Beanstalk University Class #20

Beanstalk University Class #20

April 12, 2022

0:00 Is supply shortage of stablecoins a short term problem? • 6:03 TWAP vs. Chainlink oracle • 8:36 How will generalized minting work? • 11:40 Introducing generalized convert first • 13:58 Will peg maintenance be better post-generalizing minting? • 16:30 How will Beanstalk attract creditors when the Weather lowers? • 18:37 Should the length of the Pod Line change? • 21:55 More on generalized minting and peg stability • 26:45 Curve gauge and bribes • 28:25 Stalk gauge system • 32:38 Concerns about peg stability • 38:50 Multisig questions • 41:05 Convex integration • 43:08 LUSD pool delta Bean • 46:38 Will Beanstalk use an AMO? • 47:54 What happens to Grown Stalk when you withdraw? • 49:30 More on AMOs • 51:08 Plans to acquire CVX • 52:48 Upcoming integrations • 53:50 What is Publius' background?

Beanstalk University




In this week’s AMA, we cover:

  • More on generalized minting/convert
  • Publius’ comments on the current growth cycle
  • The importance of the Pod Rate
  • What a Stalk Gauge system might look like
  • The multi-sig setup
  • and more...

AMA Questions

Is the supply shortage of collateral for stablecoins a short term issue as more capital flows in DeFi?

  • In short, no. There won’t ever be enough collateral to solve the negative carry costs of holding of stables. When you lock up billions of capital as collateral there’s a huge opportunity cost associated with that. That is a structural issue of locking up capital, or having collateral.
  • Even if the underlying capital is earning yield, if you are talking about on the order of trillions of dollars of capital, it’s impossible in effect. There’s no such yield opportunity.

Why use a TWAP oracle rather than a Chainlink oracle, and how is the protocol not susceptible to flash loan attacks

  • We don’t believe Chainlink is sufficiently decentralized for Beanstalk.
  • A flash loan requires that the money you borrow be returned in the same transaction. Because the TWAP takes into account every second of the price, the flash loan has no effect on the TWAP because it was instantaneous because it happened within 1 second.
  • If anyone has proposals for a more decentralized oracle, we would be happy to hear! Always looking for better solutions than the USDC/ETH Uniswap pool.

How would generalized minting work with the variance in deltas between the Uniswap and Curve pool?

  • The goal is to propose a BIP for generalized minting/convert in the next 10 days or so. This will mean Beanstalk will mint according to the average excess Beans over the last hour for both the Uniswap pool and Curve pool.
  • At $1.04 on Uniswap there is currently an excess of 400k Beans, at $1.04 on Curve there is currently an excess of 4M Beans.
  • If you start minting 4M Beans every hour and people aren’t at there wallets to sell, you might end up flooding the market with Beans. Perhaps there’s some sort of slow ramp up period to account for that.

Would it make sense to introduce generalized convert first, before generalized minting?

  • Right now that probably wouldn’t do much because the prices are so similar. But generalized convert would help if Curve pool price dipped below $1 for example. But it’s an interesting idea. We could also start with only minting some % of the Curve pool surplus and ramp it up with time, like the A parameter in Curve.

We are currently seeing enormous demand for Bean currently, is the reason that the current price is above peg because only the ETH:BEAN pool can mint new supply to bring the peg back to $1? Will generalized minting that allows other Pools to mint mean that Peg maintenance will be easier when Bean experiences high demand?

  • In short, yes. There is excess demand for Beans and people are willing to pay above $1 because they think Beanstalk will mint more than whatever they will lose. That’s effectively inorganic demand. Generalized minting should stop that in large part, in theory.
  • The fact that Uniswap uses a constant product, in addition to ETH volatility, makes it such that Beanstalk can’t really mint that many Beans according to the Uniswap pool.

Question: Beanstalk has been attracting creditors because of the high returns... after that stage, what is strength/tool that beanstalk will offer to attract people... in other words what is the final product?

  • Beanstalk will always offer a sufficiently high Weather to attract creditors. That is how it maintains price stability.
  • As far as where Beanstalk is headed — Beans may be one of the most attractive assets for other assets to trade against. Depositing in the Silo is what facilitates the positive carry. Eventually we want other yield generating assets to be depositable in the Silo as well. Eventually there will be a Stalk Gauge system as well.

My question was about increased soil as our new bean prints go higher. There was a lot of talk in the Econ section this week about this. Wouldn't it help us deleverage quicker if we didn't increase the soil beyond a trivial amount (to gauge demand) when we are above peg?

  • So if Beanstalk is paying off debt, Beanstalk still issues Soil to measure measure deamnd for Soil. It currently issues enough Soil at the current Weather to keep the number of outstanding Pods the same.
  • The elegance in maintaining the same amount of Pods is that you can see whether people are willing to take the same place in line at the same or lower interest rates (the Weather). That’s a great way to take consistent market data.
  • Beanstalk doesn’t really care about how many Pods there are, it cares about the Pod Rate.

As great as the prints are recently, how can you make bean more ape proof? The ape thought process seems to be that it is okay to buy at $1.04 as I can make that up in a couple of days of good printing. Do you think generalized minting is sufficient? If not, thoughts on incentivizing sell pressure during positive de-peg?

