📖

Beanstalk University Class #25

Date
May 10, 2022
Timestamps
0:00 Intro and comments on Terra • 4:30 How much price variance is ok for a stablecoin? • 9:20 Wen generalized minting? • 10:05 Why is the NFT better for the Barn Raise? • 11:45 Publius thoughts on how UST affects the fundraise • 14:57 Updates on the OTC raise • 16:52 Structure of the NFT Barn Raise • 17:52 Do investors care about the NFT? • 18:58 The term stablecoin • 20:40 What if there were permanent Silo Deposits to lock liquidity? • 31:00 Beanstalk vs. Terra differences • 38:00 Comments on stablecoin regulation • 40:35 NFT vs fungible token for Barn Raise • 43:04 Halborn audit update • 43:45 Do we have to wait for the NFT art? • 48:25 Attracting UST holders • 49:35 Limit on LUNA/UST redemptions • 51:45 Why is there a limit? • 53:00 Soros style attack on Beanstalk vs. Terra • 54:50 Stablecoins vs. dollars • 55:53 Attracting UST holders to the Barn Raise • 58:57 Date for the Barn Raise • 1:01:10 Pod Line length stability • 1:03:45 How would Beanstalk respond to what happened to Terra? • 1:05:55 Beanstalk assets pegged to other values than the dollar
Type
Beanstalk University

Recordings

Q&A

How much price variance is ok for a stablecoin?

  • It is crazy for a stablecoin protocol to make any hard promise on stability
  • One thing to optimize for might be the amount of time below or above peg, but don’t think minimizing variance is the right thing to optimize for necessarily
  • Don’t think a stablecoin should necessarily always be worth its peg, but there is a problem if your users don’t realize that, so education about how Beanstalk works is important
  • Long term recovery of the system is more important than the short term

Wen generalized minting?

  • Beanstalk will relaunch with 1 liquidity pool for simplicity’s sake, but the code for generalized minting will likely be live at relaunch

Why are the NFTs better for the Barn Raise?

  • The main advantage is liquidity. With a fungible token, it’s unclear what liquidity would look like and how to incentivize it. Additionally, from a technical perspective, there would be dev work required for LPs to earn Bean mints.

Publius thoughts on how UST affects the Barn Raise

  • It sucks that Beanstalk is not on right now! Because it would be the star of the show :/
  • Terra exploding may not good for Beanstalk in the sense that people might get spooked about algostables
  • But also feel like there are people are looking for better algostables and we feel Beanstalk’s model is the best

Update on OTC raise

  • Capital commitments are probably up from 15% to 20%
  • with regard to macro backdrop, some people are nervous at least in the short term
  • But Beanstalk is a very contrarian bet and some people see that
  • “When the tide goes out you find out who is swimming naked”, the ones with their pants still on are looking at Beanstalk

Do investors care about the NFT?

  • Not really as far as we know

The term stablecoin as it pertains to Beanstalk

  • What would be a better name? Volatility minimization system?

Mechanic differences between Beanstalk and Terra

  • Terra is a mint-and-burn stablecoin, or a protocol-native collateral stablecoin
  • Terra uses LUNA to back the value of UST. When the price of UST > 1, you can burn LUNA in exchange for more UST and sell above peg. Vice versa, you can burn UST into a dollar worth of LUNA.
  • Demand for LUNA is what underlies UST. LUNA is the staking asset of the Terra chain, so in theory you get network fees and the like. But a lot of the demand for LUNA is speculative.
  • There’s no collateral whatsoever in Beanstalk. Beanstalk uses credit, its ability to borrow and remove supply from the market, for stability. UST is neutral carry at best, but Beanstalk pays you just to hold the stablecoin, otherwise known as positive carry.
  • The only way to acquire seignorage in Beanstalk is to own the stablecoin itself. In Terra, the only way to participate in upside is to buy LUNA.

Comments on stablecoin regulation

  • Honest comments would probably put a target on our backs…
  • It just seems like talk at the moment

NFT vs fungible token for the Barn Raise

  • The question is what happens to the Beans awarded to the AMM. It’s development overhead we don’t want to focus resources on at the moment

Halborn audit update

  • Going pretty well! No news is good news

Do we have to wait for the NFT art?

  • No, we can use a placeholder image. The art is not going to be the hold up here whatsoever.

Limit on UST/LUNA redemptions

  • There was a throttle on how much UST could be redeemed for LUNA, and then UST holders have to decide whether to wait or take 80 cents on the dollar for their UST and sell it, for example

Soros style attack on Beanstalk

  • a Soros style attack on Beanstalk is probably less profitable because there’s no token to short and no BTC reserve to be dumped
  • A lot to think about when it comes to liquid Stalk design

Pod Line length stability

  • There isn’t necessarily a need to keep the Pod Line length the same
  • There was a lot of discussion about lowering the length of the Pod Line
  • This will be something to explore post-relaunch

Could what happened to UST happen to BEAN?

  • Of course, Bean would depeg the same way, but the Beanstalk model is designed to return the price to the peg. If Bean dips a billion Beans below peg and there’s demand for a billion Soil, there’s no problem. And the amount of Soil may be even less due to Convert.

Could Beanstalk peg to something other than a dollar?

