Beanstalk University Class #24

May 3, 2022

0:30 Any new updates or comments from the VCs? • 1:53 How is the team and Publius doing? • 4:48 Discussion on governance and security • 5:24 What will be included in the code that Halborn will audit? • 6:30 How is the governance being update? • 7:30 Leverage opportunities for Beanstalk and zero fee DEX • 9:30 Is there a more effective way for the protocol to deleverage? • 11:15 Should Beanstalk make a one time change to weather or change altogether? • 14:30 Is there long term system risk to protocol with an increasing Pod Line? • 15:55 Can you change the way the weather is priced in the long term? • 18:25 Is there a way to change the volume of debt by relying on Soil issued? • 21:10 Can you explain the Pod Rate, generalized minting, and generalized convert? • 25:15 What is the potential for Beanstalk? What is its potential future? • 26:55 What can be built on a positive carry stablecoin? • 28:46 What happens if a large investment comes into the Silo quickly? • 30:30 What is positive carry? • 33:10 What is Root? • 36:11 How is Weather calculated and what changes the Weather? • 38:30 Measuring demand for Soil • 42:52 What is the elevator pitch for Weather changes? • 43:32 Do we know who the diamond BeaNFT holders are? • 45:35 Will bots snipe the Soil and is this bad for the protocol? • 49:23 Should Seeds be removed from the protocol? Should they be liquid? • 54:06 Will the Barn Raise be postponed? • 54:52 Should Beanstalk unpause before or after audits? • 55:50 When will Trail of Bits audit start? • 56:50 Should the Barn Raise start after or before OTC enters? • 57:40 Will Publius sell their diamond BeaNFT if they have one? • 1:00:27 What is the metabarn?

Beanstalk University



Topics Covered

  • Areas of priority going forward
  • Deep dive on weather
  • Long term future for Beanstalk
  • The benefits of being positive carry
  • What is Root Finance
  • and more...

Notes and Questions

Any VC updates?

  • No substantive updates yet, hope we will have more to share by EOW, will continue to update everyone in real time

How is everyone holding up?

  • Team is enjoying the process
  • Lot of moving parts, in the thick of it, nothing to complain about
  • Publius’s thoughts on the protocol
    • High priority areas:
      • Governance and Security
        • Halborn audit is coming May 9 — we have to figure out what code is included and what we need to get ready for that audit (e.g. we had the generalized convert code ready pre-exploit)
        • Multisig setup
      • What are the highest opportunity areas for Beanstalk now that the exploit provides a bit of a blank slate?
        • We are thinking hard on this
        • One that comes to mind is the idea of a Beanstalk DEX

Should we reset weather in some way?

  • For the idea of a one-time change, we are hesitant to do that given we believe the market should discover price on it’s own
  • Don’t want to lower the weather drastically in favor of taking a more conservative approach to keep that eye popping weather as is so as to ensure that we continue attracting creditors
  • For the idea of changing the way weather is calculated long term, we believe we have already made many weather improvements and are sitting in a good place, but open to any ideas

Can you explain the pod rate and why that going down is good?

  • Pod rate is the debt level. As debt level goes down, the system becomes more healthy

Can you explain generalized convert and minting?

  • When Beanstalk launch, the only pool that Beans were minted off of was the Bean:ETH Uniswap pool. Prior to the attack, Beans were trading in other pools like Bean:3CRV. Generalized minting is simply the ability to have Beanstalk mint beans or issue soil based on more than 1 pool
  • Generalized convert is the ability to convert Deposited Beans to Deposited LP tokens and vice versa. Generalized means this ability will extend to multiple pools (before the exploit, this was only available for the Bean:ETH pool)

What is the vision for the future of Beanstalk in 3 years?

  • Transitioning from negative carry stablecoins to positive carry stablecoins (Beanstalk is the first ever positive carry stablecoin) will be huge for Defi
  • It’s going to be revolutionary. Excited to see all the stuff that can be built on top of a positive carry stablecoin

Hypothetically, let's say we have a completely successful Barn Raise and Beanstalk is more or less where it was early April but now has a new Pod Line. Can you walk us through what would happen if a pod of fomo mega-whales decides to splash the Silo with $500M in a short period of time?

  • Beanstalk would be able to mint beans to meet that demand, so we could expect a large amount of minting

Publius, you talk a lot about "positive carry." What is it? What is "negative carry"?

  • 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

What is Root?

  • You can look at the success of Anchor at creating demand for UST, allowing Terra holders to earn a fixed yield
  • Root aims to create an attractive and sustainable source of fixed yield that will compete with Anchor
  • Because Beans have positive carry this becomes so much more powerful because the yield comes from the Beans themselves (protocol native interest for Bean, as opposed to Terra having to rely on some outside subsidy to be able to guarantee the fixed yield).
  • Let’s say on Anchor you can lock up $100 of Terra to make 25% fixed yield. Because of positive carry, all that needs to happen to guarantee this 25% fixed yield with Bean is that one person needs to lock up $25 at the beginning of the year. Another person can put lock up $100 expecting to get 25% fixed yield. Then it’s basically a rate swap — the second person can get the 25% fixed yield (from the $25 locked up by the first person), and then the first person can get all the rest of the upside from the total $125 that was locked up between the two over the whole year.
    • So Root, by virtue of it being built on Bean, a positive carry stablecoin, will act more like a rate swap, not a subsidized yield which is Terra/Anchor. Very cool new financial primitive being created on top of Bean

What are the factors that change the weather?

