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Beanstalk University Class #23

Date
April 26, 2022
Timestamps
0:00 Intro • 2:07 Would a market crash affect the barn raise? • 3:09 Any updates on the stolen funds? • 4:14 What stablecoin will the Barn Raise be in? • 5:28 What would Beanstalk look like if we turned it on with a Barn Raise? • 6:53 Is Nick Mudge a technical advisor? • 7:55 Where is the Barn Raise documentation? • 8:52 Will the Barn Raise be audited before launch? • 10:23 What does the demand look like for the Barn Raise? • 11:47 What will happen if ETH goes down a significant amount before the Barn Raise? • 12:31 How can I use Beanstalk as an investor? • 14:27 What is the utility of the Silo? • 16:29 What is the purpose of Seeds? • 20:08 Will Beanstalk move to a CPI peg? • 22:18 What percent of the 77 million is need to restart Beanstalk? • 23:00 What does an average day look like for Publius? • 24:19 When is the WSJ article coming out? • 25:07 What is the best way to invest with a smaller wallet? • 25:37 What is the reason behind the 33 percent split? • 27:05 Can Publius share more about their backgrounds? • 29:50 Will there be a Barn Raise NFT? • 31:45 Is the spilt between the Pod Line and the silo something to worry about? • 32:47 Can you update the 33% split of Bean mints? • 33:45 Why is the Barn Raise similar to a seed stage investment? • 37:20 What is the future of Bean? • 39:48 Any updates with the bug bounty program? • 40:23 What will the price of Bean after restart? • 41:15 How will the Sowing Period work? • 42:59 What is positive carry? • 43:58 What questions do VCs have? • 44:35 Will bids be public? • 48:26 What is the death spiral of stablecoin? • 53:33 Will the peg model ever change? • 57:06 Where did you get the idea for Beanstalk? • 1:00:13 Any updates on the educational materials? • 1:01:50 Final thoughts
Type
Beanstalk University

Recordings

Notes

Would a market crash affect the Barn Raise?

  • Beanstalk is pretty much in its own market, so don’t expect that to affect it
  • Any update on recovering stolen funds
    • Only update is that the funds look to still be in Tornado Cash, and it looks like they’ve identified a wallet that was involved in the attack, but no real substantive leads

What will the Fundraise be in? ETH?

  • Probably not ETH, probably will be a stablecoin.
  • “It’s pretty clear we are not going this way and this has probably been answered but if we didn’t do the barn raise and just turned things on, what would a bean recovery look like to get to a dollar? Massive weather for a lot of sowing??”
    • This would be very tough but technically possible, since there would be very little liquidity as the LP tokens are all gone.

“Did nick mudge join as a technical advisor?”

  • In active talks, and he is excited and enthusiastic, and we will share more details as we get closer to a closed deal

There is a lot of good info explaining the BR conceptually, but I’m finding it harder to understand exactly the specific process for what to do and how. Is this documented somewhere and I missed it

  • There will be a “how to” guide posted
  • “Will the bidding mechanism and subsequent refund mechanism be audited ahead of launch”
    • Bidding mechanism is going live Monday, no way to audit before then, but it’s such a simple mechanism there shouldn’t be concern
      • All of the settlement of bids and sows will happen after conclusion of BR but before Bean restarts, so there will be a time for all transactions to be verified
    • There is the hope to audit the protocol as a whole prior to relaunch

“Can you comment at all on demand for the barnraise and what realistic expectations are “internally” for filling the full 76mm?”

  • It’s unclear
  • Publius would be surprised if it only filled like 10%, but it’s hard to have a sense of exactly where it will end up

“in the event ETH draws down significantly ahead of launch, would we delay the raise or pull through?”

  • No, ETH drawdown should not affect anything since the fundraise is being done with Stables

“Complete newbie here, so ignore if you have this period to answer other questions as i can just read docs, but what is the quick breakdown on how i as an investor can use beanstalk?”

What is the utility of the Silo for maintaining peg?

  • Well, the Field is where peg stability comes from (the ability to attract lenders)
  • However, the Silo is where product market fit comes from. It facilitates the positive carry on beans — Deposited beans yield seigniorage
    • This positive carry allows for so much innovation, which creates a huge advantage for Bean to eventually become the primary financial primitive for Defi

What do seeds accomplish that stalk doesn’t?

  • Seeds generate stalk over time.
  • This creates an opportunity cost for leaving the Silo (you have to burn stalk and seeds if you withdraw from Silo). So because of seeds, the amount of stalk that would be burnt increases over time, thus increasing the opportunity cost

Should we move to a CPI-peg like Frax?

  • In theory, Bean can peg to any asset. Right now, highest demand is dollar-based stablecoin
  • We could issue CPI-Bean if we wanted to, but right now that’s not the focus, but it’s totally possible

What percentage of the ~77M is needed at a minimum from the Barn Raise to restore the protocol to a working condition?

  • Theoretically 0

How are the Publius’s doing?

  • Excited and working hard

When is that WSJ article coming out?

  • Probably tomorrow, not sure

Could you explain the reasoning of the 33/33/33 split?