  • in theory Beanstalk can issue assets against a variety of different oracles. But there needs to be an oracle on Ethereum to use

Transcript

hello gang doing quite well a little bit of out of breath oh man did you jog here well i just had 30 minutes so i went for a jog the first 30 minutes we had uh since uh this morning back to back-to-back calls good for you the healthy decision well you know gotta gotta gotta gotta let out the energy somehow you know right no doubt yeah and boy are we full of energy these days excellent good to hear all right so it's 32 uh people are still filing in um but what i'll do i suppose um police you wanna you wanna just you wanna kick us off with any opening thoughts or anything anything recently on the bean front or heck anything else lots of stuff going on in in the crypto space right now anything you want to kick us off with before we get into the chat i mean there's so many different things going on uh [Music] we it feels like we start class with that so many times but uh for the first time in a long time most of it is not being stock related if you will uh so there's something uh there's certainly something nice about seeing everything blob and not not having to worry about any of your books blowing up yeah the ironic uh or maybe uh you know sad part about it is that you know there's no books to be managed which is obviously ugly but uh i don't know it's been very exciting to watch what in our view has been to date the largest competitors beanstalk tara uh go through the uh and it's very interesting from an economics perspective very interesting from a social perspective uh i mean it's just fascinating this is uh you know if we didn't have so much work to do uh i think i'd be on crypto twitter just 24 7 eating all this up but nonetheless trying to stay on top of it and learn as much as possible from this unique uh opportunity and data point uh if you will uh yeah it's crazy man crazy uh and it isn't just crypto markets blowing up uh it's also lots of other markets it's very interesting to watch happen in in uh back yeah some sort of synchrony yeah yeah crypto markets traditional markets everything is in flux and yeah i mean it's it's been a while to watch to watch this ust luna situation and um yeah a lot of mixed emotions obviously you know you feel bad for everybody that's that's going through a lot of a lot of pain right now yeah it has been really interesting to watch their team to watch dokwan react and and how their team is has kind of pushed back and yeah just the last last 36 hours have been pretty fascinating so you know i'm just as a yeah as a way to maybe get us started here with class where i'm sure people will ask for funding updates and stuff like that um like look at the behavior of dokwan on twitter and particularly even over the past 24 hours around now trying to get funding secured and stuff like that is that really how you guys want us to talk like come on like it's it i mean it's not a good look in our opinion so uh please bear with us as we try to do what we view as you know the right thing and remain very conservative and how we project how things are going but uh high level very enthused by what's going on on the fundraising side but but don't have too much of a substantive update in terms of additional capital commitments maybe up from 15 to 20 let's call it uh so some some marginal progress in terms of uh money uh in the bank if you will uh but but lots of other progress as well [Music] good stuff and uh and astute observation on douquan too uh i agree with you there so um hopping into the discussion uh the gilfoil kind of kicks us off with an interesting theoretical question so they write in theory should a stable coin always be redeemable for its peg and how much variance above or below pig if any is acceptable so this is a great ah what a great question the gulf oil i would make the argument or we would make the argument that it is crazy for a stablecoin protocol to make any sort of promise uh a hard promise on stability in the sense that if you have people that are willing to sell their their beans or their ust for less than a dollar so be it now you could make the argument from a utility perspective the fact that there are periods of time where [Music] you you can only sell your beans for less than a dollar or your ust for less than a dollar that hurts the utility of the protocol but i would argue that the main thing then to optimize for is minimizing the time at which the protocol is below the peg effectively uh variance is less of a a priority from my perspective uh when you do have depending events it's highly likely that you're going to have significant uh downward volatility particularly in models like uh the terra luna one where it's a closed economy to a large extent so particularly susceptible to uh if not manipulation certainly uh larger movements from a select few set of players that may be incentivized to temporarily facilitate the de-pegging and we're certainly seeing the misalignment between ust holders and luna holders play out in the market at the moment and that's all very interesting but uh definitely don't think inferior stablehood should always be redeemable for its peg i think in theory we think in theory a stablecoin should be redeemable or worth in the case of beanstalk it's not redeemable for anything uh but it's it's whatever it trades against uh you know there's no problem with variance above and below the peg in our opinion now there is a big problem if your users don't realize that right so that's one of the things that uh from an education perspective i think we've spent a lot of time talking about right natural oscillations above and below peg or how the protocol works uh how beanstalk works but in in the case of uh tara there seems to have been a significant amount of uh expectation that this was not possible uh for some reason so whether that was an education problem uh whether that was a lack of understanding of how the model works in practice where the throttle between uh the the bridge from terra back to luna that uh you know that bridge is limited or the ability to convert from terror to luna is is rate limited that that effectively implies that when you have large flows outside of out of ust uh if you reach the rate limit then it's likely going to result in a depending of ust so the protocol is designed that way don't think there's a problem with that and you know as we were tweeting about yesterday we're lo we're betting the the over over the long term recovery of the system independent of what happens over the short term [Music] good observation so what goes through my mind and feel free for you to correct me it almost seems like rather than rather than whether or not a stablecoin should always be redeemable for its peg it almost seems like the the performance should be more around speed of return to peg is that from a theoretical perspective i think that's a there's a good argument to be made around that yeah yep all right which again then then the question isn't just it's really how frequently does the price