  • Every season the protocol looks at the price and debt level and the change in demand for soil over the previous 2 seasons. That last part (measuring demand for soil) has been iterated on (BIP-15) and is complex, you can read the whitepaper for more.
  • This chart from the whitepaper illustrates the different cases that lead to different weather changes
  • Please refer to the whitepaper for an in depth look at weather
  • “on a scale of 1 - 10..... whats the probability we get offers by weeks end?? 38mil? the whole 76mil?? we know its speculative but all us beans want to know Publius's opinion on this..”
    • Time will tell

Who are the Diamond NFT holders?

  • While answering this question, many people bought Diamond Bean NFTs in real time and showed them off

Did you foresee bots sniping the soil? Is this bad for the protocol?

  • This would only be the case when there is excess demand (thats the only time soil sniping happens). Excess demand is good for the protocol

Should we kill seeds on relaunch?

  • Seeds are really just an accounting mechanism right now because they are not liquid
  • In practice they don’t really exist
  • So the question really is do we make them liquid or not (we are leaning towards not doing so)

What are the odds the Barn Raise actually start on Monday?

  • It would come down to a DAO vote if we would postpone it further, but the chance that that happens is indeed nonzero

What do we think about negotiating with OTC about restarting post Halborn and before Trail of Bits (TOB)?

  • Hallborn audit will actually end after TOB (even though it starts earlier), because these 2 firms have different auditing timelines

When is TOB scheduled to start their audit?

  • June 2

Can we start BR and allow OTC to come after to fill the gap later?

  • The DAO can decide on any timeline
  • The Barn Raise can always happen
  • Last, are Publius wanting to sell their Diamond?
    • Over Publius’s dead body
    • Transcript