  • We think generalized minting will help remove short term inorganic demand. The only thing that’ll happen when Bean keeps trading above peg, is that the Pod Rate is going to decrease dramatically. The health of the system improves very quickly. Pod Rate has dropped from 1580% to under 1100%. As long as its deleveraging its mostly OK. Convert also helps to arb this higher price.

Can you explain generalized minting and generalized convert?

  • Generalized convert is the ability convert your Silo Deposits not just from Bean to Bean:ETH LP, but between any pools.
  • Generalized minting is when Beanstalk will take into account the Curve pool into the Bean/Soil minting schedule as well as Uniswap.

Curve gauge is going live soon (or already live) how are we thinking about bribes and what is the timeline on that?

  • Bribes are unsustainable, but it may make sense to acquire sufficient CVX, to stake and lock in the minimum vote amount and guarantee Guage rewards. It would cost around $1.5M right now.
  • The thought is that Bean Sprout could mint Beans to sell into Convex to facilitate participation in the Curve Gauge system via Convex

Can Publius pontificate a bit on what the Beanstalk Gauge system would look like? What exactly would protocols be trying to do, obtain votes to get whitelisted in the Silo for example?

  • Two parts—getting whitelisted for any gauge, and the second is to receive gauge.
  • Bean deposits receive the lowest amount of Stalk over time.
  • If you’re whitelisted, particularly when the Silo supports yield from other protocols, there’s no reason to say the minimum Seeds is 2. It could be less.
  • There will be some maximum of Stalk ber BDV, probably 4.

How do you scale the voting of allotting Stalk per BDV to different pools? Per a gauge system, rather than BIPs.

  • We don’t want to create a gauge system that results in centralization of Stalk either.

Are you worried about peg stability after this growth cycle? Or will this be different than last one due to new mechanism / BIPs / more liquidity etc.

  • At some point this positive feedback loop will end. The hope is that the Pod Rate will drop sufficiently such that people are willing to lend if we spend time at P < 1 again.
  • It’ll be interesting to see if there’s sidelined demand that will only buy in at $1 or less.
  • The system is in the best position its been in since launch.

Currently the optimal pod rate is set at 15%. Is there discussion on adjusting this number? Seems like if bean can attract creditors at 1200%, Beanstalk could increase the optimal number.

  • The optimal Pod Rate doesn’t really matter. From a theoretical perspective, 15% is a reasonable debt level. Even if it can survive at 1200%, there’s no reason for it to stay there. Maintaining a low healthy Pod Rate is what Beanstalk should try to do.

Can you talk about what protections are internally in place to make sure the multisig cannot be compromised? more broadly, is there any key man risk that could result in a disaster situation?

  • The Beanstalk Farms and Bean Sprout multi sigs are pretty simple, approving a txn requires a majority of keys and people are pretty accessible. Publius holds a minority number of keys in both.
  • the wallet with ownership of the contract, that is distributed across 3 hardware wallets that Publius, with a lot of effort, has access to. From a key man risk perspective, it wouldn’t be great for Beanstalk if Publius disappeared as Beanstalk Farms is not quite ready to operate without them.

With convex rewards, if you are a part of the CRV pool and then staked in CVX, are you thinking that you would be able to stake your CVX-staked tokens back in Bean Protocol OR would you be sacrificing the bean protocol yield?

  • In the future you will be able to deposit your cxvBEAN:3CRV. Hopefully soon you’ll be able to deposit yield bearing assets in the Silo soon.

How did you solve the delta excess of Beans in the LUSD pool? (This was in progress for a couple weeks)

  • The math proved to be extremely challenging algebraically. We instead used a Newtonian estimation.

Will you utilize AMO to mint more BEAN and help with the peg?

  • No Beanstalk doesn’t have an AMO (algorithmic market operations) and doesn’t perform any market operations outside of a Season of Plenty.

What happens to Grown Stalk when you withdraw?

  • You forfeit your Stalk, Seeds, and Grown Stalk from your Seeds when you withdraw. This creates the opportunity cost to leaving the Silo.

Will AMOs (whether it is for seeding lending pools with BEAN or to strengthen the peg) ever be considered at some point in the future?

  • That’s one of the main structures that Bean Sprout can facilitate. To seed pools and such.
  • We don’t want the protocol to ever have a treasury or be responsible for doing that stuff.

Are there any plans for the protocol to acquire Convex? If so, what would be the mechanism? Same as fundraising for Audit?

  • We don’t want Beanstalk to hold CVX as a protocol. Previously Fundraisers were there because we didn’t want budget Beans to be sold and create sell pressure. It may make sense to just mint the Beans (via Bean Sprout) and sell the Beans above a dollar.

What are some of the additional partnerships in the pipeline?

  • We don’t like the word partnerships, we call them integrations. The goal is to have many liquidity pools with other protocols integrated into the Silo.

Without compromising your anonymity, is there any other info you can give regarding the backgrounds of the team?

