean tovan like a guitar on his back that's exactly what's going through my mind like he's like rushing around a room like throwing guitar cases open grabbing whatever he can he's like got a harmonica somewhere that's like the only thing in arm's reach yeah we we i think we scared them off officially we've offended bean coven apologies beantovan oh man so much fun good times all right well so i think what we will do is um i think we'll oh he's back come on bean tubbing lay it on us you can turn on participation builds this is like a good concert everyone's waiting when's the artist going that's right we're just the opening knack publius people are here to see mean double i sure hope so i hope you all aren't here to hear us oh i can see it okay so be doing says sorry all discord hates me but not as much as i love you all that's very kind of you we can we can yeah we can we can we hey no pressure no pressure it's it's all good don't pull your hair out being totally that's right live another day all right we will call it a night um as always always appreciate everyone's time all the good questions all the good conversation um we will plan to meet back here in a week um like i said earlier on we're we'll have the dow meeting coming up on thursday night as well at 8 30 eastern and um as always i think you can find us in discord chat and on twitter and uh yeah thanks again everybody for your time have a good night thanks everyone you