• Recording
• Notes and Questions
• Will users be able to swap Farmable Beans or Harvestable Beans for Fertilizer?
• Why should Stalk become liquid?
• What might future on-chain governance look like?
• What happens if Barn Raise doesn’t fill 100% before Replant?
• Will the Pod Marketplace be live before Replant?
• What pools will Beanstalk Replant with?
• Ripening vs. Withdrawing?
• What are the current inefficiencies in Beanstalk at the moment?
• How did you get to 15% Pod Rate being equilibrium?
• Are Unripe assets transferrable?
• How does inflation affect Beanstalk?
• When should Beanstalk issue other assets?
• What did Beanstalk look like pre September pump and dump?
• Why launch with Uniswap vs Sushi
• Silver linings from the exploit?
• Does Beanstalk want to sell all 77M Fertilizer before Replant?
• Vitalik’s wind down scenario wrt Beanstalk
• Transcript

Recording

Notes and Questions

Will users be able to swap Farmable Beans or Harvestable Beans for Fertilizer?

• The Farm functionality will be available upon Replant
• Farmable Beans are in the Silo, you would have to Withdraw them
• with Harvestable Beans, you could in a single txn turn them into USDC and buy Fertilizer with that USDC

Why should Stalk become liquid?

• Not sure if there’s a right answer, but some of the benefits:
• you have a theoretical limit in the amount of liquidity trading against Beans ($1 of non-Bean assets trading against $1 Bean), but you could have >100% if Stalk was liquid and trading against an exogenous asset like ETH
• Lots of considerations wrt to governance

What might future on-chain governance look like?

• Have to consider—should be able to change quickly, vs. things that should only be changed over a period of time?
• Community will have to discuss a lot of this

What happens if Barn Raise doesn’t fill 100% before Replant?

• See: https://bean.money/blog/a-farmers-guide-to-the-barn-raise

Will the Pod Marketplace be live before Replant?

• Definitely

What pools will Beanstalk Replant with?

• Code that was submitted for audit includes a Curve metapool
• Goal would be to shortly thereafter launch a BEAN:ETH pool

Ripening vs. Withdrawing?

• Withdrawing is removing assets from the Silo
• Ripening is converting your Unripe assets to the underlying assets

What are the current inefficiencies in Beanstalk at the moment?

• When you Convert Deposited LP to Deposited Bean, if you had impermanent loss, it can make it unattractive to Convert based on the loss of Stalk—this can be fixed

How did you get to 15% Pod Rate being equilibrium?

• It was based on an analysis that Hamilton did of various countries while researching sustainable debt levels

Are Unripe assets transferrable?

• Yes

How does inflation affect Beanstalk?

• the fact that the value of dollars is decreasing is the definition of a tailwind for the system because the liabilities are decreasing in real terms
• that might be reflected in the price of Ether, or another asset that trades against Beans

When should Beanstalk issue other assets?

• Other assets should probably be issued by the same version of Beanstalk to preserve the network effect of its credit history

What did Beanstalk look like pre September pump and dump?

• The sunrise call started getting called by MEV bots right away
• We had to pay out of pocket to call the sunrise function because the MEV bots would immediately dump the Beans
• Immediately tried to tell people about Beanstalk
• Once the Telegram took off it was out of our hands
• for the first 10 days one of us had to be up at all hours of the night to call sunrise

Why launch with Uniswap vs Sushi

• Deeper liquidity on Uniswap

Silver linings from the exploit?

• the fact that this problem existed, it’s good that it happened sooner rather than later
• high focus on security and governance moving forward

Does Beanstalk want to sell all 77M Fertilizer before Replant?