  • The team is pretty diverse at this point, there’s 50+ people working on Beanstalk.
  • We’ll refrain from saying much about ourselves other than we were a group of friends in college and have been in crypto for 5-6 years now. That’s what we are comfortable sharing but hopefully that’s sufficient.


um so to play devil's advocate here one of the foundational or i guess like inspired reasons for creating bean stock was to create a no collateral stable coin and the rationale is that there's a supply side shortage of stable coin collateral um and i feel like some people might argue that that is more of a a short-term issue that could be resolved as more and more capital flows into the space and the net value of collateral within the deep ecosystem oh sorry sorry i just got a call one sec let me eat that i almost got through my question okay uh yeah but i think that kind of wraps up my question so um does that make sense yeah so just to restate is is at some point they're gonna be enough enough bilateral of whether on-chain or option to meet demand for stable coins and the short answer is no because inherently or at least enough supply to ever solve the negative carry costs the answer is no any time that you're locking up capital especially in the on the order of hundreds of billions or trillions of dollars of capital there's opportunity cost associated with locking up their capital you're going to lock up all those dollars and then just do nothing with them except issue dollars against them like there's a huge opportunity cost associated with that and so in practice like the very nature of collateralized stable coins is such that there's a an implicit requirement or an expectation of some sort of base yield and so there's an argument to be made that that's one of the reasons why uh we're seeing the supply kind of remain so such that there's high lending or high borrowing costs to fund that if that makes sense it's kind of a cash 22. if they meant too quickly to drive borrowing costs to zero then they're not going to be able to incentivize people to lock up money so it's like there's this behavioral issue which causes a shortage of stable coins to be minted and then there's also the structural issue if you're never going to solve the negative carry cost if you have to lock up capital and arguably the more capital you have to lock up the worse the negative carry costs get because the bigger the opportunity cost yeah yeah that makes sense um i guess one follow-up to that is that i think there's some systems out there that put the capital kind of underlying underlying the stable coin to work um through some yield bearing strategy i'm sure it varies a lot from use case to use case but um do you have a counter argument to collateral that is somehow earning yield well you can earn some yield but at the end of the day i mean we're work and maybe it's changing over the short term but certainly in terms of real rates we're in a negative rate environment and so the idea that you're going to be able to pay for locking up a large amount of capital through some sort of yield strategy on the order of trillions of dollars it's it's impossible effectively it does there's no there's no such opportunity gotcha well thanks thanks for answering the question dumpling you had the question hold on hold on uh mom someone's talking who was talking k roomie were you talking and we can't hear them mod can't hear and mods also in a chair [Music] can you change chairs try changing chairs so um if you like i can hop in quick actually well i mean mod just said it so dumpling you want to go through your question quick while we've got a moment k romy's back i think oh okay oh it says they're connected nevermind what's going on anyone hear anything so i can hear you both of you i heard romy can you guys hear me could you hear romy's question just now yep no could not [Music] so for those of you who have sat through um amts that's usually how how we go through things anyways folks a lot of folks choose to put things in the chat i get to read them and sound smart so i'm more than happy to do that this time too um so iron cac asks can the team go into why they use a t-wap oracle and not a chain-link oracle and why the protocol isn't susceptible to flash loan type attacks you want to take this one boobs or should i happy too um you know kind of in short we don't feel like chain link is sufficiently decentralized for bean stock the time weighted average price mechanism takes the average price weighted over the entire season so in order for someone to successfully execute a flash loan against beanstalk first of all a flash loan requires that the money that you borrow be returned back in the same transaction so example you take a flash loan from ave you borrow you know some ether mave you buy beans in the beneath unit swap pool at the end of the transaction you're required to return that each so in some way you essentially have to sell those beans back such that you can return them to ave because the t-wop counts every second as a part of the average price the flash loan in effect had no um effect on the t-wap because it was instantaneous there were no there was no actual time past where the price was incredibly high due to the buy of the flashlight now it's important to note that you know we don't necessarily think the t-wop of the beanie the swat v2 pair is the best on chain oracle that is the most essentialized for beanstalk and you know we're constantly looking to innovate on our oracle solution and you know as being stock continues to grow you know if anyone has a proposal for a more efficient on-chain um you know decentralized price orbital for eth we'd be happy to you know hear out the uh argument but the main thing is that it's on chain data in addition to like why not chain link it's on chain data directly that beanstalk uses all right so next um if you want me to keep going well i can i can keep going read i'll read through the chat questions so uh we've got deckers who uh who asks how would generalized minting work with the variance in deltas between the uniswap and curve pool it's currently four hundred thousand to four million is it a balance you need to find between potentially flooding the uniswap pool all right so it's this is a very interesting question and it's uh only really come up over the past couple days as the pools have all started to trade pretty dramatically over a dollar and we're now at about a dollar four cents and so currently just for everyone to be on the same page uh the goal is to move to propose a bip uh for generalized minting and and generalize convert uh in in the next 10 days or so uh and that will start minting not just from the unisoil pull but from the curve pool and uh currently being stuck mints as we were saying based on the excess of beans on average over the previous hour and a unit swap at a dollar four based on the current liquidity that's 410 000 beans at the moment so beanstalk is minting around 400 000 beans an hour based on that but on curve at a dollar for uh b there's a delta of 4 million beans which in theory would mean