      okay so it's 7 32 we will get underway um i'm looking at the look into the class discussion and really uh so to kick us off um it looks like so so altimus um kind of reached out actually no so first first in the first actual question in the class discussion is bruce wayne asking probably a question you've heard a lot recently published any new comments from the vcs so nothing too substantive to report today is tuesday um the hope is again if we work back from the top a similar timeline from last week where i think on friday the the movement to push back the barn raise was really started uh the hope would be that by thursday or friday of this week to have something more substantive than just chatter to share with the dow not sure if we'll be successful there but uh you know that's we'll continue to update update everyone in real time as there's more information not much has changed substantively from the past 24 hours but uh you know what we'll we'll keep everyone in the loop as that changes [Music] no doubts there cool um so altimas just offered services in class discussion as well looks like uh crucible class got him hooked up with job board which is great to see um looking down through the discussion i think the next um i think the next question is from scooby 22 who just asked how everybody's holding up i'll turn that over to you publius how are you holding up how do you think team's doing [Music] well personally as we said before we're you know we're trying to enjoy the process and there's a lot of a lot of things going on a lot of moving parts a lot of real time optimization happening but uh you know in the thick of it nothing to complain about so uh in general doing pretty good uh it's stressful but this is uh you know the nature of the beast my friend uh nothing to complain about and then the rest of us you know generally on the publius front think we're doing pretty good uh hard at work and lots going on but you know [Music] complaints about having work to do that's generally everything much better than have nothing to do so uh good problems to have what about you rex i'm i'm personally i'm great i'm enjoying time with my family and uh and if anything i felt bad about being a little bit more out of the loop and i like to be while everything's going on and i've said it before this this little trip was planned even before i knew what beanstalk was so gotta gotta do that thing and do the dad time but uh but yeah really excited to see how things are developing and really impressed with how well the team is doing and how hard everybody's working even though things are uncertain yeah i mean well it's uh it's a crazy time but uh tough times tend to tend to yield some incredible things so you know we're i think collectively we're all hoping to do something pretty incredible here kept being stuck back up and running [Music] couldn't agree more all right so looking through the rest of the class discussion i see a lot of you know really good chatter not a lot of questions what i'll do so jdubs jw's fast fashion why don't people try to come up here that's exactly what i was just going to say have we yeah what's on the same page my friend on the same page if anybody has any any questions feel free to raise their hand i'll bring them up on stage and we'll go from there i'm not sure if we missed it because we showed up a couple seconds late but uh jww i think told us that the focus of today's class was more on the protocol i mean obviously we're happy to chat about whatever but uh kind of excited at the prospect of chatting a little bit more about beanstalk itself for the first time in a long time yeah i mean it so while we're waiting is there anything specific you'd want to cover in that regard man there's so much uh in theory to talk about uh from our perspective at this point there's a couple high level axes that we're probably analyzing things on one is the governance front and security at governance and security are two different axes but obviously highly related at this point and then particularly around the security front there are two audits scheduled the hal born audit is scheduled for may 9th a week from yesterday so the goal is to have uh you know code ready for them to audit on may 9th and the question is well what will be included in that code so one of the things [Music] one of the things we've talked about previously was the [Music] fact that all of the code for is minting generalized convert the farm all of that was basically done prior to the attack uh shout out to all the backhand engineers uh for for crushing all of that and in short the hope is that all of that will be included in the hal born and trail of bits on it so when we talk about the protocol restarting the the thought is that from a feature perspective beanstalk is going to be you know continuing to to innovate and push forward uh however it will be all of the code that goes live will be audited uh which which will hopefully be really cool uh and you know those are probably the the main two axes at this point uh and on the governance front uh obviously getting the multi-sig this process set up in a process uh a safe uh process set up around that multi-sig it's very important so [Music] uh our understanding is being stock farms and spending a lot of time trying to figure that out and you know it's uh not so not so simple to get that right but a lot simpler than on-chain governance at least in theory so uh those are the short-term two main axes and then a little bit longer term thinking about what else what else the protocol should really or have or need and in particular in the context of after beanstalk was attacked a little bit of a blank slate what are the highest leverage opportunities for beanstalk and it's funny today i think i saw a proposal to lower the trading fee in in the three curve pool one basis point uh and from four base response and this is highly aligned with our thesis that trading fees on decentralized exchanges are raised to zero and that being stock could potentially support the first zero fee dex and what you can build on top of that dex is pretty cool in theory uh now lots of other stuff that are like this decks a little bit more in the future that get us very excited but none of that excitement has really waned in lieu of uh or in light of the the previous two two and a half weeks [Music] that's good stuff so american pharoah has been waiting so be real i'll get you after american pharaoh but i want to bring him up for them up first i should say just because they were ahead of you in line he real but we'll get you to all right american fair you are being invited to stage now you are good to go so go ahead hey rex hey uh publius great to chat with you all and uh excited to talk about the protocol instead of the the barn raise for a change uh i guess one opportunity that we chatted about a little bit was the potential to uh perhaps use this as an opportunity to reset weather and i guess that's just coming from this view that there might be a more effective way for the protocol to deleverage particularly as we had extremely high weather that was going down maybe like three percent per season um but then there was like pretty tremendous profit to be made from the soil sniper bots so i'm just curious how you think about um that i know we talked about it briefly before but i sort of sandwiched then with a conversation mostly about the vc raised so i honestly would just love your take on on how you're thinking about that at the moment so i've tried to give this a little bit more thought but think we've kind of come out in a similar spot to where we left our left things last but we'll try to elaborate a little bit further so in short in particular with reference to the premium that the soil snipers were receiving for lending to people and then being able to sell it on the