• no right answer, but it doesn’t have a problem with the amount of Fertilizer sold, it can relaunch with any amount

Vitalik’s wind down scenario wrt Beanstalk

• the question posed by Vitalik seems to be one of a permanent wind down
• A wind down where everyone gets $1 of value out of each of their Beans is impossible without collateral

Transcript

has definitely been an eventful couple of days there was a the start of the barn raise uh no hiccups uh and in general the launch of anything with no hiccups as a success uh separately it was very exciting to see that whole thing uh go live and receive a flurry of purchases in the very first few minutes and the first hour and it was just i mean it was quite exhilarating uh at least on my end it was and i think uh based on all the chatter and the in the discord it seemed like other people felt a similar amount of excitement so that was awesome and you know one thing i do want to comment on is there was a lot of questions about uh the the money that had been hard committed and when that was going to come in how much of it had come in whether it's come in or not and on that front i think this is uh push has come to shove on this uncomfortable position that we've been in as sort of like a mediator between invested or interested capital uh and the community which is in general a role that we definitely don't want to have uh at all uh and so while we've we've been the main communicator with capital and with the community through these calls and down meetings there has been some definitely some tension around the expectation that uh you know we know exactly what's happening with all of the capital in real time and that we're able to communicate it to the community in real time and both of which are are not realistic and to that end i think in general this is a lesson for us that that's not a position that really exists the questions are legitimate and it's just one the type of thing that we're not in the position to answer them and so to you know the only thing that we've really been able to to know is how much capital is committed uh not when it's going to come in per se or how much of it has come in and therefore it's difficult to to serve this weird communicator role with capital in the community and so want to start this off by saying there's no additional information that we have to share at this point other than that the ten percent hard commitment remains committed still unclear on how much of that ten percent has been deployed uh thus far and other than that we don't really have any anything to say on the capitol front and going forward don't intend to have anything to say uh don't expect to have anything to say on the capitol front so the hope is that the on-chain process will speak for itself we will ensure that the 10 that we uh knew was coming in does come in uh and other than that going forward we hope to never have to talk about uh capital commitments with the community again that's just a horribly painful process so uh to some extent recognize it was just the position we were thrown into uh it's only we will try very hard to avoid going forward but uh it is what it is so that's that's the starting point uh i think now that the obviously this is class so any questions people have are welcome uh but think that the now that the the barn raises live and we're kind of looking towards the future it'd be much more interesting to talk about uh what means what the future looks like as opposed to any we'll talk about whatever but we've already started to really shift our attention and focus towards the future now that the bond race is live and it's it's on to the next one here so there's a lot of stuff to get done a lot of conversations and debate to be had about uh implementation details and uh endless minor changes and potential improvements and uh the article that we put out earlier this week or maybe over the weekend speaks to that and we're very excited so eager to get moving with all of you and excited that the bottom race is a major step in that direction so normally don't like to start class with a long monologue but this has been such a substantive couple days wanted to address a couple things and otherwise happy to address any and all questions uh on people's minds yeah i'm very excited for the future too all very reasonable comments and questions and discord yesterday it's kind of an awkward position you're in but i for one i'm glad uh publius is not tweeting deploying more capital study lats so with that we can get into some questions uh for mr manifold he says will users be able to swap farmable beans and or harvestable beans for fertilizer via silo swap so i don't know what you mean by silo swap per se but the concept is that the form functionality should be uh included in beanstalk upon restart it was included in the code that was audited or sent sent for audit and therefore people would be able to harvest uh their beans and uh so so there's really two questions farmable beans or harvestable beans so farmable farmable beans are in the silo those you would not be able to swap for fertilizer because you need to withdraw them from the silo whereas harvestable beans you could in a single transaction using the farm functionality sell the hard vegetable beans into uh into usdc effectively and then to add usdc for fertilizer so that you could do make sense i saw a question um from a farmer named walkabout a few days ago on the discord um they're asking i don't get why