  • It’s pretty arbitrary, could change if investors really push for it

“Given you guys have been doxxed are you willing to share any more about your background and experience to be specific all of Publius?”

“Site says the BR tokens accepted “will likely be USDC, UST.” When will we have a definitive answer?”

  • We will have a definite answer sometime before it starts.
  • This is a bargaining chip for the DAO when talking to investors
  • Ultimate decision will be made through Snapshot vote

Will there be a Barn Raise NFT?

  • Yes, and it will be cool
  • Team is working through designs and getting this ready

“Let’s say bean raises enough through the barn raise. Are you worried about the imbalance of the split between the silo and the podline. (33/67) going forward, until the new podline is paid off? For ex, there could be lower incentive to LP post unpause due to lower apr vs prior to hack.”

  • At the margin maybe a little but not really in the grand scheme of things

“you could potentially update the split if the 33/33/33 isnt working out right?”

  • Anything is possible but think somewhere around here is best for the integrity of the protocol

What makes the Barn Raise similar to a startup seed round?

  • Beanstalk has a strong credit history, and this is the first opportunity for investors to basically acquire a piece of Beanstalk at a prescribed Marketcap
  • Investors would also be entering at a discount because they would effectively be entering at under $1 because of the interest rate

“I’d love to hear more about the future of beans and how they can be used to provide liquidity. If you can explain in more basic terms how the silo plays a role in that, I’d benefit a lot from that also.”

  • This is an example of Beanstalk is uniquely able to create yield opportunities for other protocols /tokens for providing liquidity to Bean (via the Silo) and this creates a positive feedback loop where Beanstalk is supporting other protocols and providing liquidity for them while also benefiting Beanstalk
  • Beanstalk is uniquely able to do this because it is positive carry and there is no supply constraint, and it is the first of its kind (first positive carry stablecoin ever that can really revolutionize Defi)

What happens if Beanstalk does not raise 100% of the Barn Raise

  • Beanstalk will be scaled to whatever % we raise

What’s the forecast for Beans in 100 days?

  • Hopefully Bean will be back to pegging hard

Any updates on bug bounty?

  • No substantive updates

“Can you explain what "positive carry" actually is fundamentally, and contrast it to the default "negative carry" in DeFi?”

  • This distribution of minted beans 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)
    • Positive carry = you are paid to hold the assets
    • Negative carry = it costs you to hold the assets

Will bids be publicly listed for all to see?

  • Yes

“Assuming we raise full $77M and our Silo LPs are fully vested and no haircut. Was there any lesson learned with holding vast majority of net worth in this protocol or do you plan on making any personal allocation changes to the protocol, regardless of the assumed beefed up security?”

  • Publius is all in in a sense as they are young 24 year olds seeking to build the future of defi
  • There’s nowhere else Publius would rather have his money in

How do you think about “death spiral” / run on the bank scenario for algo stablecoins?

  • Beanstalk has a few safeguards:
    • 1) Beanstalk doesn’t overprint. It only mints based on how many beans need to be minted to return the price to be a $1 from data from the prior season (old failed attempts at algo stablecoins don’t do this, instead they just overminted)
    • 2) Stalk system incentivized people to not run on the bank
  • However there are 2 main mechanisms to protect against sharp decreases in demand
    • 1) Conversion — liquidity can be scaled down to save the price
    • 2) Soil — if there are willing creditors, then Beanstalk can return to peg

Would Beanstalk ever take into account an assumption of people locking up money in the Silo for a long time?

  • Bean makes no assumptions about participant behavior
  • Will conversions be available at start up?
    • Yes

How did the idea for beanstalk come about? How was this idea of a credit based coin that doesn't over print thought of?

  • Team was inspired by ESD/DSD and wanted to solve the compelling problem of negative carry stablecoins and so they fell down the rabbit hole from there

“Apologies for the dumb question (as I came over via Bankless as well and still getting my head around the terminology - beans, silo, etc). If we had xx amount to invest and support Beanstalk, is there documentation or guides that say, start here and do this...and if you had more, then you would want to do this - i.e., where you invest in the protocol. Basically I'm looking for various tracks based on your investment.”

  • Publius does not provide investment advice

How are educating marketing materials coming along?

  • Lot of progress, videos are being made, things will be shared soon!