pod marketplace that premium is one that you could argue should be as close to zero as possible but in reality beanstalk is always happy to pay a pretty high premium and i would make the argument we would make the argument that uh whereas you you know in the short term you'd like to have it close to zero as possible over longer periods of time the real thing you're optimizing for is minima minimizing the the period of time where there's not demand for soil where the gap is zero let's call it uh or negative uh so instead of there being some sort of premium that beanstalk is paying for people to land immediately now there's now there's a gap those are the instances you want to avoid at all costs effectively because that's when you're not going to have lenders maybe you will maybe you won't but having that premium in the marketplace is one way to guarantee that you have lenders and attracting lenders is the main priority so with that as as the macro background then the question becomes well should beanstalk either make a one-time adjustment to the weather uh or make a change to how the weather is changed altogether together think that both are reasonable conversations and should be had with regards to the concept of a one-time change we're kind of hesitant to do that just because it's good for the market to price itself and it would be very hard to i mean i guess you could make the argument that 500 is a weather target but frankly the structure of lending at the back of the pod line after being being stopped is fundamentally different than lending in this round for a variety of different reasons or even participating in the barn rays and you could make the argument particularly given that beanstalk is issuing more debt that from a lending perspective it may be less attractive to lend to being stuck and get to the back of the line now the mass amount of demand for the barn raiser otc sale that we may end up seeing could it could in theory result in large demand to lend to be in stock at much lower weathers even after the restart in which case you'd expect there to continue to be a premium on the pod marketplace for pause at the end of the line compared to the weather and in short you know i don't know if that's a risk worth taking uh that you lower the weather too much and then at some point there is not enough demand for loaning to being stuck at a lower one of the things that make money to bean stuff very attractive is that eye-popping weather and well you could argue if beanstalk needs to attract millions of dollars of loans it's much better to be at five hundred percent than fifty eight hundred percent and it's very hard to argue with that the real theory is at a macro level buy over a beanstalk minimizes the chances that it has short-term periods where the price is below one because there will always be excess demand for soil if that makes sense so and you i guess you could have very short-term increases in supply where beanstalk does need to increase or issue soil even if there isn't actual major changes in the price or demand but in the grand scheme of things uh those are minor marginal costs compared to the larger cost of ever having a period of time where the weather is too low and you start to have a negative feedback loop so make the argument with a lower pod right now in particular there's that's not such a bad thing as well um but it's just a question of risk reward and what is the benefit to being stock of lowering the weather how much would you lower it it what's the marginal benefit of lowering the weather by fifty percent by 100 by a thousand by four thousand percent uh compared to the potential cost of lowering it too much it's very hard to to know that at this point in time so uh we tend to think being conservative here makes the most sense but uh no right answers per se [Music] i think that makes sense in terms of keeping attractiveness of lending in the short term i think the main worry is just does that add sort of long-term systemic risk to the health of the protocol if you just keep putting that much debt into the pot line especially if we're seeing market demand tends to be higher than what the current weather has been throughout the soil sniper and what we're seeing as we think about the barn rays and the private sale so i i'm definitely with you i don't think we want to jeopardize whether or not in the post bip9 regime the idea is that the number of pods issued will never increase unless the price is below one or you have some sort of issuance like the barn race right so whatever the total length of the pod line is whenever beanstalk restarts that should stay constant assuming the above one so it's not a question of issuing too much debt uh maybe it is right maybe it'd be better to lower the amount of pods but in the grand scheme of things think [Music] i think that's probably a marginal benefit right 650 million pods versus 700 million pauses that really at the margin gonna make a difference like probably not yeah fair like i just wonder if there's a way to sort of allow the market to price the lending in a similar way to how you structure the barn race right so that this is the big question right can you change the weather can you change the way the weather is priced long-term and here it's a very difficult question because on the one hand would argue that there's very clearly some major inefficiencies in the weather right the weather's lowering very slowly and being stock could is could clearly pay a lower rate however the risk is assuming that you you lower the rate super fast you got to be able to raise the weather super fast and from an incentive perspective it's really important to keep in mind that one of the key parts of the incentive structure beanstalk creates to create an efficient lending market for soil is that in addition to the first in first out payment schedule funds for harvesting whatever you want to call it the the fact that the weather won't increase that much in a short period of time makes it such that the likelihood that the marginal benefit for waiting a couple more hours to lend to the protocol versus the risk of someone getting in line before you is uh very low compared to if you have the weather potentially increasing dramatically over short periods of time that may not be the case if that makes sense and you also need to deal with the case of the weather increasing too fast into infinity during periods of time or for whatever reason there isn't demand beanstalk has a period of time where at any weather it's unlikely it would have attracted enough demand for soil so it's like it should just kind of raise it pretty slowly so it's very hard in an autonomous fashion to figure out which of those cases you're in and therefore bean stock at least currently inside of being very conservative across the board and how it changes the weather but it's not to say that it couldn't be more efficient but i think it would be very it's very tricky to make it more efficient than it currently is meaning the cost inefficiency and structure is by design and it's a cost being stuck it's willing to accept to create a much more efficient soil [Music] understood on the mechanism and i think i'm coming around to that point of view maybe a final question that i can pass the stage do you think it's possible to have that same pricing mechanism take place with lower volume of pods uh especially if we're seeing arbitrage for the people who can bought it is there a price discovery mechanism that could theoretically add lower debt not by changing the price mechanism but by changing the volume of soil issued yeah for sure right you could have currently have under bip9 if beanstalk pays off a hundred thousand pods at the start of the season it's gonna be willing to mint a hundred thousand pods during the season you could say it you know multiply by