oscillate above and below the peg as opposed to the volatility above and below peg now you could make an argument both are very important i'd probably agree with that um but from a utility perspective uh crosses is what trump what what's much more important [Music] yeah it's very interesting even looking inside of our crew to watch um i i watch sync sync is sinks uh and actually a handful of our folks really um on about that that peg cross is such a key um such a key data point so um so looking down through the chat um so actually dumpling just shot me a dm doubly i'm good to go man you know you're you're good enjoy your your time your vacation i'm more than happy i had this marked in my calendar to host anyway so never a problem um american pharaoh asks in the chat yes or they ask when generalized minting well long story short it's likely that the protocol relaunches with a single liquidity pool for simplicity's sake uh but uh the protocol will in theory support generalization upon restart so uh most of that work was already done prior to the attack and is being audited [Music] excellent that's great all right so next in the chat now um so neurovirus writes can you go into depth on why the nft is better versus fungible i'm assuming they're saying a fungible token sure the main from a practical perspective the main advantage is liquidity so this fungible token it's unclear what liquidity would look like for that token and furthermore how to incentivize it and more specifically in terms of bean stock complexity if you have these yield bearing tokens that are now in an amm providing liquidity the distribution of the yield from those tokens is sophisticated and complicated whereas if you have an nft and you list it on openc there's no dev work required whatsoever to have liquidity for these these new tokens that are being added to the ecosystem so purely from a practical perspective this makes things dramatically simpler very fair i actually had a very similar conversation with a irl friend of mine we were talking about this exact thing that was that was my guess was that the nft was a more elegant solution so next in the chat austin called you out for jogging which you know you got to stay healthy there's there's nothing wrong with a little jog especially when things are busy and a little crazy um so we've already talked a little obviously talked a little bit about ust scooby 22 writes um can we hear publishers thoughts on ust and potential impact of the capital raise so that we've talked about that a little bit is there anything else you want to want to add in that light well on the one hand i mean everything cuts both ways right on the one hand it's and there's so many thoughts i have here uh first it sucks that beanstalk is not on right now because it would be the star of the ship and that is just you know there's there's cost to just not being up and it sucks um the fact that ust is imploding is not good for being stopped in the sense that some people may get further spooked from non-collateralized or algo stables but it's probably good for being stocked in the sense that beanstalk model beanstalks model is in our opinion dramatically better than the ust model and hopefully this brings more attention to that and the failures of the ust model are exactly what beanstalk is better at the positive carry of beans create a dramatically better product market fit than subsidized yield on anchor so in terms of direct capital available hard to imagine at the margin there's not some cost because people lost a lot of money but separately feel like there's a lot of people that are now looking for better better algo stables and we really feel like beanstalk is the best so we'll see how it cuts [Music] i think that's very fair and um speaking of crypto twitter i mean i've been watching a lot of the stuff that's come across and um seeing a handful of individuals um that aren't folks that i would consider you know your typical you know part of the beanstalk army or you know folks that we typically talk to or call on a lot um have had some really interesting uh comments and and feedback around ust that is related to bean uh detective grover had a had a really interesting twitter thread today that uh got some attention inside of inside of our twitter group and you know really alluded to exactly what you just said how you know there's a potential for a better algo stable to emerge out of this and and you know was was was giving a pretty strong nod to beanstalk and uh you know upon some some comments and replies was was pretty clear about their support and um you know seeing that around twitter even though we're not up you know seeing a lot of positive feedback and and some some anticipation of of beanstalk coming back online which has been really encouraging so next in the chat um so harry smith our favorite redhead asks uh just for an update on the otc rays well i think we gave a pretty substantive one at the top but will restate uh capital commitments are probably up from 15 to 20 percent in terms of money that's in uh interest is significantly higher than it was last last friday uh that hasn't necessarily translated to actual dollars per se uh but yeah tons of interest and it's it's exciting we'll see what happens [Music] good all right next in the chat we've got jams with three questions um i will we'll just start with number one and then we'll we'll work our way down rather than going through all three at once excuse me first question how's macro conditions and the recent ust peg impacted fundraising discussions are investors still on board are they beanish so the macro backdrop i think it's harder to paint that as neutral uh capital is becoming expensive and at least in the short term people are nervous so hard to imagine that's beneficial for beanstalk uh but beanstalk is a very contrarian bet and some people see that so uh know there's a great i think it's a buffet quote about when the tide goes out you find out who's swimming naked the people that are still you know they'll have their pants on uh those are the ones that are looking at beanstalk [Music] okay jim's second uh second question is still pl are there still plans to raise uh i'm still plans to snapshot the nft fundraise any additional thoughts on how it'll be structured uh there should be a snapshot uh honestly there has been a lot of discussion on the latest information on you know what makes sense for the nfts but i'm not totally up to speed on what was decided uh so i i just don't know uh i'm sure there is information uh if anyone who has that information wants to raise their hand and come up here feel free but i just uh i just don't know [Music] that's fair and if anybody wants to throw in i don't know if you know maxell or austin or manifold or anybody else feel free to raise your hand i'll pull you up on stage no problem um jam's third question uh do investors care about holding an nft versus i'm going to say a fungible token do they care and and obviously we talked a little bit about the functionality of the tokens but anything you want to add along those lines