stocks should become tradable and not stay a sold-bound token as it is could someone explain why it should be otherwise can you talk about some of the benefits of uh making stock liquid sure so frankly don't necessarily know if there's a right answer on this one at the moment now to think through some of the the benefits perhaps the most obvious benefit is that you have this theoretical limit in the amount of liquidity that can trade against beans uh in the sense that you can't have more than a dollar a value trading against a bean or it's worth more than a dollar and maybe you could define some like some even more efficient like stable swap curve that gets around that but currently that doesn't really exist so the concept is in order to have more value trading against beans to make them even more liquid to trading against beanstalk such that you can when when there's a sell-off when there's a flight to liquidity people can can exit the question is how much liquidity is there and in practice having stock liquid and trading against an exogenous asset like ethereum makes it such that it's possible that the liquidity to bean supply ratio exceeds 100 so that's the benefit the most obvious benefit from having liquid stock now there's a lot frankly given the exploit the there needs to be a lot more focus on the long-term sustainable governance model and what that looks like and vitalik's points about soulbound tokens are interesting and definitely warrant some comments so uh i think this will be in a discussion that is getting started really right now now that the barn raise is live and the focus can now shift towards the future what what that governance actually looks like you know it hasn't been your focus up to this point but do you have any additional thoughts on on what on-chain governance in beanstalk could like and if you look like in the future so there's a lot of different parts of governance right and the the main question is what needs to be included in on-chain governance what can be done through off-chain governance and in particular what are the what is the time over which certain things should be implemented so if you're going to change the protocol should it be a change what should be changeable instantly what should be changeable over a period of time for example if you have an oracle if beanstalk is determining the price of a bean based on the usdc eth pool on unit swap v2 for example if that pool got compromised or for some reason was up such that it was no longer a good source of the price of ethereum in dollars there needs to be some way to act and respond to that quickly on the other hand though major changes to the protocol probably don't need to be uh executed and implemented in a fashion where as soon as the vote passes the code can be changed and implemented such that the there's perhaps an opportunity for people to leave the system before the changes are made for example there's a lot of different there's a lot of different things that can be done from an optimization perspective to make governance both very flexible and accommodating to things that need to be monitorable and changeable on short notice that are perhaps non-substantive in the grand scheme of things but very substantive at the micro level if they're compromised whereas on the other hand uh longer term changes for things that are uh grand scheme changes or model based changes if that makes sense so lots of different things from an implementation perspective to get right there and then separately on the beanstalk specific side as opposed to just pure theory on governance because of the fact that the only way to acquire stock is to deposit value in the silo how does that factor into things and the question then becomes what assets can you deposit in the silo and how much stock and how how how many seeds do you get for a being denominated value deposit in a given token right so there's there's a lot of different things to optimize around for at the moment and this is probably going to be a longer a longer multi-week or month discussion before there's any sort of clear answers to what the structure for governance should look like but just just really starting to to read through the latest uh [Music] metallic content if you will uh and other commentary on governance uh that uh [Music] is providing some inspiration for for perhaps what we should do with beanstalk but obviously this is a i mean the community's gonna have to do a lot of discussion about what makes sense given the goal it's a beanstalk to be very flexible and at the same time be permanent totally yeah a lot of a lot of surface area to be talked about in the coming months so i'll get to edgar allen pizza's question in the chat uh would encourage you know other folks to drop questions in the town hall chat in the meantime so edgar allen pizza asks i just want to make sure i understand how things move forward if the barn race is not filled all 77 million is not filled before the relaunch it beans in a pod lane vest do they best at partial value what happens is more capital comes in i think there's a little bit of good confusion about how uh how the bond raise works but uh do you wanna you wanna tackle that one for this sure so we would encourage you to reference all of the long-form written material that details all of this explicitly uh but the answer your some of your questions as best as we can uh the the concept is that beanstalk doesn't need the full 77 million to relaunch uh it