by fifty percent such that being stock every pot it pays off it decreases the length of the pot line by half of that you can write that's a very simple rule to implement there's no reason per se that that's better or worse uh from our perspective the elegance of having the pod line be the same is apples to apples it allows for a lot more clarity in terms of measuring demand for soil it's somewhat consistent are the pods in the same place at line is there demand at a different weather instead of introducing a second variable however you could say well it doesn't actually that variable doesn't matter beanstalk doesn't actually care the only thing it cares about is is there demand or not so maybe it doesn't matter and from that perspective then you could say well it's better to to lower the amount of outstanding pots and maybe it is however in the grand scheme of things you don't want to lower the amount of outstanding pots too much from our perspective it's still really a question of the pod rate so uh uh probably unrelated to this particular question but yeah in theory you could add a multiplier to the to the soil available you know to decrease the amount of pods for sure that's possible i don't i don't think we have any strong thoughts on that but yeah there's nothing wrong with it thank you publius appreciate it all right so um url had to jump um i'm gonna have so uh terribly dropped a question in the chat we'll do that then we'll do e real actually dm me his question we'll get that after we do tear voice so turbulent staring away reel i apparently simply i did busy busy bean busy farmer got a lot of stuff to do couldn't hold him for too long we'll get uh we'll do chair boy and then we'll get a reel's question um but you'll you'll like earls once i get to it so fairboy asks can you explain the pod rate and why that is why that going down is a good thing can you also explain generalized minting and conversion [Music] sure let's start with the pod ring so the pod rate is the debt level of beanstalk pods are the dead asset and the pod rate measures the outstanding unpaid or unharvestable pods the bean supply and so any debt based or credit based system fundamentally the the debt level of the system is the main indicator of health of the system so beanstalk you could argue the price of a bean and the price being at a dollar that's another major indicator but the debt level is the max the biggest macro indicator of the health of the system the price could be at a dollar but if the debt level is increasing system is becoming less healthy at least in theory and so the concept is the more the lower the debt level the healthier beanstalk and therefore the debt level the pod rate decreasing that was a big proof of concept that an autonomous credit based system could actually deleverage and pay off its debt that was a pretty big deal at least in our opinion it was so to now talk about generalized convert and generalized minting when beanstalk launched the only pool that beans were minted off of was the bean ethernet swap pool based on the ratio of beans to eat compared to the usdc eat ratio on unit swap v2 and prior to the attack beans were trading on multiple pools on multiple exchanges including the largest pool at the time was the bean three curve pull-on curve and in short generalized minting is the ability to have beanstalk mint beans or mint soil based on more than one pool so that will even if beanstalk only launches with one pool the concept is the ability to mint off of multiple pools should be should be live such that adding pools to the minting schedule is pretty simple now generalize convert is the ability to convert deposited beans to deposited lp tokens and deposited lp tokens to deposited beans using the various different available convert options there were two different converts prior to the attack where you could basically either convert be deposited beans into deposited bean eat lp tokens for the unesco v2 pool or you could also convert deposited beans into you could do that anytime the price was above a dollar without adding additional aetherium or you could also convert deposited beans into deposited lp tokens at any price uh by adding additional ethereum and depositing it and in short this was a stock efficient way to change your position within the silo where you don't have to forfeit stock you're not withdrawing and then redepositing you're just converting within the silo and then on the flip side when the price is too low you could also convert your deposited lp tokens back to beans and originally convert was only live in the beneath unisa v2 pool but similarly to minting the ability to convert should be live across a variety of different pools even if beanstalk launches originally with only one pool whenever multiple pools are live the ability to convert in those pools should be should be supported very early on [Music] so thank you for that explanation um yeah again it's it's nice to have those conversations about things that we've talked about in the past you know things like generalized convert rather than yeah bond raise and exploit um so along those lines so eral's question was it wasn't real precise it's more like uh you just requested if you could just kind of talk for a minute about like kind of give a sense of what beanstalk could potentially look like post um barn ray's post recovery a couple years down the road and just kind of give a vision for the future of what some of those what some of those potential opportunities are just just give a picture of what you you see in the future well that is quite vague admittedly it is um so uh here i will read you exactly what he wrote um so um evil says how to jump it would be great if publius could help some of the new folks who weren't around for the pre uh exploit classes to understand what beanstalk's potential is like if you give a sense of what beanstalk could look like in three years that would be a great way to energize people so i i it's no more big than what he wrote in the dm but to me a classic case of the process including the uh the meaning oh uh in short bean doc and beans have the potential over a short period of time to radically transform d5 the transition from negative carry stable coins to positive carry stable coins and venus the first positive carry stable coin is it's unclear to us how large the importance of that transition are but we think it's very large and so when you think about what can be built on top of a positive carry stable coin kind of the world is your oyster and there's already different uh ideas for protocols to be built on top of beanstalk uh root is is an idea that is being created at the moment it seems and that's very exciting that there is at least one protocol already in the works to build on top of beanstalk and the concept is beans are supposed to be a financial primitive stock it's supposed to be a financial primitive and what can be built on top of it is unclear but we're very hopeful that the design the design of the protocol the fair launch and the economics that are designed to reward all of the the participants in a very fair fashion that that will that will have a very powerful effect on transitioning d5 towards more positive some systems [Music] very good much appreciated um so actually you mentioned rude um is it is it worth having maybe do you want to talk for a second about root or you want mr manifold to come up and talk for a second by root is that worth worth covering in this in this setting real quick or would you want to move on to the in the next question or i think on the in the last uh ama that was signific there was some decent chatter about roots so unless people have you know specific questions and then obviously happy to either address them or have manifold address them or whatever but uh that's no problem at all we'll hold off for