Transcript

oh hello hello sir do you think this is number 22 huh i think this is number 22. i mean stock university number 22. i'm going to have to check on my is that a reference to something oh no reference just uh pretty cool we've done 22 of them i guess so all right um so this is uh this is our weekly uh university uh amt university all questions are welcome uh but also this can kind of double as an ama um as as similar as the ones that we've been doing so with that said we'll just get right into it um we'll have uh you can raise your hand to come up and ask a question you can also uh drop them in the chat and i'll go through and read them that way uh and if for some reason you can't do that you can also dm me with any questions so uh unless public do you have anything um you'd like to share before we get started just uh that this has been such an incredible uh eight days and we're we're more enthusiastic than ever so this is uh you know it's crazy stuff going on but very exciting as well and austin chimed in this is class number 23. so there you go michael jordan jordan year jordan class and i'd also add that uh if you all haven't voted just yet um you can head over and vote i think we've gotten quite a quite a positive response to the the bar and raiser um bfp so you can find that in the announcements a link to that in the announcement section so that's a good time if you have it all right the floor is open for uh for questions you can raise your hand drop them in the class chat okay we have our first question from helen do you think a market crash happening between now and until the barn raise would affect the rates which market i think they're probably well helen can you clarify but let's assume you know the eth uh the the general the general market is that the market we're really worried about right now i don't know i'm half making a joke it's kind of tongue-in-cheek i mean ultimately uh hard to say feel like being stuck is kind of uh you know in its own in its own market state that's somewhat distinct from the rest of the market at the moment so wouldn't think that that would have too too much of an effect okay and from uh scooby you sort of update on the hack leads from help from people slash resources looking into the stolen funds so the only real substantive you know update is that there's some wallet that it seems may be the wallet that funded the [Music] attack you know via tornado cash so the funds seem to still be in tornado cash um according to multiple reports so it doesn't seem like they've like hit any exchanges per se but in terms of any leads or anything there is some lead on the the wallet that may have funded the initial attack and the exchange that funded that wallet and so that is being pursued but nothing like nothing you know substantive other than you know shit's happening but it's like you know nothing nothing really to report gotcha cool from uh harry double down smith what stable coin is the raise going to be in will we will we be able to use just eth uh unclear it won't be eth i don't think uh it'll probably be a stable coin so are we planning on having any kind of under the hood transaction where someone could use eth and then it could don't think so but maybe but don't don't know you know that's probably not so simple because previously all that under the hood functionality effectively leveraged the being eath pool and that doesn't exist right now um i guess it's possible but it's unlikely the goal is to keep this as technically simple as possible gotcha yeah that makes sense that under the hood stuff would have utilized that several people are typing okay from edgar allen pizza it's pretty clear that we're not going to go with this way and this has probably been answered but if we didn't do the barn raise and just turn things on what would a bean recovery look like to get to a dollar massive weather a lot of selling so the the crux of the problem is the state of beanstalk is corrupted so people may have stock and seeds and they could have their beans restored but the lp tokens in this silo are they're you know at the moment gone and they need to be recapitalized and so in short what would happen would be there would be all these beans that get minted and everyone in theory would want to try to sell but there's no liquidity whatsoever and so then the protocol would you know based on a white list try to incentivize liquidity and demand for soil based on the liquidity in the pools but you know in a theoretical way assuming it were possible it would still be kind of ugly and don't think the protocol would you know have a good shot at recovering given the amount of liquidity to bean supplies at like zero percent at the moment but in theory it's possible okay uh harry double down smith again did nick mudge join as a technical advisor uh yes is i mean dumbling can you answer this i think you know more more on like the official relationship yeah um i guess i would just say that we were holding off to make any announcement until we had clarified things a little bit more but we are having active talks with him and it's very exciting and um yeah i'm um he's excited enthusiastic and and we'll share more details as we as we sort of hammer that out more specifically but he's certainly a friend to the project at this point that's probably how i would say it yeah i'm with you harry dumpling needs to close this deal okay niblets there's a lot of good info explaining the barn rates conceptually but i'm finding it harder to understand exactly the specific process of what to do and how is this documented somewhere and i missed it so i think there should be like a how-to or something published prior to the bar bar is actually too familiar what the process will be assume it'll be you know through the website you'll be able to you know place your bids and place your shows but don't don't have too much of a sense of what that will actually look like you know it'll be it'll be something similar to the previous interactions with the website presumably okay from ipo and chill the bidding mechanism and subsequent refund mechanism be audited ahead of launch so the the bidding mechanism is going live in on monday there's no way to have it audited prior to then now with that said uh that shouldn't be a large concern because of the simplicity of the mechanism uh furthermore all of the settlement of the uh the bids and the sows will happen uh after the conclusion of the barn raise but before beanstalk restarts and so there will be a period of time where uh people can verify that all of their uh transactions were settled properly and so in short given the simplicity of the bids and so's combined with there will be an opportunity and a time for everyone to verify prior to the system restarting and the fact that there's a a steep time crunch here uh no the the mechanism itself for bidding and sewing will not be audited ahead of that but obviously the the hope is to have the protocol itself audited as a whole prior to the launch okay can you comment at all on demand for the barn raise and what realistic expectations are internally for i guess what the internal quote expectations are for filling the full 76 million you know again run the risk of uh you know speculating here uh the short answer is it's unclear how much of the barn raised