could in theory restart right now with the seven million dollars or so that's already in and how that would work is whenever beanstalk is unpaused or restarted whatever you want to call it the at that point in time the usdc that has been raised in the barn rays will be matched with newly minted beans and those newly minted beans will be uh also paired with they'll either be liquidity or they'll just be deposited beans or circulating beans and the concept is all of those assets will be distributed pro rata based on stock ownership prior to the attack as unripe lp or unripe beans and the those those unripe assets will start at zero percent vested because it's the multiple of the percentage of the fertilizer that has been sold and the percentage of the fertilizer tokens that have been paid back and in short the concept is over time the the unripe assets will grow further as the bond raises further capitalized so let's say the barn rate stops at 10 percent uh and there's 90 to go that means that the unripe assets will only have 10 percent of the bdv that they had at the time of the attack and as the as the barn waste continues to fill that percentage will scale in line with the percent that the barn rays fills and then there's an additional haircut in terms of forfeiture when you when you claim those ripe assets or unripe assets excuse me based on the amount of the fertilizer that's been paid back and those assets in theory the supply is zero when it starts now there will be stock and seeds on top of the the assets that will also scale based on the investing percent so if you start at 20 if the barn is filled at twenty percent everyone will start with twenty percent of their stock prior to the attack and put twenty percent of their seeds and then that will uh increase as the bond raise continues to fill and the concept is that people will be able to claim and update their stock and seeds to increase their minting and on the pod side to answer you explicitly there the pods will not invest in the same way that the unripe assets will vest they will all the pod line will still be honored in full now as more capital comes in the vesting the the amount of fertilizer that sold will increase therefore the amount of assets under the unripe lp or unripe beans will increase and the amount of assets that people can claim if they vest will also increase so hopefully that explains things somewhat obviously it's a pretty complex situation so again that's why we reference you to all of the written materials that should lay all of this out but uh hopefully that's somewhat instructive thank you yeah i linked to some resources in the channel where folks can read the comprehensive guide so uh scooby had a question he said he saw the marketplace pod marketplace i assume wasn't in the new ui safe to assume that's coming at some point my understanding is uh it's in the middle of being designed by sweet red beans but not sure if you had anything to add there for this i'm sure it'll be there just uh yeah i have no idea on that front about why it's not there at the moment probably just didn't make the cut for first push yeah definitely between now and the replant though also all of the previous orders and stuff are like removed so it's a blank marketplace once again so that would be a that would you know it'll be a fresh market effectively uh well my my understanding and correct me if i'm wrong was that pod listings would still be up and could be cancelled upon the replant but pod orders will be those beans will be redistributed to folks in their unripe state uh i'm actually not clear on the listing front so we'll have to double check on that front i see approval this is typing so perhaps they'll correct me all right uh jadob asks previously beanstalk had used a handful of liquidity pools what pools of beanstalk uh launched with uh you know when we replant the and i think j dubs also it's kind of curious if replanting its unpausing so yeah i think those those verbs can be used interchangeably uh classic bean stock painful lingo so the upon restart the code that was sent to for audit can support a meta pool on curve which will most likely lend itself to a beam three curve pool but in theory could be could be another curve meta pool uh the hope would be to shortly thereafter launch other pools like a bean eat pool but uh the the the code that has been sent for audit is to support a curve metapool so other than that uh the world is our oyster but it'll it'll likely have to start as a curve metapool and that uh that snapshot should hopefully be up sometime soon maybe this week we will see uh alex made a comment in the chat um there seems to be confusion around the forwarding of unripe assets so the i think the idea i'd maybe publish you can clarify what i get wrong here is that only circulating assets can be ripened or vested into their underlying asset so if you have unripe assets in the silo you first have have to withdraw wait for the withdrawal timer to elapse and then you can ripen presumably and perhaps maybe there'll be a way to do that all in one transaction i'm not sure so there's in reality when beating stock re-launches there will actually be four white listed assets there will be beans there will be unripe beans there will be lp tokens for whatever pool is chosen for restart and unripe lp tokens and the conversion in particular the conversion between deposited unripe assets to circulating deposited assets or circulating assets to deposited