now and if folks have specific questions they can either uh come up on stage or drop them into the chat okay so next in the chat so uh we've got j dubs and uh has a has an interesting hypothetical so um j-dubs writes let's say we have a completely successful barn raise and beanstalk is more or less where was in early april but now with the new pod line um can you walk us through what would happen uh if if a pot of fomo mega whales decide to splash the silo with 500 million dollars in a short period of time [Music] well that's a lot of demands so you know beanstalk would be able to mint beans to meet that amount of demand but it's likely that the bean supply would grow very significantly in those instances it's the amount of supply growth is dependent on the beans that are sold obviously so it's hard to predict exactly how many beans would be minted in that instance it's dependent on the time over which that capital comes in the price of the beans that are bought the beans that are sold into that demand so a lot of different factors but yeah that would be a pretty crazy [Music] crazy thing [Music] indeed it did take me for a second it didn't take me a second for my brain to catch up the fact that a pod could be both describing a dead instrument in beanstalk or a group of whales so thanks for that j dubs all right um let's see let's see okay so next next question we've got a lot of good comments and chatter the discussion next question is actually from jdubs again and uh yes poo please could you you talk a lot about positive carry what is positive carry what is negative carry and is there a hairy carry which crucible klatz has already addressed but positive and negative carry would you walk through those quickly for sure so carry refers to carrying us which generally is the cost of holding something so a negative carry cost means that you need a to hold a position if if that makes sense so whether that's an implicit or an explicit negative carrying cost in the form of plus it would be some sort of rent or fee for holding the token in the case of die for example there's a e that accrues uh to the cdp as an example of an explicit negative carry cost or there's implicit negative carry costs uh that that are from the opportunity cost of not doing things with your stable coins so in particular if you can hold your stable coin or you can lend it out and receive interest passive interest then there's an implicit negative carry cost for just holding your stable coin and doing nothing with it there's an opportunity cost there so the current structure of d5 is that all of these different stable coins have negative carry cost either implicitly or explicitly or both and beanstalk and beans are at worst neutral carry if you're holding beans in your wallet circulating then they're neutral carry there's no fee associated with it whatsoever but if you hold things in the silo or nlp tokens in the silo or i just you know liquidity pools that then you deposit the lp tokens in the silo then you can receive bean senior rich you can receive yields you can receive positive carry you can get paid for holding your beans so the difference between negative carry stable coin where there's a cost to hold assets and beans where there's a benefit or you're getting paid to hold your assets that's the difference love it all right um so so beef ons is the next uh the next question uh question in the uh in the chat and they do ask if we can get a high level overview of root and um again i hate to throw that on yet um you want to pull manifold up for just a an elevator pitch we can try to do it so yeah we need to work on our elevator pitch for root anyways so if you look at the general success of anchor protocol at creating demand for ust for tara particularly there's a massive percentage of the total terror supply that is deposited in anchor receiving fixed yield and in short the concept is that if you build a fixed yield protocol on top of beans with their positive carry compared to building a fixed yield protocol on top of ust with its neutral carry there's no opportunity to earn protocol native interest just from holding ust instead you have to deposit your ust and anchor and the yield from anchor is totally subsidized there's no there's no place that money is really coming from or in reality there's not the difference is in the case of root because beans have positive carry there's a fundamentally different relationship between the the the person that's locking in the fixed yield and where the yield itself is coming from if that makes sense because lock up uh call it a hundred dollars at a 25 a year rate and then the in order to for the protocol to guarantee that it can match that obligation at the end of the year it just needs someone at the beginning of the year to lock up 25 or 25 and then from a trade perspective uh one person gets the fixed yield on the hundred dollars at 25 and then the other person gets all of the upside on the growth of that total 125 dollars over that whole year and so it's effectively a rate swap protocol instead of having it it be like a subsidized yield there's just a rate swap and it's a very unique financial primitive as a first uh first thing to be built on top of beanstalk i think it's a very nice thing to create a simpler way for people to participate in the beanstalk senior rich and across the board it's a very cool uh it's a very cool idea in our opinion agreed and good elevator that was that was good good overview not real long just right all right um okay next in the chat rg asks can you explain how exactly the new weather is calculated every season what are the factors that change the weather yeah doggy that's a that's a loaded question this is a throwback this is a throwback question we've been talking about this for a long time so in short bean stock every season come looks at the price whether the price was above a dollar or below a dollar or above peg or below pack the debt love uh whether the debt level is excessively low uh reasonably low reasonably high or excessively high as defined compared to predefined rates uh the current rates are five percent fifteen percent and twenty five percent so the debt level has been excessive for a long period of time at this point and then third the change in demand for soil over the previous two seasons so in particular the measurement of demand for soil is one of the things that has continued to be refined and in fact we'd have to look at a bip i don't even remember what bibbid it was bib fifth 16 uh hold on trying to pull up the github because i don't think the website has it anymore to figure out exactly what it was one second the this is not good video content but bip you're good i think it was 15 i think it was bit 15 uh can't actually find it here [Music] but i think it was big 15. either way the idea is that bib 15 hold on i'm gonna look at the white paper i'd prefer to give people good information here one sec do it and if i was better host i would have these items up as well i'm looking through the chat and trying to control what questions are coming in and stuff so you'll forgive me for not having it at my fingertips as well yeah bib 15 white the white paper says version 1 1.15.0 uh was updated to reflect the new method to measure demand for soil which in particular the the demand for measurement there's a couple different cases that need to be handled and we're going to try to give you the full breakdown so in particular there's two ways to look at demand for soil what is the amount of soil that has been sown into over the course of a season and then the second is the amount of time that it takes for people to lend to beanstalk so the latest uh way that beanstalk measures demand for soil the simple the first two things the price uh and the debt level those are pretty basic if that makes sense or more easy to