beanstalk will fill uh think that there's certainly a chance that the entire thing fills think that's not uh off the table and think that it's also possible that a third of it fails uh you know so uh would i you know would be surprised if you know it only filled 10 that would be very surprising uh i think but generally it's very hard to have a sense of whether it's gonna fill 25 million 50 million or the full 70 77 or whatever will you be getting a haircut before for it we've been kind of meaning no haircuts so i think that at least you can't cut your hair it says no haircut okay [Music] uh in the event that each draws down significantly ahead of launch would we delay the raise or would we pull through from ipo and chill publius i think you're still muted or we lost you my bad joke just can you hear me now i can hear you the the short answer is because the raise is happening in stables don't think that uh you know an eat drawdown should affect things at all okay from boonie boy we got a complete newbie here so ignore me if you want to use this period to answer other questions i can also just read the docs but what's the quick breakdown on how i as an investor can use beanstalk well beanstalk is a credit-based stablecoin issuer that creates incentives to for two participants to participate in the creation of utility in the form of being stability so in short there is the ability to lend to the protocol for you know anytime there's soil or you can deposit assets in the silo for stock and at a high level those are the two you know meadow meta ways to get involved with the protocol and participate okay i just got a dm from casper um very enthusiastic about about these uh but he says he can't get up on stage so let's oh here we go here we are okay casper you invited up oh i thought i specifically made it so casper couldn't come up here i don't know how how this oh come on i'm the one asking the good questions here how you doing sir good man i was just telling dumpling like when wonderland was still a thing like their voice chats or like their town halls were lit because people would just talk about the protocol and like now i like can't find servers where that's a thing but you guys are doing it and i think it's super important for the community because people love this or at least i do appreciate that um kind of a few questions so first is like what's the i understand like the utility of the credit system is to get us back up to peg um but what's the utility of the silo like for maintaining peg or is it not really this is a great question so the field is where peg stability comes from ultimately at a core level the ability to attract lenders is what creates peg stability uh however the silo is where beans have product market fit so in particular the silo is what facilitates the positive carry on beans so it's very it's not not to say that it's impossible but it's a harder economic problem to try to have beanstalk pay out some sort of bean seniority to circulating beans and keep the price of a bean at a dollar if that makes sense the abstraction of having circulating beans be worth a dollar but having deposited beans yield stinging ridge that is what facilitates to a large extent a a less extreme version of uh the solution to this economic problem however just from a pure product market fit perspective the ability to deposit beans in the silo or lp tokens with beans in them and receive bean seniority that is what we envision over long periods of time being the primary use case for beans beans being the number one liquidity provider in d5 makes a lot of sense because of the positive carry of beans however you only really get positive carry if they're in the silo and why is that again that's because it's much harder to keep the price of a being steady if you're paying out senior ridge to circulating beans you need some sort of uh distinction if that makes sense [Music] for sure and then on top of that this like the seeds i think you mentioned one time that seeds don't i might have misunderstood the seeds don't really like matter like what do seeds accomplish that stock doesn't what's the okay so everything matters but uh seeds yield more stock over time and in particular the the reason uh for seeds or the reason stock grows linearly over time is to create some opportunity cost for leaving the silo so in practice when you deposit assets in the silo you receive stock and seeds when you withdraw those assets from the silo you have to burn or forfeit all of the stock all of the seeds and all of the stock that grew from the seeds for the time you were deposited therefore there's a linear amount of additional stock from seeds because stock grows linearly from seeds that you need to burn uh when you withdraw from the silo which if you're withdrawing for good doesn't really matter but if your intention is to withdraw and come back in the future then that's where the opportunity cost ultimately really manifests itself and so you could make the argument even if you don't have an intention to come back particularly when stock is liquid but the concept is what the stock that grows from seeds does is it creates opportunity costs for leaving the silo which makes assets in the silo very sticky even when the price of a bean is below a dollar and there's no short-term senior range does that make sense yeah but doesn't like don't we already accomplish that with the stock it's a little opportunity oh sorry uh can you hear me now is that on my end can everyone else hear casper so i guess to answer your question casper um hello can everyone hear me yeah we can hear your dog sorry i i i think the internet's bad what was your question or your rebuttal casper i apologize i was just saying kenneth the uh like aren't it sounds like the seed i don't understand like what the seeds accomplish that stock can't accomplish you know oh well the short answer is there's two separate things and i didn't mean to cut you off there publius i think your feedback just hit my headphones as casper was responding as well apologies um the seeds were primarily implemented as an accounting mechanism with which to implement the growth of stock over time so in theory you could have the opportunity cost from additional stock over time but the the key thing to note is it's not just the stock and the fact that you have to burn the stock it's that the amount of stock you have to burn increases over time the more time you spend in the silo does that make sense so the seeds aren't the substantive part uh it's the fact that stock grows from the seeds the seeds are just an accounting mechanism gotcha so it's really about the stock and like the species just basically accentuate the focus on stock and in particular what you may have miss uh interpreted from some previous comments was that in the future whenever beanstalk moves to a gauge system for stock distribution uh seeds are highly likely to be abstracted away such that you know there are no seeds in the system there's just uh stock additional stock you know grown stock to different assets over time god and then my last question um like i really like frax i think the model is pretty solid but i understand that the collateral piece and like your viewpoint on that with like negative carry and i think it makes a lot of sense um but do you know how like