unripe assets that will not change from a user experience perspective so if you have unripe assets in theory you can withdraw them from the silo and they will remain unripe assets that doesn't necessarily make sense as efficient behavior but the concept is what it means to ripen your assets is to to convert them from unripe assets to their normal state so from unripe beans to beans or from unripe lp to lp tokens uh when you do that you forfeit your rights to any future uh growth under the unripe beans or lp tokens because you're now converting them from unripe beans or unripe lp tokens to normal beans or lp tokens so the forfeiture of future vesting let's call it comes from the fact that you're no longer the owner of the unripe assets you're converting your you're ripening your unripe assets into normal assets so there's no change in what you can do with the unripe assets the question is just when do you want to ripen got it thanks for clarifying yeah regarding uh i mean the unpause replant stuff i guess technically unpause is like a bean stock function that has happened in the past and so my vote would be that unpause is part of the beanstalk replant but anyway yeah neither uh here nor there uh jadab asks in the in the recent write-up you published a great write-up by the way publius wrote there are current inefficiencies and the models in their eyes what efficiencies like bip7 have been most helpful to tighten up the model what are your what are the main inefficiencies uh in your view so the there's a couple a couple of obvious ones and then perhaps some less obvious ones so the obvious ones are that when you're converting uh when you were converting lp to beans the change in the bean denominated value of the assets during the time that you were in the lp basically made it such that sometimes when you're converting deposited alpeda deposited beans are actually losing stock uh net net and therefore that makes it unattractive to convert lp to beans and that's an inefficiency so that's one one case and that's an easy fix uh in fact i think that fix was included in the code that was sent to the auditor so hopefully that's something that the community can vote to add to the protocol before even unpause but that is one example of an inefficiency that stares at us another one is the weather so you have this weird uh this weird thing where when the weather is at like a couple thousand percent the three percent interest rate makes changes make a lot of sense or at least a lot more sense than if you have the interest rate at five percent right if the weather's at five percent a three percent change in the interest rate is really substantive so there does need to be some sense of scaling the weather uh but how to do that in an efficient way is a very tricky and not easy to do um the question of what's an optimal pod rate that's also unclear and i mean those are the ones that kind of stick out stick out obviously now one of the more existential questions is let's say that beanstalk is massive and the vast majority of decentralized liquidity that it trades against is ethereum when the value of ethereum decreases for whatever reason that will create some sort of negative feedback loop where the value of the feeling is decreasing that creates less liquidity for beans to trade against and perhaps increases the risk profile of beans such that uh you know you have this weird correlation between beans and ethereum that you want to avoid and so the the question is how can you potentially have a diversified but still decentralized set of assets that trade against the protocol and then the question is well can you maybe create like protocol native derivatives that allow people to take unique exposure that's some somewhat of a hedge to ethereum such that the total value in the system uh remains remains relatively constant or is delta neutral let's call it to the price of ethereum so that would be that would be one thing i see a comment in the chat about a weather bidding system the problem with that is well they're not necessarily any bidding system but you can't have a bidding system where any bid is accepted you could have this weather uh you still need a maximum interest rate for the bidding period and the question is how to change the maximum so the bidding doesn't necessarily the bidding can improve the efficiency but that doesn't affect the the fact that you do need a maximum every season and how to set that maximum is that's really the inefficiency as far as we're concerned at the moment but there's also the potential to improve the price that beanstalk is getting if you have a bidding system i have one follow up question about something you mentioned earlier um what was the uh napkin map that you did to get a 15 pod rate being the quote unquote equilibrium so i would have to [Music] try pretty hard to go find it but if i recall correctly it was an analysis that alexander hamilton did on the uh the sustainability of the debt levels in various countries as he's discussing the potential implementation of uh debt for the american government uh for the for the american nation let's call it uh and [Music] he suggested i think a 25 percent debt level was sustainable and now now i might be reinventing history here but we had originally said the optimal power rate would be 25 and the excessively uh the the lower bound would be 15 percent and then the upper bound would be 35 but then given the the nature of the season of plenty we basically were