that beanstalk would start minting 4 million additional beans in addition to the 400 000 from unisoft every hour and that's kind of a crazy supply shock so there is very clearly a market in efficiency that currently exists because beanstalk is unable to mint enough beans fast enough to return the price to a dollar faster than people want to buy them and generalize minting and minting from multiple pools will hopefully help alleviate some of that uh inability for beanstalk to respond fast enough however uh if you start minting four million beans every hour and people are a little slow and aren't at their wallets and don't sell immediately now you meant an extra 4 million beans too many or 10 million beans too many uh that can be a real problem and so one of the things we've kind of been mulling over and not sure about this but it's like maybe you roll into you once generalized mint and goes live for the first day or a couple days there's like a slow ramp up where the curve will means you know zero like starting from zero percent all the way up to 100 of its delta but you know over a period of seasons and therefore we can scale up as a system and then you don't have like these four million bean supply shocks all at once so the goal is not to shock the system uh and instead have it uh elegantly start to print more and more to return the price to a dollar by minting enough beans over time now not sure if that answered your question as to like the interplay between the variants of the pools and the delta b's uh but happy to expand on that more if you'd like i had a follow-up actually um to this uh publius would it make sense to roll over generalized convert first have the pool stabilized and then uh introduce them in think i know that at this moment right now convert won't do much uh but just you know thinking it uh yeah so in theory in theory it's possible mod uh that that's the case but as you said it right now convert probably won't do that much and in fact uh the reason we think it makes sense to prioritize convert at the moment uh is really on the downside that if at some point being start to trade below a dollar you know a couple million below peg on curve no matter how much converting you have on unit swap bean stock's not going to be able to return to peg fast enough and so moving to a generalized converting both pools that will stabilize things on both sides of the peg hopefully um the the minting is supplementary to that obviously but uh given the shortage of depositor beans in the silo at the moment that doesn't seem like you know a real solution to the problem at the moment because we you know convert won't there's not enough beans to convert in reality so something else that you know we've recently thought about is with generalized minting to slowly over time add the bean three curve metapool similar to how in curve pools you know you start ramping up a and it starts increasing we slowly start with you know minting off zero percent of the delta b in the b and three curve pool and slowly over the course of maybe you know a month a couple weeks we've ramped that up to 100 to allow this system to kind of adapt and stabilize as you're saying mod could you guys hear us [Music] could you hear us we could hear you can you hear us beautiful cool we're on the same page okay next uh in the chat got farmer joe's bean emporium uh who says we're currently seeing enormous demand for beans is the reason that the current price is above peg because only the eath bean pool can mint new supply to bring the peg back to one dollar we'll generalize minting that allows other pools to mint maintenance will be easier when bean is experiencing high demand so in short uh yes right now there is excess demand for beans and people are willing to pay above a dollar for beans because uh you know they they they are willing to take on the risk that the beanstalk will mint more than whatever the price that they're overpaying if that makes sense if you're paying over four four percent over peg they expect there to be four percent worth of inflation and the the problem is that's effectively inorganic demand one of the things beanstalk really wants to avoid is people that are buying beans because of short-term future expected growth and the fact that you have this access on curve so you know there's minting coming over the next couple hours um because the system can't respond fast enough by just printing on uniswap there is some sort of just inorganic demand that's natural here so moving to generalized minting should nip that in the butt to a large extent hopefully and then maybe just to to answer a little bit more you know the the fact that uniswap uses a constant product as opposed to the stable swap uh invariant is is in addition to the e volatility uh you know but it's it's mainly the the invariant makes it such that beanstalk can't really mint that many beans from the unit swap pool uh compared to the curve cool like at the same price there's literally a delta of 10 times as many beans in the curve pool and so the expectation is once you have minting on curve the system should be much more efficient all right next from bd26 question beanstalk has been attracting creditors because of the high returns after that stage what is the strength or tool that beanstalk will offer to attract people in other words what is the final product so beanstalk will always you know in theory at least offer a sufficiently high enough weather or interest rate to attract creditors uh so that is how it is able to maintain price stability um that's a separate question from where is being stock headed and if you think about product market fit for beans uh at the end of the day if you think about uh an asset that's trading against a stable coin if that stable pine has an implicit negative 10 percent carry cost your token is paying that 10 every year whether you realize it or not and so the difference between trading against a negative carry cost versus a positive carry cost is huge and so the thought is that uh beans may be one of the most attractive assets for other assets to trade against and uh ultimately the the thing that facilitates the positive carry of on beans is when they're deposited in the silo so a large part of the future development of beanstalk is focused on continuing to generalize the silo to facilitate uh yield from other protocols to be depos uh distributed uh to tokens uh to have liquid stock to have a gauge system uh you know to have a gauge system uh for for the addition of and distribution of stock to new pools uh so there's a lot on the silo front that can be done to really uh uh facilitate strong product market fit with beans as the number one liquidity provider uh you know in d5 potentially via the silo all right dumpling i felt bad um realized that we were starting to go through the chat and you had had your question i see your question in the chat do you want to come up and ask it on stage no why don't you just read the question right okay no problem so dumpling's question is about increased soil as our new uh his new bean prince go higher there's a lot of