understand one would think and happy to break it down further people would like but the more sophisticated thing is the demand for soil where first beanstalk looks at a was all of the soil stone or all but one soil sown over the course of the season and in the there's a lot of different specific cases in the case where the soil was not sewn in all but we'll just say all but it's really all but one there's a little buffer there in all of the soil in the previous season but it was in this season then demand for soil is considered increasing demand for soil is either increasing stay or decreasing and the idea is that if there is demand for soil for all of the soil in multiple seasons then beanstalk bears the time it took for the soil to be sewn in each of the previous two seasons if that makes sense so the the other case is that for soil one for all well in the previous two seasons uh but that was uh there was a similar amount of demand for soil in the other two seasons in which case demand for soil would be steady if that makes sense so i think we're kind of rambling here trying to do a good job of summarizing like 10 different rules that beanstalk has in a short fashion but would recommend if you're if you're curious for all of the rules to look at section 8.4.5 in the white paper uh that that uh lays out in full how demand for soil is measured but in short it's about uh the amount of soil that was sown and the time and to answer then your question in full about how the weather changes work there's a nice chart on page 21 of the white paper or it's really two charts that lay it out in two different fashions there's all of the cases on page 20 that are for a given price and a debt level and a change in demand for soil what is the weather change and beanstalk basically based on the price the debt level and the change in demand for soil identifies which of the 24 cases it's in and then changes the weather based on this you know the hard-coded weather changes as of now so all of that is detailed on pages i mean the the weather changes are a significant portion of the the white paper so i think that starts on page page 15 and goes all the way to page 22 or something again not not the best audio content but i figure it's good to to give people more resources and happy to explain it in more detail if that's if people are interested but it's like it's pretty it's pretty it would take us a few minutes to give you know to give to would probably just end up reading or reading out loud a lot of the white paper because of how sophisticated it is if you know if people wanted all of the rules so not sure if that's helpful helpful use of time but happy to do that if people want what you're saying is there is no elevator pitch for weather change rules well the elevator pitches price debt level demand for soil but if you want to get into how bean stock measures demand for soil that's that's more complex that's it very fair all right american pharaoh was busting my chaps about skipping his question about diamond nfts looks like he got uh caught up in the chat again to the audience never hesitate if i miss a question let me know in the chat it's never on purpose um next one i see in the chat is from crucibleclatz and uh who writes on a scale of one to ten what's the probability we get offers by week's end uh you know for half the half of the the total debt the entirety of the 76 million they say we know it's speculative but all of us beans want to know publicis opinion on this i mean we're gonna find out you know we're gonna find out so time will tell [Music] very fair okay so i am looking down to the chat i think the okay so um next one i see is american pharaoh just asking if we know the diamond nft holders the only thing i know is that it's not me american fare i do not hold the diamond nft i wish i did if i did it would be my pfp uh i can say that i do know a couple of the diamond nft owners but uh can't tip my hat uh but you know if you uh if you want to try to buy one otc you know don't know if we can help you out there to be honest people people tend to love their diamond nfts but they absolutely do yes yeah it's like a couple people have uh there are a couple of people in the discord with their ps their diamonds so yeah know that there's a couple and then i think there are a couple also that are more low-key [Music] all right man the discord chat is picking up and i'm trying to keep up here so looks like the next question is again from rg who asks do you foresee bots sniping the soil and is this bad for the protocol and i'm not sure if rg is getting at um you know under regular circumstances which we have seen before you know soil sniping bots or if they're getting it something like the the the bar and raise i'll take your thoughts on whatever whatever comes to mind [Music] did american pharaoh just change their profile picture to a diamond pnft what's happening here oh my gosh that would be american pharaoh come up here and and and explain yourself yeah explain yourself what just [Music] happened all right rl i'd like to point out that that's that's red v i think that's red bean randy's old one did they sell it just sent the invite i think so oh my god that's beautiful in real time one eath pretty epic yeah money spencer money you know in some ways in some ways yes what's one even between friends right right great to be part of the club that's awesome wow that's pretty cool that's pretty cool in real time folks in real time [Music] all right so um how do you feel that's my question [Music] wow i i feel great uh you know it's been fun going through this i i think you all probably feel a little bit of the same way when you go through something totally uncertain for this it's a hack or a flash exploit um it's been fun just bonding with the community and going deep into it maybe we're in the same boat like i'm not quite sure what will happen but it's a fun ride it's fun to enjoy the process and uh hopefully the diamond bnft will uh will pay off one way or another hell yeah well the twitter spaces uh hopefully have been updated uh an updated pfp to rock love it should i trade out the og black bean i think think you might have to upgrade sir [Music] diamond hands only fair enough wow fun stuff what was the question you asked us before rex apologies no worries whatsoever so rg's question do you foresee uh bots sniping the soil and is this bad for the protocol i i think they mean during the bar race so during the barn raise i mean that would only be the case if there's excess demand and those are good problems to have so yeah you know never a problem basically [Music] all right see oh looks like looks like it looks like nasjack has outed themselves as a diamond nft holder so if anybody else is looking to grab one they can they can find nasdaq probably at the gym and see if they can hit him up okay oh okay so next question i see is from wonton and uh really interesting question um should we nuke seeds on relaunch again seeds because they're not liquid or just a a concept they're an accounting mechanism but in practice they don't really exist anyways so the real question is whether to make them liquid or not you know but i think in general the there hasn't been much pushback to the idea to not make them liquid so i think it's kind of already that's the direction everyone's likely to had i know there's a lot of discussion about phasing them out as gauging becomes um becomes something that's working but the gauge would still model the seed structure where you're receiving some sort of wow nas jack did an aztec just also ape a uh diamond wow he's people aren't holding people are feeling bullish people are feeling bullish i think indeed maybe an aztec just uh worked it out oh my gosh gaming my diamond bean nfp for like that like uncle rico with i had to get the hat the sunglasses the sun the