frax wants to move towards like tracking cpi with their like fpi uh index let's say or token and like i think my understanding is that the way they're doing that is they're basically farming their collateral and using that earned yield to basically track cpi which like increases each each year um but if we have like if beanstalk has no collateral like or or i guess what are your thoughts on that like do you think eventually beanstalk will also move towards that sort of cpi uh peg and like if they do like how would they keep it if they don't have collateral so beanstalk in theory can issue assets pegged to arbitrary value as long as it has some way to determine the price of you know the beans that are issued relative to that asset so it could issue like a btc bean compared to wbtc it can issue a lot of different stuff uh now currently there seems to be by far the highest demand for uh dollar peg stable points but in the future there's no reason there is a little bit of economic complexity that uh may need to be figured out uh to to get it done in a low friction fashion and an efficient fashion but generally beanstalk could issue uh you know a cpi bean if you wanted to now personally i think the cpi is horrible and would never choose that as the index uh for inflation however uh you know think that there's something very interesting about some sort of hedged product uh but you know that's a little bit of a ways down the road but in theory it's totally possible sweet thank you appreciate it all right thanks casper and if you think of one later you can always hop back up um okay what percentage of the 77 million is needed at a minimum for the barn rays to restore the protocol to a working condition zero percent uh in theory if the protocol raised zero percent in the barn rays that would be like restarting the protocol which would be you know you could make the argument you know it'd be better not to start at zero uh because of the amount of exogenous demand at the moment but uh if it raised zero dollars in the barn raise maybe that means there is no exogenous demand so uh kind of cuts both ways there from turbo what is publius's day like what does your average day look like these days well it's uh different for each of us uh on this end it's a lot of conversations with uh lawyers and people that might uh participate in the pod right the barn mates that have questions about beanstalk and talking with beanstalk farms and people that work on beanstalk and you know trying to just stay on the same page as everyone basically because there's a lot of moving parts so uh and then there's a lot of coding going on as well on uh publius's end which i think is uh you know well you know wake up code go to sleep is the mantra i think they've been echoing recently so uh it's it's definitely grind season on this end of things but uh again feeling very enthused by by the opportunity here so this is uh you know the only uh the only reward for hard work is more work so uh this is uh you know this is all good stuff as far as we're concerned okay and i almost skipped one of harry's questions when is that wall street journal article coming out uh probably tomorrow not sure okay breen is uh breen is committing five bucks here hard and edgar allen pizza is matching it so okay uh booney boy is is asking for a smaller account what's the best strategy for for someone with a smaller sized wallet you know in order to invest uh you know we try not to give advice like that so i think you're better off asking the discord from neurovirus can you explain the reasoning behind the 33 33 split for example why wasn't it 50 20 25 25 or any other ratio well as we've discussed previously that split is pretty arbitrary and it's really a question of negotiating what's a reasonable amount of preference to give the bar and raise lenders uh given that historically you've only been able to get in the back of the pod line which uh was valuing being stuck at like 1.5 billion prior to the attack uh you know just even splitting splitting at one third one third one third and creating a new pod line is radically changing the opportunity to lend being stuck at a different price so there is some question of well you can increase the priority increase the payout uh create some sort of exclusivity for a period of time there's a lot of different ways to slice it but it's unclear whether any of that would need would be necessary or at the margin would uh attract more capital and you know therefore it's it's a question of what's what's the elegant economic structure and think that that makes the most sense in short scooby's asking uh given you guys have been doxed are you willing to share any more about your background and experience uh to be specific all of publius so i guess he's asking all three publius um now there was a um sorry there was a a podcast recently i think it was the bankless dao where where uh published went into a little more detail um but i don't know how much of that you want to repeat here publius but you could uh maybe give give scooby a little something scooby says just send me the podcast so we'll drop a link comes in with it yeah the bankless style podcast so that'll be good for you scooby no questions we're only we've only been on for like 17 hours in eight days so it's you know can't believe we're running out of questions here uh niblets i think we answered that um okay site says that the barn raiser tokens accepted will likely be usdc or usgt when do we think we'll have a definitive answer uh sometime before you know it starts in theory i have no idea i think to to be honest niblets that seems to be you know that seems to be one of the things that are potentially a you know a bargaining chip for the dao uh and so you know there's an ambivalence to commit at the moment because of that [Music] also i might add niblets what would you prefer you know it might be good for people to start throwing it out there if not so okay no preference all right just got a dm and also do you know do you think ultimately the decision will you know should be made through a snapshot vote as to you know what token the barn race happens in okay from scott c good evening is there any thought of creating a bar and raise nft for barn raise investors i wonder yeah yes there is there's a lot of thought a lot of that there is a lot of thought i wonder if um i don't know jww i don't know if you're near a mic and you want to come up and maybe speak a little bit about them hey hey hey i know you've been working with a couple of different um artists and you're in touch with with uh deez as well do you want to give a little update on where we are with those yeah so uh that well we don't want to put the car before the horse with this um but we are aiming to try to get some version of an nft out with the launch that'll happen um we'll be kind of giving more details of what that'll actually entail from an investment side um and what it will take but we're still first and foremost working through what the design is going to look like as you said dumpling but we'll keep the we'll keep the community apprised the moment that we have more information um but we just don't want to recommend to anything yet sure thing okay appreciate it well uh yeah um i would say yes we don't want to over commit but but get excited for