and then if whether investors would care one way or the other about the nft itself uh not really at a substantive level as far as we're aware fair all right so nasdaq looks like we got your question um with jim's stuff a little bit earlier see plenty of good chat okay so it looks like um looks like the next next question is really syncs um so sync asks thoughts on offering the options don't skip disco do this point cause it's like it's a good uh comment yeah no that's very fair and i a lot of times if something isn't in a formal question i'm like jeff i'm like alex trebek god rest him um so yeah so this photo if it's not in the if it's not worded as a question it goes over rex's head that's right he's just he's just a t-rex folks he's trying his best i can i can barely reach the keys you gotta you gotta make it easy for me so disco stu makes the uh the astute observation that's stable equals behavior not outcome so yes no redemption promises so the label might be misleading and actually when you were published when you were giving your initial part of that answer that's actually what i thought that went through my mind too was you know the the term stable coin is itself possibly a little misleading well what would be a better name like volatility minimization resistant and it's like what's what's uh what's a synonym for volatility minimization it's like stability maximization so at some point all roads lead back to uh albeit a slightly uh imperfect name likely uh whatever that's true so um thanks question thoughts on offering the optionality for an on-chain lfg council equivalent uh equivalent by establishing a hardcore beanstalk participant hardcore beats our participants to offer permanent deposits in the silo to uphold a baseline continuum of liquidity for bean so i don't really understand what this has to do with an lfg council um frankly i just not too familiar with that uh i don't like the sound of it yeah what do you think come on hey hey hey guys hey yeah um thanks for taking this question so yeah um you know i brought this kind of idea up before in the past so this isn't the first time you're hearing this publius and i don't mean to be redundant but just thinking in terms of recent events with ust um they have my understanding and i'm not too um well-versed in how their kind of off-chain uh stability mechanisms work but i do i do understand they have some sort of they call it an lfg foundation or council um that is kind of doing uh off-chain um stability uh attempts for for ust through their reserve and all that stuff obviously it's very decentralized incubate tell us more no so it's not right so but that's that's where beanstalk kind of released you know uh stands out right um everything is on chain you can see it and so you know i was thinking about this permanent deposit optionality it would allow you know any participant in being stock that's you know very committed to the protocol and would like to see it thrive to kind of step in in situations where there is either situations where there is volatility or even in normal market conditions to step in and say look you know i'm going to offer this deposit to the silo as a permanent deposit i don't want it to be withdrawable it would not be protocol owned liquidity because bean stock doesn't not believe in that i would call it uh protocol contained liquidity um such that that liquidity would remain in that respective liquidity pool the depositor would receive maybe an nft as a receipt of that deposit which would represent their stock and seed allocation and they would be able to claim farmable beans accordingly and to me that i think the reason i'm also kind of thinking about this too is there's been speculation that citadel ken griffiths uh you're you're from chicago you guys are from chicago or university of chicago so he's his i know the ken c griffin economics department we were all so pissed when he paid like 300 million dollars to rename it that like there you go that guy has no ego whatsoever clearly yeah well there's speculation and i you know i don't know if this is you know definitive or not but there's been a lot of speculation on crypto twitter over the past few days that citadel has been involved in potentially um some of the sophisticated um you know behind the scenes uh you know stuff with ust and in terms of trying to de-peg it or being involved and trying and shorting it that's the rumors it's not definitive but that's what i'm that's what's being said by some prominent crypto um people on twitter so i'm just thinking now like the ecosystem is becoming it's inviting more sophisticated players into it so how can beanstalk kind of become more robust from an adversarial perspective so i just wanted to kind of get your thoughts on yes this is a great this is a great line of thought uh stinky bit and we'll separate it from the nft idea because i think we've talked about that extensively in the past but the uh i think we would make the argument that the centralized control over the terra ecosystem was one of the main things that got them into this current situation because you have people that felt responsible for the economic success of the protocol to the point where they were willing to compromise the integrity of the model like creating a btc reserve uh in order to hedge hedge their bets effectively and you could make the argument they were doing their best efforts to keep the protocol live but at this point in time it's very clear that that decision to move to btc collateral is what exacerbated this attack right because uh what it seems like happen is the people that launched this attack helped fund the attack by shorting bitcoin and that short was uh the fact that lfg now had all these btc reserves that uh it was very clear uh what needed to be done in order to create the situation where lfg would have to market dump their btc that was ultimately what created a profitable circumstance for for this type of attack and so it was in practice the the very people that were trying to help the system by getting involved and and changing it and you know again it's all we assume it's in the with the best intentions they ultimately up and uh that hurt the protocol and so we would be i would say vehemently against might be an understatement any sort of council or body that is now going to be making monetary policy or doing open market operations like vom vomit would be the reaction to something like that the whole goal of the design of beanstalk is for independent market participants to be doing what they view to be in their own best financial interest and beanstalk creates incentives to return the price to a dollar again it's almost impossible i would argue it's probably impossible to prevent the price from trading below a dollar in all cases it's just impossible particularly when you consider people may want to sell their beans below a dollar for whatever reason uh it's just the nature of the beast all you can do is give them a strong reason to believe if they wait they will be able to sell their beans or their ust or whatever their stable coin is