like well you can't have a season of plenty happen at 15 debt level so we we chopped everything down by 10 and made the the upper pod rate the 25 such that being stock is either below the sustainable pod rate or above it now not definitely more art than science there so this goes to why it could likely further be improved tremendously but there is also no right answer there because you do need some amount of debt such that people feel like you have a a a reliable credit history but on the other hand you need a low enough uh amount of debt relative to the supply such that whenever hits the fan the system can can scale down appropriately how would you try to optimize that given that it's primarily theoretical could you repeat that i don't think i got the question so if you're sitting down and thinking about how do we pick a better equilibrium i'm just curious or would be interested to hear you pontificate on how you would actually go about uh improving that given that you know you can only run beanstalk once i guess yeah well this is honestly i think you'd have to [Music] do some pretty sophisticated modeling to the point where i don't know how valuable it is at this point in time right so the real question is you're modeling the amount of debt and how the marginal increase in pod rate affects the expected weather that beanstalk has to pay and therefore what you're trying to do is minimize the circumstances based on expected inflows and outflows of demand for billions or net demand for beans let's call it uh such that the the change in the marginal change in pod rate is never greater than the change in demand for soil or something like that but but again you need more you need a lot more data as to how people will price weather in order to do anything meaningful on that front and i we've in general trying to refrain from doing modeling of that sort because it's kind of ridiculous particularly in the early stages so maybe in 10 years you'll have enough data but probably not still [Music] got it yeah there's a lot there but thanks for thanks for elaborating well because it's really a behavioral thing right how does the market totally demand soil so you can't really model that reliably [Music] agreed all right so back to the chat uh uh other published clarified from earlier that uh pod orders in the marketplace will be removed because they're actually being sitting in there and that those will be distributed as unripe beans and that pod listings don't have to be removed the pod line isn't changing at all and it costs a fee to create a listing so i figured we leave them open uh alex had a follow-up question on the withdrawing unripe assets he's asked what does that mean is it mini t or erc20 that i can transfer so my understanding is yes unripe assets are erc 20 tokens that you can transfer and as publicly mentioned earlier there will be four whitelist whitelisted assets in the silo at the beginning the unripe lp token the lp token and then likewise with uh unripe beans and beans but uh let me know if there's anything you wanna you wanna add there i would just then ask will there be a time you know for people to potentially cancel their listings if you know the listing that they were willing to make prior to the attack that's no longer like upon restart will will any listing be snipeable like how will that work that would be my question if uh natural publish is around and can hop up and answer that you're proposing that maybe there'll be a preliminary period before the replant well just you can't it seems unfair to have these listings that are kind of stuck there like what if or at least stuck there and not have the opportunity to cancel them before they're back live yeah that's fully possible and i do agree that's something we could do the general function i can't hear anything other than is generally possible can you hear austin uh not quite yeah so apologies yeah totally open to that idea and love that idea appropriate a window people can you know cancel their open listings but generally the idea was that you know every listing post replant is going to be you know every pods are equal to value free unplanned as being stocked you know we can't hear you so this is uh but but uh glad to hear that people will be able to have the opportunity to cancel their listings uh but otherwise very hard to hear what you were saying apologies yeah i think publishers are trying to say that the idea is that a pod post replant is going to be equal to or less than or we'll have a lower value than it did pre-exploit but you know i guess there's some assumptions there so perhaps it makes sense to have a preliminary period to cancel them in advance definitely some assumptions there all right uh ed from edgar allen pizza can you talk more about the role of the 77 million fertilizer i would think if someone pulls their unripe beans before vesting but then the full fertilizer is raised there would be some imbalance but i think that's because i'm not understanding the role of fertilizer so i do think there is a situation where we raise all the 77 million and then someone forfeits before 100 of it vests and i think in those cases the unripe holders assuming they hold until all that vests would have a claim to greater than 100 of their pre-exploit assets but uh maybe pulis you want to elaborate on that no that's exactly right and also as alex pointed out that if someone uh ripens their their unripe assets before they fully before all the fertilizer has