something so um there's hopefully we can we can start sharing a little a little bit a little something for you here pretty soon um okay okay niblet says no preference they just want to know which bag to draw from which oh let's see gk zero three three is it's having a little technical issue that we'll try to address okay from bean bankman refried let's say bean raises enough through the barn raise are you worried about the imbalance of the split between the silo and the pod line going forward until the new pod line is paid off for example could there be a lower incentive to lp post unpause due to lower apr versus prior to the hack at the margin maybe a little bit but in the grand in the grand scheme of things it's like you know from 50 down to 33 is you know it's not the end of the world effectively it's like a third so um previously the lps were yielding 200 and something percent so you know now it'll be yielding 100 and something percent don't think that'll be the end of the world for being stuck although at the margin it probably will have some effect from harvey birdman could you potentially update the split if the 3333 isn't working out uh anything is possible but going back to like previous discussions around changing that 50 50 split don't think that's you know good for the integrity of the protocol slow day at the office guys what's going on here okay we got a hand we got a hand green hello everyone hello green hello um sorry to come on here like a small brain that hasn't done much homework i just recently heard about you guys i'm sorry about what happened and just have a super quick question um just wondering what is the what is the big incentive um because i was reading your your guys post on that restoring the fund is going to look like a seed stage investment um opportunity for people and i just i wanted to talk to someone about why it looks like a stage stage investment um just by reading it it looked like we would just get a higher interest rate for a couple days but so [Music] so so i i didn't write that but i i do have a sense of what they meant by that which is uh bean stock at this point it's a little bit more mature than it once was but the concept is that this is an opportunity to acquire bean stock or beans at a price or a cap or an implied valuation however you want to slice it that has not been available for a significant period of time if that makes sense so think that what they were getting at was that there there's a little bit of a a back in time aspect to when back when beanstalk more closely resembled being in like a seed stage you know and and therefore there's some sort of uh there's some sort of benefit there i think would be would be what we would make of that well it's mostly from the from the slice and market cap since we would since we would be re-capitalizing the protocol um it's an opportunity to help support it on the way back up correct and if if being and this is the substantive point if beanstalk only raises one percent of the capital it will launch at a million dollar market cap literally one so you know if you're that first investor in line it is sort of a seed stage to a large extent even if in practice the whole thing fails and then you actually are at 108 million instead of 1 million the concept is it's still a very in the comparatively to what beanstalk was offering prior to the attack it's a much earlier exposure opportunity or lower cost basis or lower market cap however you want to think about so pretty much there's um investors would be entering with no premium in a way uh well that might be an understatement whereas prior beans were trading at like 103 105 this is now entering at a discount um okay okay on discount because um you're buying under a dollar correct because of the interest rate okay okay wow okay thank you so much guys appreciate it yeah sure thing okay picking from several questions here uh from edgar allen pizza i'd love to hear more about the future of beans and how they can be used to provide liquidity if you can explain in more basic terms how the silo plays a role in that i'd benefit a lot from that also sure so beans particularly beans in the silo have positive carry and that positive carry makes beans a very attractive asset to trade against and so in short and bip 12 was the first step in this direction the ability to deposit various lp tokens in the in the silo such that the beans in those pools are providing positive carry to the pool that's a game changer for d5 or at least potentially it is and we would argue that it is because currently all these assets are trading against either eads which is super volatile or a negative carry stable coin and are paying the cost for that and so the concept of now uh a positive carry stable coin can really uh fundamentally change the structure of defy okay and just a quick one here i think we kind of answered it earlier but um hi could you explain what will happen if the raise doesn't get to 777 million will the protocol still continue uh the short answer is the the protocol will scale uh all of its obligations based on the percent of the fund raise that is complete so if it raises 50 percent the state of being stock prior to the attack will be scaled by 50 percent if it raises 30 percent it'll be scaled down by 70 and so on and just for reference dumpling i think you did skip a couple questions above okay uh what's the beanstalk forecast in 100 days back to pegging hard uh a hundred days from today uh god willing sir uh in 100 days being you know means god willing should be back to pegging hard okay and from not commissure any updates on the bug bounty initiatives not personally haven't been involved in that uh process but maybe if anyone who's who is involved is in class they can hop up here but don't see silo chat or sweet red beans who i think were the two people leading that so um don't have an update for you there okay from breen could you shine light on the price bean will be once it restarts if we start at the price from prehack we will mint a lot more because we're using a curve pool instead of the xyk pools what are your thoughts on this yeah there's a lot to be said here um don't really know yet what the right thing to do is think it might be a function of the [Music] success of the barn rays it's a very interesting question breen um and one i i don't have any at least at this point don't have any sophisticated thoughts to share okay we have a hand from slacking oh i think i can speak off um yes we can hear you okay yeah so the question is just something related to what is written in the snapshot uh so it says here just a piece uh participants can console at any time during the sowing period so long as there is available soil uh source will clear based on the weather at the time of the sow so uh i'm not entirely sure how the holes uh sewing period will transpire like initially i thought the weather would just increase and then the bids will just in some kind of fifo ordering uh i would presume yes that is true but the concept is that during the sewing period in addition to the bids clearing people can also get in line during the sewing period without having bid in advance so it's not like you know otherwise at the end of the bidding period all of the bids could just settle there'd be no need for the sewing period the point