sun and steel guys this is so awesome that's a nice one do you have a hat and as jack we still have some i think farmer dan saw some hats he does he's got hats but we were saying that uh under the cage structure the seeds would still be modeled to some extent you'd still receive chocolate over time depending the amount of stock you'd receive per season would be dependent deposited so effectively seeds but they wouldn't be permanent is the concept [Music] fair enough okay so man again lots of really good really good chatter everybody's pumped about diamond nfts in the chat trying to flip through to see if i miss anybody's question amongst all the other chatter as always i apologize um american fairy gives a shout out to the leadership i want to echo that love seeing how the leadership in the protocol the contributors have have really brought their their ageing um [Music] i i'm to the bottom of the chat and i'm not seeing any new questions so um i want to definitely open it up um if anybody wants to to drop more stuff into the chat or to [Music] um come up on stage okay uh should class go ahead so guilfoyle just dropped a question so uh asks what are the odds the barn race starts on monday should we be promoting it i mean ultimately it's going to come down to a dow vote whether to whether to postpone it again as if there is going to be any postponement further i think the odds of further postponing are non-zero you know that would probably be a good thing for evidence there is a chance otc deal being substantive in eyes not to say that the partner rights wouldn't happen in combination with it or something like that but whoa jww just went diamond everywhere oh my gosh everyone's flat everyone's relaxing are we the only i i don't know you know approvally said i don't want to speculate whether you have one or not but i feel like i'm like the only one now without a being a diamond bee i mean i hate to say this but do you think i wouldn't have a diamond bean come on like come on what kind of come on that's such a good one oh so fantastic i sort of interrupt i just had to you know strut my stuff on stage do it do it oh my gosh fantastic love it go go ahead boobies didn't mean to cut you off no this is fun this is fun our community is so awesome uh no i think you know hard to say guilfoyle hard to say that's the short answer don't want to be disingenuous and say like oh yeah it's definitely going to happen don't want to be disingenuous and say it's definitely not going to happen like at this point your guess is as good as mine and that may sound like a cop out but it's like we'll find out [Music] i think that's perfectly reasonable honest answer all right got a couple we got a couple more here in the chat um so so just a bean asks what do we think about negotiating with otc about restarting post cal bourne and before trail of bits audit hal born is probably actually going to end later than trail of bits each audit firm has different auditing processes and hal bourne has like an eight week process whereas trailer bids has a three week process different so trailer bits will start earlier and end later i'm sorry halliburton will start earlier and later [Music] good insight definitely appreciate that so to maybe to flip that question on its ear a little bit jubilees any thoughts on maybe maybe restarting in between end of trail of bits you know though they're it's going to be within a week of one another so okay all right gotcha perfect all right and um silva please has a good follow-up when does when is uh trailbits scheduled to start june 2nd [Music] about a month away all right okay so we're we're 28 um seeing really good chatter but not a lot of more a lot more questions than in the discussion not seeing anybody in requests to speak what do you think maybe we'll have last call and actually never been started to blow where i'm at um we'll have a last call and then we'll turn over to you for closing remarks speak now or hold your peace until tomorrow folks all right um anything to anything to close us out with oh just a bean stuck one in um they ask can we start the barn raise and allow otc to come after to fill the gap later [Music] you can like the dow can decide on any timeline but think that the barn raises like the ace up the sleeve you know you can always have the barn race i guess you could always take an otc money as well but the barn race is like good to have that in the back pocket [Music] agreement okay so we're at 29 it's pretty good place to to finish out for the evening publius i'll give it to you for for closing remarks [Music] wait there's another good question oh starting they always sneak him in at the end wait uh is it is it just a bean asking if you're waiting to sell your diamond yeah the abs answers uh over my dead body excellent wait so can we tell you something's pretty funny so absolutely uh all right i don't know how funny this is but our parents have my parents have in some room like four pictures of each of the beetles or one of each of the beetles it was this der spiegel art piece i don't know it's very artsy but for whatever reason the aesthetic kind of looks like the bnfts and so i've been meaning my dad that i'm gonna get him four nft frames and hang them up right next to the beatles yes absolutely and he's totally down wait wait the funniest thing is now and now that we're docs we can say things like that my my dad made like some some sweatshirts with the with the nfts on them so like we literally have like some some some some bnft merch already that my whole family wears constantly what do we have to do to get these i would go to the edition sir don't think uh i don't think they're uh available but at some point we'll send a photo or something of us wearing it indeed if they become available they would be possibly the hottest og beanstalk merch ever i'll tell them i'll tell my dad to get in in the business of selling some bean merch i think he needs the money these days get him hooked up with farmer dan man we'll be we'll be doing it yeah exactly love it love it fun fun stuff fun fun stuff indeed okay i am all right i'm it looks like we are rounding out um crucible class thank you so much we will enjoy the rest of our time and be back in our normal location as of next week um and yeah we'll close it out thank you everybody for joining it sounds like we're going to be talking again tomorrow in some capacity what what is what's tomorrow's event publius well actually i think i misspoke there was a a twitter spaces tomorrow but it got postponed so uh there may be some another thing that gets scheduled during the day but as far as now don't think there is all right sounds good we will be speaking thursday's jam packed up thursday there's thursday i think there's the dow meeting then there's the twitter spaces with american pharaoh and then there's yeah they'll be back-to-back on thursday night all right sounds good we will get the events calendar updated in the discord to reflect all that stuff j dubs uh you're up on stage anything anything to cover there might be a community event tomorrow uh dumpling and are figuring out if we can do it last minute where we might do something in the meta barn so we'll keep you guys posted love it thank you so much and you guys have no idea how cool the new meta barn is a dubs made it and you there's a race track there's like a little your guy can get on a motorcycle and you can race and there's all these boosts and stuff there's different games it's there's like secret passages it's amazing we're on it just before you guys gotta come that's awesome oh this is awesome all right a battle tech uh battle tetris tournament uh yeah it's gonna be super cool so that's fantastic all right more to come on that all right thanks for joining everybody have a great day electric electric take care everyone have a good night you