for a dollar at some point in the future and therefore they should hold that's it and any any any centralization built on top of that to protect the system isn't practice gonna do the exact opposite so uh hate and i don't use that word almost ever uh i hate the concept of some sort of counsel yeah no i'm 100 with you i'm i'm totally with you on that you gave us a meatball there sink yeah i know um i'm trying to make it relatable to some of the people that might be following this ust stuff so um in a sense like i that's one of the things i i enjoyed about beanstalk is you know um incentive marketing past tense i'm gonna continue to enjoy it but um i'm thinking from like more adversarial perspectives now it seems like and i'm not saying like in a centralized body what i'm saying is additional optionality vis-a-vis maybe a silo like a separate silo one day that would be just for permanent deposits and that people can if they so choose uh participate in that silo maybe for some extra seeds in exchange for doing so and again i wouldn't expect most people to do it right i think most participants would want to have withdrawable deposits but i still think you know you might you might have somebody that does really well in beanstalk does really vary tremendously well and decides you know what i consider this my kind of contribution to the protocol indefinitely whether it ensures that the protocol survives to live another day to live another decade i don't know but this is my contribution the protocol did well for me this is my you know what i'm saying so um and it would be an interesting metric i think like this is committed kind of liquidity regardless of what happens you know again this goes back to who controls that liquidity after it's it's permanently deposited is it the depositor like what do they care about it at that point it's not theirs they don't have any access to it so what do they care about doing it so in short uh i don't know we've gone back and forth about this permanent nft idea endlessly uh still think it's probably not economically the best idea but uh you know that i'm sure we'll continue to have that discussion in the future sounds good thanks yes saying thank you as always hey oh man oh hey american pharaoh glad we even though it was a joke glad we gave a decent answer a bunch of autists that went right over our heads again you know not only not only not only do the questions have to be in the form of a question they also have to specifically signify that they're not sarcasm because i can't get it detected oh looks like uh looks like dumpling may have uh yeah maybe maybe best uh taken taken to the benches this time around i don't i don't think you're supposed to you know if you've got a worm in your tequila you're supposed to or in your mescal you're supposed to eat it i don't think you're supposed to eat a scorpion out of a bottle of tequila all right so i didn't eat the scorpion but had the drink with the scorpion was it like a literal dead scorpio there was a scorpion in the bottle yeah yeah that's serious quite the ride yeah so thank you thank you for hosting right my pleasure all right so american pharaoh has the next question and it is a i think it's a it's a good one obviously with everything we've been talking about um probably a lot of folks are familiar in this room but for what it's worth publish you want to talk through the the mechanic differences between bean and luna and i can give some references for other materials when you're done [Music] so luna or terra we should say is what we would classify as a mint and burn stable coin uh or a protocol native collateral stable coin where terra has a really innovative solution to the collateral problem whereby there is a the collateral problem is that there's not enough collateral exogenous to protocols to create enough stable coins to meet demand that creates opportunity costs which creates negative care and costs and that's that's the main problem with stable queens today tara used this protocol native collateral luna to to backstop the the value of tara ust there's other terror stable points picked other currencies but ust is the biggest one by far now it's important to note that uh the main mint and burn concept comes from the fact that you can uh when the price of terra let's just use ust uh ust is too high uh you can burn uh luna in exchange for more tara and sell them above pay and vice versa when the price is too low you can burn tara into a dollar's worth of luna and uh you know recoup the difference and so in practice the thing underlying the value of tara the stablecoin is actually the demand for luna and demand for luna can come from a couple different places so luna is the staking asset for the terra block chain which is a proof of stake blockchain and uh holding luna entitles you to a portion of network fees and fees from usage of tara but in general there's not you know currently a lot of the demand for luna is speculative and that appears to be what is driving uh some of the downturn at the moment it was speculative as to the future demand for ust because if we go back to that core economic model excess demand for ust effectively goes to luna holders under this economic concept that uh a lot of the demand for luna was based on the demand for terra or ust and now that there's no demand for ust there's also no demand for luna and or less demand for lunar we should say uh and that's creating this negative feedback loop beanstalk has a fundamentally different mechanic mechanism behind it from a couple different perspectives so first there's no collateral whatsoever in being stuck uh protocol native or otherwise instead beanstalk uses credit its ability to borrow beans and remove them from the supply from the market uh to create stability in the bean price and in short the there's a couple economic key differences uh most notably whereas ust doesn't have any sort of yield associated with it it's neutral carry at best there's protocol fees associated with spending it in the case of beans beanstalk will pay you just for holding the stable point and so beans are positive carry now in addition to the credit mechanism as opposed to the collateral mechanism and the positive carry the there's one other or two two depending on how you think about it uh main differences the first is that speculators uh are are separated in the beanstalk ecosystem uh from the users but that doesn't necessarily preclude the users from benefiting from the growth of the system so whereas the speculators in the terra ecosystem all hold luna and the users told tara in the case of beanstalk you have speculators lending beans to being stuck in the field uh and then you have uh i guess you could make the argument they're speculators but they're also users or holders of the currency of beings holding them in the silo also collecting yield and so that's where the the protocol native yield actually comes from and that's that's probably the most substantive difference now economically it is really noteworthy that the only way to acquire stock and entitle you to that portion of