is over the three days people can then get in line as the system is clearing oh okay but the the whole reason for the bidding period is uh the boldness of well for beanstalk's purposes it's willing to pay a bonus for people to price the market and the system de-risks the more that it's bid right so there's there's a benefit to being stock but you know the reason individual individuals would want a bid would be the bonus yeah okay okay that makes sense thanks okay thanks lacking uh from long live bean can you explain what positive carry actually is fundamentally and contrast it to the default negative carry and d5 uh positive carry means receiving some sort of yield for holding the stable coin in the case of beans that's the bean senior ridge for holding beans in the silo in contrast there are stable coins that have a negative carry cost either an explicit rent associated with holding the coin like die or an implicit negative carry cost in the form of opportunity cost for holding the coin instead of lending it out effectively because if you can receive 10 or 12 for just lending out the asset there's a negative implicit carry cost associated with holding on to those stable coins instead of lending them out for that 10 or 12 percent okay and second question uh from long live bean what are the specific questions being asked by institutional investors or vcs regarding the barn rays and the future of beanstalk oh man there's literally infinite questions literally infinite questions um and one of the things that we were we were just thinking to ourselves is it so funny that everyone comes up with their own questions that are totally different so very hard to give a summary from bean boozled will bids uh be publicly listed listed for all to see duh this is all on chain baby so uh everyone's gonna get to see all this happen in real time i'm just looking for anything i might have missed uh here we go assuming we raised the full 77 million and our silo lps are fully vested and no haircut was there any lesson learned with holding vast majority of net worth in this protocol or do you plan on making any personal allocation changes to the protocol regardless of the assumed beefed up security well it's a funny question right because it assumes that's like the ideal portfolio allocation whereas you know it's probably important for context we're like 24 year olds like it's not like we have a lot of money you know so the fact that beanstalk did so well is really you know de facto it's the ma the vast majority of our personal funds if you know what i mean so it's like well uh in theory but then what you're really asking is uh how much additional you'd like to cash out and it's like well you know don't really feel like uh you know cashing out is the thing to be doing at the moment and it's like even at scale uh you you sell 10 percent of your beans you sell 20 of your beans it's not really gonna you know when all your money is in beanstalk it's like doesn't really substantively change your your your your allocation ultimately and it's like then you know beanstalk is gonna i don't know there's nowhere i'd rather have my money either so i don't know you know okay anyone want to come up on stage ask a question slow day in the office indeed jasper's got a question oh people complimenting dumplings hosting abilities and then he goes and does this getting cocky let's go casper what do you got oh shoot can you guys hear me i can't know yeah um well i was talking i think i was talking with austin earlier in the discord about like the whole like death spiral thing with algo stable coins like would be curious to hear your thoughts on like why the credit model might be better than other models for like or or how it would react in the in the death spiral scenario um and wiley yeah sorry i i no i'm sorry for cutting you off i would argue that the death spiral scenario is somewhat specific to algo or credit based stable coins uh when you have collateral it's not really that big of a problem like you see what's happening to mim where there's a deficit in the pool but they're way over collateralized and it's still you know worth 99.7 or something right so it's the death spiral scenario which has happened in practice to every other stable coin except for bean stock every other credit based stable coin is very real and in practice you know beanstalk has a wide variety of different complementary mechanisms designed to limit the the death spiral or the run on the bank scenario so the the first from the highest level beanstalk minimizes the run on the bank by not over printing if you look at historically all of previous attempts at credit-based stablecoins they all meant it according to the quantity theory of money or by when the price was one percent above a dollar they would increase their supply by one percent that is crazy beanstalk mints beans based on the amount of beans that need to be sold to return the price to a dollar so if over the previous hour a hundred thousand beans needed to be sold to return the price to a dollar only a hundred thousand beans would be minted independent of whether the price was 101 102 or 103 or two dollars and that market-based approach prevents over minting when the price is too high furthermore one of the things that creates a run on the bank is inorganic demand people that come into the protocol when the price is too high and are going to leave when the price is too low no matter what and any time you write into a smart contract that at a given price there will be inflation that does create some sort of perverse incentive structure uh whereby at that price there's going to be some inorganic demand for that asset and so bean stock via a couple different mechanisms the stock system being the primary one makes it such that uh your return for buying beans when the price is too high uh can only really be expected to be positive if you have a longer term time horizon and therefore you know at least from an incentive perspective beanstalk tries to limit the amount of money that is likely to run on the bank to enter it as possible however there's always going to be these scenarios where you have short-term or long-term significant decreases in demand for beans and that's where there are two main mechanisms one is uh conversions which which bit seven introduced whereby liquidity can be scaled down at the expense of you know the price can be saved at the expense of the depth of liquidity and then soil which is the core mechanism we're assuming there's demand to lend to be in stock the protocol can return the price to a dollar over time despite having significant outflows so all of those different things combined to limit as much as possible without guaranteeing or preventing it uh the prevention of it a run on the bank per se got it and i've never heard that selling piece to what's like how do you guys actually like sell the right amount of supply as opposed to just mentioning everyone so beanstalk doesn't sell it unless it's a season of plenty it just measures it and then mints it if that makes sense so it just measures over the previous hour how many beans needed to be sold for the price to be exactly a dollar or how many beans needed to be bought got it okay okay and like we want we want to like consistently be above like is it fair to say we want