talk in the econ section this week about this question wouldn't it help to wouldn't help us deleverage quicker if we didn't increase the soil beyond a trivial amount to gauge demand when we're above peg well there's a question that is a great question ultimately we would make the argument that the the elegance in maintaining the same amount of pods outstanding so just for reference under the big nine parameters for demand for soil if beanstalk is paying off debt price is too high it still needs to measure demand for soil and so the question is how much soil should be issued currently it issues enough soil such that if all the soil is sown the number of pods at the beginning and end of the season is the same so all the pots that are paid off that's the number of posits willing to issue there's something really elegant about seeing whether at a given interest rate people are still willing to take the same place in line you know if the place in line is shortening that may help the system deleverage but at the end of the day beanstalk doesn't really care about how many pods it has it cares about how many um what its debt level is the beans compared to the pods and in short you know the modest adjustment to the available pods such that you know maybe you could have the pod line decrease by you know a couple million that's not really substantive in the grand scheme of things compared to making sure that you can take strong measurements of demand for soil and seeing whether people want to get in the back of the line in the same place that the line is um you know was was at the at the beginning of the last season whether there's still demand to get in that same place in line that's an added given weather that's a great way to take consistent market data in our perspective so that's the elegance to the current model that's not to say that it's correct but that's you know that's where it comes from and maybe one thing to add in there is that this is the maximum amount that the protocol is willing to offer um at some point as the weather keeps on decreasing decreasing decreasing you might reach a point where you know you're offering that much but not everyone is grabbing it and that that would be like an equilibrium point so this is the maximum that's the protocol is willing to offer on top of it until it reaches you know or it finds the right weather all right next in the chat we've got beanbankman who asks or who says i guess it is asked as great as the prince or are recently how can you make being more ape-proof the the ape thought process seems to be that it's okay to buy it one dollar four cents as i can make that up in a couple of good days or in a couple days of good printing do you think hmm um yeah i'll go all the way through the question uh do you think generalized minting is sufficient if not thoughts on incentivizing cell pressure during positive dpeg so ultimately think that generalized minting will help to some extent because it would just remove that short-term inorganic demand but the big thing to note here is and we're still thinking through whether the season of plenty needs to be kept in its current form which is very extreme particularly all the pots harvesting but the main point is uh if beanstalk continues to trade above and above and above peg the only thing that's going to happen substantively is the pod rate is going to collapse pod rate's going to collapse and the debt level of the system is going to decrease dramatically in effect and the health of the system will improve uh very quickly so and that's already starting to happen beanstalk had a peak debt level like 1584 and it's already down to like 1100 um and dropping fast and so the point is even though people are willing to pay above a dollar for beans bean stock at this current pot rate is very comfortable with that at any pod rate that's too high beanstalk is comfortable with that um that's how beanstalk deleverages and at some point if this runs out uh and beanstalk doesn't go back to a zero pod rate which is totally fine um you know whenever this short-term demand runs out the whole point is hopefully beanstalk will have de-leveraged enough such that people are willing to lend beans to beanstalk and get further back in the pod line than the current length so uh that's basically that's the perspective of beanstalk which is you know as long as it's deleveraging it's okay and it's certainly deleveraging at the moment so it would rather it would be better to de-leverage just as fast with less upside volatility if that makes sense and generalized minting will facilitate that but in short you know at some point you still got to do it and maybe also in response to the fact of incentivizing selling when the price is greater than one this is essentially what we feel like convert does convert is the ability to when the price in a pool is greater than one you're able to take your deposited beans sell deposited beans into each and then add bean eat liquidity to the being eat a swap pool in the deposited form and from doing so you're able to transition these deposited beans that currently have two seeds per bdd to deposit in lp which have four seeds per bdv and this um feature is you know what will come with generalization namely generalized convert and as such farmers will be able to convert deposited beans into positive being three curve lp and deposited being lusdlp and so with generalized can con minting all these more beans will be minted which can then be immediately converted helping us return back to the peg faster all right so j dubs always looking out for my friend who has at times very basic questions who's definitely not me is definitely my friend so jdubs his question is can you explain generalized minting and generalized arbitrage for my friend who doesn't understand them well i don't know what generalized arbitrage is but um generalized convert is just the ex expansion of what publish was just saying to the ability to convert with other pools not just the bean eat unit swap pool uh and so uh any of the convert functionality and b install currently will be expanded to other pools that's what generalized convert is okay next question is from dunks 4-1-1 question curve gauge is going to going live soon or already live how are we thinking about bribes and what's the timeline on that so bribes are kind of unsustainable but what we were thinking is it may make sense to uh try to acquire uh sufficient convex to uh uh basically stake and uh lock in the minimum point one percent vote to in perpetuity uh guarantee some sort of gauge rewards and the current math on that is that it basically costs like a little under one and a half million dollars at the moment and given that beans are trading i mean there's like five million dollars above peg right now five million beans above peg uh the the thought is that bean sprout uh may propose a bip in the not too distant future to mint beans uh to sell into convex to facilitate uh participation in the convex uh gauge system excuse me the curve gate system be a convex actually the next uh question that i see in the chat is pretty