being senior edge is to own beans to own the stable coin itself effectively or lp tokens that they trade in whereas the only way to participate in the senior ridge of the terra ecosystem is to buy luna and there's no need to buy terra to buy loot to access luna if that makes sense whereas in order to access bean senior edge whether you're lending to the protocol or depositing your beans in the dow you need to buy the beans so the maybe at a macro level the economic difference is uh beans are the entryway into the beanstalk ecosystem whereas luna is the entryway into the terra ecosystem to some extent not sure how accurate that actually is as a characterization because you can buy terra as well your ust but hopefully that's clear that's good and um i would just as an additional resource if anybody's looking for some stuff to read uh john woo i don't know if anybody follows john who on twitter definitely a good follow and wrote a really good thread around what's happened over the last 24 hours or so 36 hours and kind of worked in all those functional components as well so if you're looking to get more familiar with public switch you just walk through some of the functionality will cover that in his twitter thread as well so highly recommend that i will drop that into the chat here later on okay so next next question is in the chat nope we got in the queue about um we'll bring terribly up and have them talk through their question and then we'll get back into the chat all right terry boy you're being invited up now go ahead hey publius uh i had a quick question i wanted to get your thoughts on uh janet yellen's comments about you know adding stability and regulation to you know what's happening with ust and kind of you know what that would look like for the market and you know specifically for being i haven't had a chance to listen to them uh the comments uh you know i hate to i hate to share my frank comments because it tends to you know our honest comments will probably put a target on our back but you know it's one of those like it's just talk you know it's just talk so what the are they actually going to do they want to put stability into the market the fed should bail out ust like how much does that cost to fed compared to their quantitative easing so it's just [Music] and it's just a bunch of boomers trying to protect their old financial systems so you know good luck [Music] fair enough thank you thanks rex anytime and uh yeah it's interesting as you know obviously ellen's comments um earlier today made a lot of they made a lot of headlines but um actually watching the clip of her talking through the ust situation was a very short clip i think it was less than 30 seconds um what which he actually talked through and and i would say it was not substantive at all it was essentially you know just basically what terribly said call out for some type of some type of structure but no recommendation about anything anything specific the the headline was definitely more a lot more alarmist than the actual comments that she made all right um so uh next question in the chat is neurovirus and i will i'll read down to the question and give you a second to to respond and and then looks like the rest is is a thought tagged out of the back so neurovirus writes so it seems public says nft is better than a for example erc20 yield bearing token because a market for the trading or for trading those is available basically in a peer-to-peer over-the-counter deal on open c isn't this the same as just not worrying about secondary liquidity for a fungible token [Music] it's not about not worrying about it it's about what happens to the to the beans that are rewarded to the fungible token while they're in a in an amm and then it's like these beans are just going to be owned by the amm contract uh so there probably have to be some sort of custom support to facilitate the claiming of those beans and it's it's it's a development uh it's development overhead uh and at the moment that's just not uh you know probably not a good use of resources frankly all right nerve just essentially finishes up by saying again i feel requiring fixed increments in a min uh in a minimum will deter a portion of possible investors from the retail side yes they're a small minority but i believe the raise being open for everyone and up yeah admittedly personally i tend to agree and go ahead open for everyone it's i mean it's so hard to make any argument against that um you know the minimum yeah it sucks it's like you know in theory you'd like everyone to be able to participate for a cent uh yeah i don't i mean i'm not i have no argument against that whatsoever it's just a practical issue [Music] very fair okay next in the chat so i'm taking guilfoyle's comment to be tongue-in-cheek so next question chat is from harry smith who asks how are the first couple days of the audit going pretty good we have a call with uh hal born tomorrow to get some sort of update i think but actually maybe that's not maybe it's uh unrelated to the audit but we have a call with how born tomorrow i don't know you know no news is good news they said they'd reach out to us if they needed anything so we have a slack channel going there was some chatter past couple days i'm scrolling through it now it's you know hunky dory good to hear [Music] all right next in the chat kobe bean do we have to wait for the nftr to be created couldn't we just release a placeholder nft with an r reveal at a later date yes uh the art is not going to be the hold up here whatsoever great to hear that is a question that had run through my mind over the last few days too so grip kobe thanks for asking and publish thanks for the answer um justin being asked kind of a related question asking for like essentially a point of contact or sort of source of truth for updates ideas and progress on the nft driven barn rays honestly don't don't know and don't want to call anyone out uh i just have no idea what's going on there i think that's something that i think that's something that the the core team can take back and say okay you know who would be that central point of contact that's if we don't have a uh an answer right now just to mean we can we can figure out that primary point of communication so austin um austin who who may have just you know in the chat below that made themselves something like essential point of contact which i would be completely fine with says um thinks that it would be reasonable to expect an announcement an associated snapshot about it by the end of tomorrow so austin's got some information there that will be coming out relatively soon so high five to austin [Music] oh and mentions it's largely similar to the existing plan um just swapped for nfts with a couple other details so more stuff to come sounds like by the end of tomorrow so thank you austin for the information actually austin i'll give you one second is there anything you want to hop up and talk through give you the stage for a minute if you feel so led don't feel obligated though uh no not really honestly i feel like yeah we'll just uh