to be like consistently a bit above peg is that like i would argue the goal the goal of beanstalk is to regularly oscillate the price above and below a dollar does that make sense now now you may want the average price to be ever so slightly above a dollar such that on average there's being senior age but at a protocol level the goal of being stuck is not to just mint and be above one it's to to oscillate the price above one and below one and create utility by doing it however if it spends a little more time above one such that there's minting that's you know that's probably healthy got it sweet all right thank you guys thank you sir i have a question for you it kind of relates to what we were just talking about um you know as assuming that like right before the exploit we were kind of writing that like dollar three for quite a while and a lot of that was because we didn't have the generalized minting but are you ever are you ever um i'm just curious about your thoughts in a future where a lot of people are earning senior age but are not selling because they think that the best kind of like what we were talking about earlier that if they think that the opportunity cost for them taking it out of the silo is just too high are you ever you know would you ever consider updating the model to assume that you know 50 or 75 of the people are just going to keep their beans in the in the silo um if people really start doing that well in practice the model specifically makes no assumptions about user behavior whatsoever basically so instead what beanstalk does is it just takes a screenshot or a snapshot over the previous hour not a screenshot a snapshot over the previous hour to get a sense of the state of the system in particular the bean supply and the the weather and it tries to adjust the bean supply and the weather appropriately but that's all it does when we're looking at the lack of beans in a given liquidity pool um i guess i was assuming that people that you know by issuing that that senior age we're assuming that a certain percentage of those people are selling which is going to bring the price back down to peg no assumptions made whatsoever like the concept is every hour beanstalk takes another measurement because it doesn't know if people are going to sell or not right and it doesn't really care it just every hour it tries to adjust as appropriate based on whether people did or didn't but won't the price not go down if people don't sell that is a fact and the goal is to get us back down i mean to regularly oscillate well to be clear beanstalk will then mint supply until there is enough supply that the price returns to a dollar right so that's the the model so in theory you're totally right there is some some sense of well people may not want to sell their beans but that's where convert comes in yes yes okay well that leads us to our next question um because if i was selling anything it was in order to convert so um will conversions be available at startup well it depends if there's more than one liquidity pool or not if there's only one then well i guess actually that that's a stupid thing to say uh converts will be live upon launch i don't know why i thought about generalized convert there but um yeah you'll be able to convert there's no reason why you were why you shouldn't be okay great okay from gk033 how did the idea for beanstalk come about how is this idea of a credit-based coin that doesn't overprint thought of and also adding is an edit to the last question that casper asked if bean is never above peg if there's no apy and if bean doesn't benefit from an apy higher than i'm sorry um i'm not sure i understand the last bit of that question but um could you get a bit of a history where the idea of beanstalk came from well we had a previous conviction that the supply shortage in stable points and the negative carry were a big problem but in terms of a solution we're re we were really inspired by esd and the success of esd even basis in 2017 to me at the time it was very clear it was like a get-rich-quick scheme effectively for the early backers and the structure of the seniors seemed totally corrupt effectively and so didn't didn't pay too much attention to it basically and then when esd blew up that was very inspiring to give it another look and then we very very quickly fell down the deep rabbit hole here okay uh from geo three met i think we kind of touched on this a little bit earlier but i'll read it anyways um apologies for the dumb question i came via bankless uh via bankless as well and i'm still getting my head around the terminology bean silo et cetera if i had x dollars to invest and support beanstalk is there a documentation or guides that say start here and do this and if you had more then you would want to do this for example how you invest in the protocol basically i'm looking for various tracks based on investment and investment size yeah that's not something you're gonna find here what you what you will find is very clear explanations of what things are and how they work and how um how you can use them if you want to but no sort of like investment advice of any sort but geo there is a you know active discord you can head to the general there's a lot of people you can engage with and you know discuss that sort of thing with but okay i love chicago okay from jams question for me um how are the educational marketing materials coming along we've noticed some more interest from individuals uh that are new to bean yeah we have had a big influx of people um you know you've seen it in the growth of these calls and uh and you can also see it in the you know type of type of questions here um so i'm just noticing we're we're just about to go over over time so we should uh probably wrap it here pretty soon but there has been a lot of progress in different educational materials that should be coming out uh prior to the to the barn raise um so i know there's some videos being made there's um there should be uh quite a bit so we'll be starting to share that as we approach um monday and um yeah we're looking to to do a really big you know kind of marketing push kind of a ground swell to get you know the word out you know as wide as as we can and then also some sort of shareable stuff so that after you've um you know uh been a part of of the bar and raised then you can you know do a do a social post and and that sort of thing to to kind of show that that you were a part of the thing so without uh committing too much to anything there was a little bit of mention of nfts so there is we're really going great guns on that and uh yeah we're just really excited to pull this thing off so um i think we'll probably wrap it there um if you have any uh any last thoughts sir so mod asked us to just restate the time and info on the barn rays so that's scheduled to start monday at noon eastern the seven-day bidding period followed by the three-day sewing period starting monday the ninth at noon eastern so uh lots again you know lots to do between now and then but uh you know very excited okay well everyone thanks for thanks for coming by um we'll be posting more events for this week so uh keep your eye out uh in the events channel and [Music] yeah i really appreciate you all stopping by and look forward to seeing you again soon peace out y'all you