well aligned with the with the the answer you just gave so it's from austin and austin asks can publish pontificate a bit on what the beanstalk gauge system would look like what exactly would protocols be trying to do obtain votes or what exactly would protocols be trying to do obtain votes get wireless sit in the silo okay so there's two things in practice one is getting whitelisted for any gauge and then the second is to receive gauge so uh the main there are a couple things that remain unclear but if you just think about the current structure of the stock and seed model uh in effect beans receive the lowest amount of stock over time and particularly given that the intention is to not have seeds become fungible we can just think about it as stock over time so bean deposits which receive two seeds each seed receives one ten thousandth of a stock every season so bean deposits currently receive uh one five thousandth of a stock or two ten thousandths of a stock every season uh l usd deposits receive three seeds so uh three ten thousands of a stock every season and uh being three curve and being er lp receive four and that's kind of the max so they receive four ten thousands of a stock every season per bdb being denominated value deposit and the substantive point is if you're whitelisted and particularly once the silo has supports yields from other protocols there's no reason to say the minimum you know seeds is two or equivalent to whatever the bean just deposited beans are which for reference would facilitate people to convert uh depositor beans into deposited lp against this white listed asset if it's a two seeds or the equivalent um you know without burning any seed so that's kind of neutral but there's no reason why that protocol shouldn't be able to just get one seed and then subsidize the rest of themselves and so the real thought the real thought is there will be some maximum of stock per bdv per season of something like 4 10 000. that's what it would currently be based on the beneath and being three curve lp it may be a little higher but um that there will be some maximum and then the main question that's unclear is how to scale how to how to basically have people vote to a lot stock per bdv per season for pools in a way that's flexible uh but reasonable and the main question we're kind of asking ourselves at the moment particularly having gone through the past a week or so would get trying to get the curve gauge proposal live in reality it was only four wallets that needed to vote to get the convex proposal snapshot passed and that's not very decentralized even though we're very happy that it was passed and we're grateful for the people that voted it's not the most decentralized governance process and so in the grand scheme of things we are very focused on decentralization of stock and one of the memes in the discord which was made us very happy is people complaining about stock dilution and they're getting diluted and it's like yes this is the way the system is supposed to work everyone gets diluted while they get paid but at the end of the day we don't want to create some sort of gauge system on top of stock that results in a high degree of centralization at a meta level on top of the protocol all right how's that for pontification there there it is nothing wrong with a little pontification stream of thought we're not very well far along on this journey of thinking about this so it's just that's where our heads at nothing wrong with that at all so nasdaq actually yes he's asking the hangover question so nasdaq asks are you worried about peg stability after this growth cycle or this will this be different than the last one due to new new mechanisms bips more liquidity etc i mean we're nervous guys nas jack so we're nervous you know like uh there's no there's there's there's obviously people that might be joining right now that only want into this system at 150 percent apy and when the system goes to 100 they may leave and then the people that came in at 100 percent may leave when that it dips because the people that left it 150 lead so at some point this positive feedback loop will end the hope is that the pod rate will have decreased sufficiently such that uh whenever the next mini debt cycle comes beanstalk is able to attract enough debt to return the price to one at some point now thanks to the amount of liquidity that we have now and the converts uh and particularly the amount of deposited beans that have been converted to deposit lp the hope is that whenever there are these outflows that some of that lp will be converted to beans uh to depositor beans and that will effectively create uh demand for beans uh or decrease the supply shortage and then the other thing is it is going to be very interesting to see whether people are waiting on the sidelines who don't want to buy at 104 but we'll buy it 95 cents or a 99 cents or 97 cents who knows so a lot of it is up in the air uh obviously beanstalk gets five million dollars or five million beans above peg across the three pools right now so there's like a lot of excess demand so at some point we do expect that will expire and bean stuff will return the price of a bean to a dollar uh how far below a dollar the price goes thereafter is very unclear but you know we're nervous but that's because we're nervous guys it's hard to it's hard to feel bad about the state that beanstalk is in at the moment we're certainly overall would say that the system is in the best position it's been in since launch you know currently so that's a pretty good place to be all right so next next in the list i see um right below nasjack i see um farmer joe's bean emporium and it's not so much a question as a statement but i'm going to read it and see if you want to respond at all publius farmer joe writes it seems that uh the inorganic demand could be speculation on the distribution of the three curvinelli usd delta uh yeah i mean well ultimately that is where the inorganic demand lies so we would agree with that statement yeah as as i was reading it i was thinking that almost might be kind of a follow-up to an earlier question um all right next question comes from chris currently the optimal pod rate is set at 15 is their discussion on adjusting this number it seems or seems like if bean can attract creditors at 1200 percent bean could increase the optimal number i mean frankly the pod rate itself the optimal pod rate doesn't really matter or at least you know we don't have the the statistics background to feel like it does matter in the sense that our inclination is more from a theoretical perspective 15 is a very reasonable healthy maintainable debt level in the grand scheme of things and so beanstalk while it can live at higher debt levels there's no reason to and if you think about sustainability as a credit based system the main thing that is makes it sustainable is being able to attract demand for uh pods for debt for soil at any at basically any time and maintaining a very low healthy pod rate in the grand scheme of things if it can attract lenders at 1200 great if it ever gets there in the