let the snapshot speak for itself awesome thank you very much the guilfoyle has high suspicions of newman all right good chatter from just a bean dumplings throwing shade the bernoulli bean is he apparently you chicago another another you chicago farmer familiar with the econ building at you which econ building bro news to me although i haven't been there for a while so what do i know it's also not like i went to many or any economics classes so um well and bernoulli wrote it at the bottom but i cannot pronounce that oh yeah saya uh but uh was that griffin i didn't know that it was griffin oh my god see this is literally proof i hardly went to college uh yeah literally proof like i i'm not i'm not i have no degree brendan and mikey have the degrees here so use chicago questions uh directed to them that's pretty funny uh i love it now they use chicago heads in the chat are making themselves uh all right looking down through the chat dumplings throwing throwing more shade of ken griffin man all right yep and then bernoulli's throw okay griffin all right okay so disco stew asks is there any serious consideration of trying to purposefully attract past and current luna or and ust holders seems pain and fear can be easily addressed by a better stability better stability protocol like beanstalk 100 and that's one of the reasons it's painful not to be up right now very fair austin being helpful as usual jams is offering dumpling i can assume doubling some terra mata uh let's see okay so next question is from mumu let's see i want to make so they reference a twitter post from modern farmer who admittedly i'm not familiar with them under the impression they are not a beanstalk farmer though i could be incorrect um but underneath that referenced tweet they write is this an oracle issue giving a higher price for luna or is it a liquidity issue on terrace tear station so there was some chatter about it below but it has to do with there's a a throttle limit on the redemptions back and forth between ust and luna i think on a daily basis and so that's what creates the [Music] the limit effectively gotcha and then once if you're holding ust and you can't redeem it for a dollars worth of luna and it starts to depend you may say well i'll take 80 cents instead of waiting and hopefully getting a dollar's worth of luna at some point and that's where you start to see a bankrupt gotcha okay and yet now i'm seeing that discussion play out oh sank drops in um mark jeffrey our cool rich uncle i've heard referred to at least as such um looks like he gave some love showed us some love oh this this was from a while ago though but still maybe we should try to get more to like retweet that wonton asks if i just did rex just say ja rule i didn't but i can ask in fad joe fashion what's love got to do with it um terror squad you know old school anyway um so let's see more discussion about machine is just dropping fuego in this chat is there a good reason for the limit what a great question yeah we would make the argument that this is a limit that exists to protect luna holders over ust holders and it goes back to by a protocol design perspective uh the this deep egging is designed so it's not a problem per se and it's it the concept is either you're going to take a dollars worth of cell pressure in luna or you can have ustd pay and take 60 cents worth of cell pressure uh in in a in a in a bank run scenario it may be better better if people are willing to sell for 60 cents to just do that and that's a fact right so you could make the argument the limit exacerbated the bank run and there is something to be said for that but you know that's where we haven't studied their model in depth to have a real opinion on on one way or another [Music] good stuff gilfoyle also gave some feedback as well and go ahead please no it's just gonna say i'm reading new moon machines comment that a soros style attack on bean isn't profitable because there's only one token no luna to short and also no btc reserves to be dumped you know i don't necessarily i mean it's really hard to understate how the btc reserves and the ability to exacerbate this play by shorting btc uh made this a profitable trade but also being able to short luna was clearly part of it and so i think about stock design as it becomes liquid it plays in yeah very just the past couple days have been so much uh so much great data to just study very fun [Music] all right down through the chat lots of love love for your uh not only for you publish but for the mic click i admittedly i listen for the mic click now because i can tell that's my that's my cue for when i can keep keep going through um alex he said it might click is the new mic drop um all right over beanson has uh words of warning yeah it would which i i think are i think there's some wisdom in it um just current concern about the general um you know the bad publicity yeah i mean and they make a good comment a stable coin and a dollar are very different things we need to emphasize those differences definitely like you have something that's x and then you have something that's designed to maintain a value of x like it's definitely not x and there's no if answer buts about it so i think that's that's essential really good chatter below that alex has really good uh comment back and yep over talks to basically what you just talked through publius um okay so guilfoyle uh next in the chat references a proposal from disco stu um so i'll read through it real quick uh and then then hand it over to the epublius so from discus to perhaps unpause by attracting scared luna ust holders offer twenty dollars worth of bean for each luna and the promise of safe stable a state safe stable haven free from free from stress and egomaniacs with the uh [Music] okay with i'm gonna i'm gonna say with the bs still over there there must be a couple of let's say whales who would take that offer then um then we oh then we barn raise the rest start up faster and avoid the over the over resilience on concentrated wealth seems to be in the current plan so essentially disco is asking if it makes sense to make a special offer to lunan ust holders i mean frankly would make the argument that economically accepting a luna versus another asset same offer is there for the people that currently hold luna to sell their luna and participate in this thing so there's just uh i don't know i don't think it's it's a substantive idea very fair so dr beans asks what is the minimum and dr beans i i'm not sure what that is referring to [Music] the nft is presumably uh don't know don't know whoever's like whenever there's an nft update presumably that will be included as the cost of an nft [Music] oh and now looking at guilfoyle's reply to wanton it's about okay the the yeah the so the um the [Music] um the thread that i was referring to um so it's so hi um twitter handle is john wu j-o-n-w-u underscore uh john moo.eth is i mean a he's a relatively well-known web free writer and uh yeah just did a really good thread um i will i will put that in the chat when i get a second um in the classroom discussion