been sold out that that decreases the amount of fertilizer that needs to be sold because it's particularly the lp because now there's less liquidity that needs to be replenished totally yeah so uh edgar on pizza just to confirm when you say there would be an imbalance you're totally correct and that imbalance would be reflected in everyone else having a greater claim to the underlying vesting assets i would encourage folks to keep dropping questions in the chat but uh i actually had one for you puglis that i wrote down earlier um could you i've heard you talk about in a couple mas about how inflation affects beanstalk and you wrote in that last article you put out that uh you know inflation of the dollar is a tailwind for beanstalk the the main way i imagine that being is that the real value of its obligations like the pod line uh decreases but in what other ways uh does it affect or help beanstalk so the outstanding bean supply uh given that it's denominated in dollars so the goal of beanstalk is to maintain their value denominated in dollars the fact that the value of dollars is decreasing dramatically in real time is the definition of a tailwind for the system because it is able to like the its outstanding i don't know if you want to call them liabilities but you can uh the liabilities are decreasing in real terms and the the question is well what would that be reflected in it would probably be reflected in an increase in the price of ethereum for example such that if the same amount of ethereum stayed in the liquidity pools trading against beans the value in those pools would increase and the bean supply might have to increase to meet it unless you had uh cell pressure right so one of the tailwinds of the system both in terms of new demand in the form of liquidity prices increasing and potentially uh providing liquidity for people to sell because the value of the liquidity is increasing as well that's a tailwind from a lot of different angles for the system if you're going to peg to a like the hardest asset of all which is bitcoin uh that's a little bit harder to see whether the the same model can can sustain itself it's possible uh but it's it's harder to it's harder to see that working in an as robust fashion as a dollar denominated bean stock where its liabilities are decreasing constantly what state do you think it would be appropriate to start i guess trying to issue uh have beanstalk issue other assets well like on the order years from now or yeah just curious terry i think uh ref on that i mean on the one hand the original white paper was written such that there were we thought there would be just different beanstalk uh so like a btc bean beanstalk and a separate beanstalk for different assets but over time we realized the network effect of the credit history of the single bean stock and so it's really it's hard to imagine having two bean stock that have the same model but different pegged assets i mean they could compete with one another in theory but it almost makes more sense for them to just be issued by the same beanstalk from a network effect perspective and leverage the same credit history as opposed to compete for lenders and in that instance it would really just be up to the doubt when to do that and you know there's a lot of questions what acid is it peg to what is the future expected movement of price of that asset compared to the assets that are available to trade against uh in in liquidity pools i think an an eath pegged bean is is maybe the most interesting thought experiment to run through uh because you you you have a lot of eat to trade against it uh and then your your price movements are kind of captured in the price of ethereum so you have this pool where it trades against eth and it's just one to one it's an interesting that's probably the most interesting one to think through btc is a little bit harder to think through because you don't have bitcoin on ethereum you have wrapped bitcoin and that introduces [Music] some some frictions uh in terms of the cost of liquidity uh as well as the available supply of liquidity and [Music] i mean the real question is just what is the the the purchasing power of these obligations right so the the purchasing power is the issue it's like how much purchasing power is the credit of beanstalk uh going to guarantee or try to guarantee uh and the as the purchasing power of issued assets or the i guess the issue the assets that have been issued what they're pegged to that increases the liability of the credit systems so the goal the goal would be to minimize liability as much as possible which is why being paid to an asset like the dollar that is collapsing in value is uh easier to do than being paid to something like bitcoin yeah appreciate you humoring me there so uh there seems to be a couple a couple comments in town hall chat about um i guess what happens when you ripen and the nature of the forfeited assets uh as your own pizza says real question left i guess is if unripe beans are lost and we lowered do we lower the amount of available fertilizer in real time so the if unripe lp is forfeited given that fertilizer re-capitalizes pre-export liquidity that would be a case where the amount of fertilizer sold could go down but my understanding is that when unripe beans are forfeited or ripened uh the number the amount of fertilizer doesn't change but unripe bean holders have a greater and greater share of the underlying nesting beans is that right correct cool