future great hopefully can attract lenders but the point is you know the system should try as much as possible to stay in a low leverage state now uh as we're in an early stage of the game the system's only eight months old uh you are going to have these wide swings in the padre but as it as the system grows to much larger scales and stabilizes to some extent you know the goal is to pick up pod and and it could be improperly said at the moment we don't really have an opinion on that um you know the thought is the the pod rate is going to function as a a way for the system to to trend towards a very low and sustainable healthy debt level over long periods of time all right and it's looking like um dumpling has almost a f follow-up question um whoa um so dumpling writes in the chat last part of the question would be what are the advantages of issuing more soil and is it a big enough advantage to outweigh the cost of the pod line looking exactly the same would be nice to see the line shorter i think didn't we just answer that yeah yep [Music] okay next ipo writes can you talk about what the protections are internally in place to make sure that multi-state cannot be compromised more broadly is there any key manned risk that could result in a disaster situation well the multi-sig it depends you ask me about the beanstalk farms the publish multi-stake there's a couple different multi-sticks uh the beanstalk farms and bean sprout multi-6 are pretty simple uh because they require a majority of keys and people are pretty accessible uh but it's like seven signatories on each wallet or something like that at this point um and puglia says a minority i think we only have two on each wallet at this point um and then the wall with the ownership of the contract uh that is distributed on across three different hardware wallets uh that are custody by you know basically in different places by different individuals and you know anytime we need to use them it's it's a huge pain in the ass but in short uh we think that the key man risk is more you know beanstalk is still at the stage where uh uh you know for better or worse we don't really think if we disappear today uh publish if we disappear today that would that would be great for the protocol you know it's still pro being soft run still isn't probably ready to run on its own but uh so from that perspective there's definitely keyman risk but not sure if that was a separate question or if you're asking about human risk with regards to the wallet uh so happy to expand if if we didn't answer your question [Music] ipo i guess i'll leave it if um yeah if you want to expand you can either drop in the chat or come hang out on the side of the stage we'll give you that opportunity all right um so next question in the chat is iron keck with um with convex rewards if you're a part of the the curve pool and then staked in cvx are you thinking that you would be able to stake your cvx stake tokens back in the beam protocol or would you be sacrificing the beam protocol yield so in the future the answer is yes you'll be able to deposit your cvx being three curve in the silo but currently you have to choose but there will be an upgrade to the silo to facilitate yield bearing tokens soon and you know kind of one important note is just because you are not receiving being three curve gauge you know with your b and three curve deposited into the silo that doesn't necessarily mean that it's not benefiting you as there most likely will be being three curve lp deposited into convex and thus not receiving stock so therefore bean stock is able to attract more liquidity without necessarily diluting stockholders all right looking looking down through the bottom of the chat we may actually have reached yeah looks like you've reached the bottom of the chat in terms of um in terms of questions um we've got a handful of folks on stage not sure if they're up to to ask questions or not if so looks like i've got an open chair next to me or the uh the one podium's open uh i have a question publish how did you solve the the delta of the lusd uh uh pool uh or like measuring the the difference in them that's a good question so you know when we initially sought out to solve that math it proved to be uh you know extremely challenging from an algebraic perspective you know once we got to the part where we had basically been able to solve you know for the price in terms of the other reserve variable we were you know already at something like almost probably 100 turns in the expression however you know we decided instead to just do some kind of newtonian estimation where we just use the step function to where you know we basically move the reserves a certain amount calculate the price and then you know over time slowly get closer and closer to the price until it converges you know we were able to find an efficient step function kind of using some sort of like the derivative of the constant price times the difference and you know we were able to find results that converge in three to four iterations which you know on chain is a lot more efficient than actually trying to solve the math behind it and you know just want to give a shout out to naga king in the curve discord as you know this was a method that he had recommended and curve leverages several times in their contracts themselves so this is you know a uh you know kind of established method of you know calculating uh you know variables with respect to the curve pools so just to add uh to this this is also how uh they estimate it so like the difference between us and what we see on three yeah i mean it's a unique problem that they don't necessarily do you know kind of the problem is we can't assume that the price of lusd is one dollar and so instead you know when we're calculating the delta b in the b and l usd pool we're calculating the you know we're basically need to solve for the ratios of b to l usd using some external oracle to get the b and l usd price we do this currently through using the b metapool in the l u s d meta pool by calculating the flashlight resistant price on those two pools we're able to get the b and l usd price and now comes the problem of given a price how do we take the current reserve balances in the b l usd pool and calculate what the reserves would be at that price this is very easy for unit swap pools given that you know the formula is simply x times y equals k but on the curve side it is you know pretty much near impossible to you know solve for solve that same math and um you know therefore we used estimation but you know kind of they don't they don't solve this exact same problem but they use a similar methodology thank you that was helpful all right anybody from the crowd want to hop in a chair and ask a question i am looking down through the chat okay um j dubs just uh tucked onto the bottom um oh me asked will you utilize amo to mint more bean and help with peg no beanstalk doesn't have an amo and doesn't perform any market operations except for during a season of plenty okay you're going to have to help my friend out here amo what what does that stand for