chat so that people can read that as they get a chance to all right uh so alex writes is there a date for the nft sale and i don't know if we've talked about this and i don't know if it's something that austin wants to comment on i don't think we've talked about an actual date thus far tonight here's jay dubs hey you guys yeah just echo kind of what uh what austin said meanwhile said i think there'll be a lot of details that are going to come out probably been 24 to 48 hours in terms of uh timeline and uh what we're thinking at the pricing stuff like that just just so everyone knows on the call that we've had a great community effort uh in terms of like being stuck farms completed overall and we're all trying to push together as much as we can as fast as we can um but definitely stay tuned because a lot of the questions at the end of t step will be addressed when the deer come into their turn perfect thanks j dubs all right so next in the chat or being some continuing the conversation um so basically what so what um what armor talks through is so i'll just i'll grab a kind of the middle sense of of their comment what i'm drawing awareness to is the fact that the demand for usd paid stable coins in integration of stable coins into d5 is driven by demand for the us dollar as a reserve currency the world yeah i i mean can we just we have limited time we're already over can we just read the questions that are left yep it looks like we are coming in yep yeah i apologize for running long came um scooby 22 asks uh before beam was hacked there was a lot of discussion on the benefit of keeping the level of the pod line stable at 682 million which was an important mechanism in order to measure demand for debt i wonder what conclusions were drawn from that if any i asked specifically because at the new launch we will have a much higher level of debt and i wonder how much demand there will be for new debt at a higher level of debt in the ecosystem i think this is important because if someone tried to attack the the system being may be subject to prolonged periods of off the peg due to potential lower level of demand for debt any thoughts here so the wanna want to correct something there in the statement even though it's a great point which is not that uh there's a need to keep the pod line at 682 but that under the soil parameters from bip9 there was no need to increase the amount of pods outstanding now there was a discussion of lowering the amount of pods outstanding and would make the argument that we're going to get good data upon relaunch because since one-third of newbie mints will go to paying off debt but not pods the amount of outstanding debt will actually start to decrease and we'll get to see how the system works in that scenario so to some extent there will just be some very interesting data to learn from upon relaunch but the the concept of this this being a long a large vulnerability to be in stock let's say the full 77 million is raised it's at 500 percent weather it's the equivalent of 462 million pods being issued which would take the total pods to like 1.1 billion or so uh at 108 million bean supply so a debt level of like a thousand percent uh while that's much higher than the 600 percent debt level of the system prior to the attack uh when was the system last at a thousand percent debt level like four days prior to the attack or something so marginally it's not so bad uh would agree a lower debt level is better but generally very uh you know very enthusiastic about the the the state of the system from an economics perspective upon relaunch but agree you know a higher debt level it's obviously worse very fair um and actually that looks like it is unless i'm missing something in the chat all right mark jeffrey tweeted uh and then someone asked for comments on it uh in in being could this ust thing happen the answer is yes uh and mark suggests that if someone accumulated a significant amount of beans and then dumped them on curve all at once creating the liquidity bean would d-peg the same way totally agree with that however the beanstalk model is designed to return the bean price to the peg he makes a comment in the follow-up tweet that increasing the weather would not likely create enough demand for soil to return the price to the peg but that presumes that there wasn't demand for soil up in excess of the amount of the dpeg if that makes sense so you can bring beans a million below peg or a billion below peg but if there's demand for a billion soil then it's not a problem furthermore you need to subtract the difference even if it's a billion below peg the amount of converts that will minimize the amount of beams that actually need to get lent to beanstalk so between the convert functionality and i think a little bit of a misunderstanding of the assumptions of the state or maybe not a misunderstanding but an unfair assumption of the state of the system prior to this theoretical curve attack you know i think it's certainly possible uh particularly if the weather was uh at a rate where it wasn't attracting significant amounts of excess demand for soil so that's it's very possible but generally between convert and and the soil mechanism you'd expect we would expect beanstalk to respond to it not immediately per se right slow and steady is the name of the game here so this goes back to beanstalk doesn't make any sort of hard promises on peg maintenance but would expect beanstalk to be able to respond to this type of thing at some point [Music] all right pulling through a lot more good chatter in the in the class discussion but i don't see any other questions unless there's something i am missing from egg salad with all the talk of danger from fed with usd stables i assume we could easily peg to something else could that be done in parallel or would a switch over be fairly easily possible where would you go euro i mean i would laugh at the euro suggestion uh the the euro is just so funny uh the the market has a demand for dollars right now beanstalk can issue in theory and there is some complexity around figuring out the finer points here but in theory it can issue assets pegged to a variety of different things the main problem that needs to get solved is the oracle problem whereby there needs to be some other asset on the the ethereum blockchain pegged to the value of the off chain asset beanstalk is trying to peg the stable coin to so there is there's some some under the current oracle solution some outside uh requirement uh so there's some limitation but you know could do some sort of inflation adjusted basket could do currency basket could do a bunch of things whatever the market would demand [Music] okay um looks like besides alex messing with me in the chat it looks like we are down to the bottom uh and yes it does screw me up so i guess i'll hand over to you publish is there anything that you want to close out with fun class today huh indeed good stuff so um yeah all right well uh we'll talk again soon again all right thanks everybody i always appreciate you coming along for the ride have a good evening you