automated or autonomous market operations it's a frax is it algorithmic yeah autonomous algorithmic it's one of those okay um we got yield goblin and a chair you wanna you have you have a question yield goblin field goblin if you have a question we can't hear you okay not hearing i have a question what happened that's my grown stock if i uh take out my my uh my lp position do i do i lose it like other stock that you accumulate it seems like you your stock you get based on however much you deposit and then but you collect grown stock over time um and then does that stick around or do you uh lose that too yeah so specifically the way beanstalk creates opportunity cost for uh leaving and coming back is all of that grown stock that you forfeit so when you withdraw you forfeit your stock your seeds and all of your grown stock from your seeds okay got it yeah and so but if i hold it for longer and longer and i'm getting more and more grown stock it's growing my position overall basically accelerating correct and your new beans your new beans get new stock and those beans obviously don't have any grown stock on them when they first you know exist if that makes sense yeah like you're always getting new beans with a lower cost basis but older assets get stickier and stickier and stickier got it got it it makes a lot of sense thank you all right um so back into the chat so anonymous asks uh will amos whether it's for seating lending pools of bean or to strengthen the peg ever be considered at some point in the future so in short uh that's one of the main structures that bean sprout can facilitate which is seeding pools when necessary and such um to kind of solve short-term tragedy of the commons problems but don't want the protocol to ever have a trad a treasury or be responsible for doing that stuff really and maybe adding on to that you know the idea of convert you know incentivizing people to perform market operations by selling and adding lp or removing at lp and buying is in some sort some kind of you know incentivized market operation of strengthening the peg one thing you know we kind of are interested in looking into is some sort of urine vault strategy that users can deposit assets into and it would essentially facilitate some sort of auto convert feature to where all the newly minted beans would be converted into lp kind of you know on some distribution or schedule such that you know there is some sort of you know amo but we don't want to have any ammo natively in beanstalk all right next in the chat starting to come in quick again so i still i'm still feeling like i'm going to murder this name ayanna keck asks are there any plans for the protocol to acquire conflicts damn uh if so oh for a second okay for just a second i was thinking like convex like the whole thing now i know what you're saying uh if so what would be the mechanism same as fundraising for an audit yeah so as we were saying think that it may make sense not for necessarily the protocol to acquire it like we don't want beanstalk to hold it as a protocol no treasury but um think that beanstalk should try to fund or facilitate the purchasing and permanent allocation of convex for gauge uh curve gauge and previously fundraisers were really there because you know beanstalk was unable to sell beans above a dollar or didn't want beanstalk farms or being spread to sell beans above a dollar to pay for things like an audit and so issuing debt was really the way to do that um but now that beanstalk and beans are trading well above a dollar uh you know think it may make sense to just mint the beans and have bean sprouts sell them you know whenever they can above a dollar effectively so no need to issue excess debt when you can just sell the beans above a dollar okay all right hashrash asks what are some of the additional partnerships in the pipeline good question [Music] don't well it's a difficult question to answer we don't like the word partnership um protocols don't have partnerships protocols have integrations um the hope is to have a wide variety of different lp pools added to the silo white list in the not too distant future uh and that will hopefully facilitate you know integrations with a lot of different protocols but don't not a big fan of the word partnership all right um next so i'm your huddlebury asks without compromising anonymity is there any other info you can give regarding the background of the team well so the team is pretty diverse at this point there's like 50 people working on beanstalk uh publius is you know we're going to refrain from basically saying much other than you know we're a group of friends from college that's how we know each other we have different uh backgrounds in computer science and economics uh and have have been in crypto you know individually for five six years uh or so uh uh on the high end uh and you know there's an ambiguous number of us so that's what we're comfortable sharing but uh you know hopefully that's sufficient ian keck thank you for correcting my horrible pronunciation um so om asks ohm oh me man i'm still just wrecking them uh when concave dean bond when if you had more to add publicis i didn't hear it no that was it i don't know [Applause] oh man you've also been asked by bean bagman to join the group on the dance floor stage right so looks like there's a lot going on over there i just i can't get over this the this this setup this is i think we'll head off uh and call it and go hang out on the dance floor for a little bit all right sounds good well um certainly appreciate that i appreciate all the information obviously publius uh k romy thank you so much for having us jws thanks for being here oh yeah no problem at all our pleasure jw's do you want to talk through uh nft giveaways yeah um so well actually we've got a list of everyone that was here uh between the two different teams um we'll be picking those out uh and then we'll follow up with you guys it's just gonna be random we've got those that are from the the two communities um like i said we've got the two selected so we'll connect with you guys via discord um but uh yeah in the meantime thanks again romy for for having us i didn't see her dancing on the chair that's great um and uh again thanks to everyone for who popped into this and was uh contributing stuff like that and thanks for your patience as we get up to up to speed on the uh on the audio and everything so the uh the thought that goes through my head is next time we do this which we definitely should do it again we'll have our on staff musicians provide some uh some musical content as well so something to look for oh yeah that would be amazing we do karaoke nights a lot if you've never joined this year i can't live every week i feel like i feel like every time someone from octomob talks about things you can do an octobob my mind is blown yet again this is this is wicked awesome all right um yeah thanks again uh thanks so much for your time stay as long as you want i think the octo mob folks are going to be rocking it here well into the the late hours so everybody enjoy your night thanks again for joining