and i think that's uh made currently in the barn ray's guide but if not definitely shoot me a note uh and then alex says if fertilizer is sold out then shout out alex appreciate it all right oh go ahead no it's going to say man uh mr manifold with the uh the bean sprout tweet it's a good one well i have one more question uh if nothing else so i'll go ahead and shoot um i was curious to hear you talk about what the first couple weeks of of beanstalk looked like like pre-september pump and dump were you spoon-feeding beanstalk on both sides like dilo deposits and sewing and when was it clear that someone else had found beanstalk and had started interacting with it so that's a great question the basically even the first day uh the sunrise bot uh the sunrise call started getting botted by like mev bots and so we had like this really horrible problem where you know we need to pay like a hundred dollars an hour out of pocket uh or more because if we didn't call the sunrise function early enough uh it would you know whenever we would call it the bot would would be would would mev the call and then just dump the beans and so really we we from a very early uh period of time we're kind of like you know i don't know if spoon feeding it but it's like bleeding out or you're there's this cost to run the system very early on and so basically due to the nature of having this high cost and we had no real monetary backing we were like the runway for the system was like day to day we literally we didn't have the money we were like pretty you know we were broke two of us just graduated college more or less i didn't even graduate so it's not like we had lots of money behind this thing we had no backing so we basically immediately tried to tell people anyone that would listen about this thing and i think within like within maybe a week or so there was some exogenous demand it's unclear where any of it was coming from uh but like there was a lot of activity that we couldn't necessarily tell who it was was the twitter up or the telegram up at this point the was it being communicated i don't even know if there was a twitter uh or uh i don't think there was a twitter i don't i think the telegram group that currently exists got started in early september maybe like first week of september so there was a there was like a maybe a two week period where it wasn't on telegram and then it switched to telegram and once it was on telegram things kind of got out of our hands generally and you know mid-september then it was all out of uh it you know the pump and dump really took things out of control but i think there was only like maybe 10 days uh immediately after the restart where it was um it was like really had to be cuddled and we're pulling like 24 7 like making sure someone was always awake to call the sunrise and you know pretty quickly it just started to run by itself because of these mev bots that's pretty awesome and a good story match exercise assuming you told mike early on who means alluding to no regrets this is funny i think i sent novo the white paper and like an early draft of the white paper in may um and i don't i assume he never read it but uh you know it's one of those like you gotta like probably like five people i told about it and i don't think any of them took it seriously so uh i don't know if the joke's on me or jokes on them but uh fun stuff did they realize that when uh when it was taking off in march and april i i got some calls after the attack making sure i was okay actually one of them was like wait was it you weren't behind beanstalk were you i was like dude what are you talking about i sent you the white paper so uh you know that's good it's fun stuff but frankly uh you know i'm kind of like a hermit so it's not like i have that many people i was uh felt compelled to share it with unless you like the only reason to share it with someone was if they they like i felt like an obligation to them because they got me into crypto or they taught me something and it's like you know paying you back basically but no and otherwise you had to find beanstalk for yourself yeah i tried to get my high school econ teacher who like totally inspired me my freshman year to buy it but uh no dice there were they in crypto no no not at all hours and hours trying to explain it but uh whatever fun stuff indeed all right uh looks like north has a question was there a specific reason to use the unit swap pair versus sushi or some other decks well the short answer is liquidity uh and at the time the usdc eve porn uniswap was the most liquid and had the deepest depth if i recall correctly well we're at the bottom of the the town hall chat um maybe i'll pause for just a few months in case folks uh squeeze a couple more questions in and if not we can wrap up uh sir downplaying asks what silver linings to the exploit do you see moving forward well it's tough right the goal is to always look at things as glass half full i think the most the most obvious silver lining is that the fact that this problem existed meant that at some point it was going to be exploited and the fact that beanstalk was growing so quickly you know the silver lining is that sooner rather than later is when you want when you want something like that to actually happen if it's gonna happen and so to some extent beanstalk got off kind of cheap now the other silver lining is that going forward uh there should be a very high focus on governance and security which is in addition to the novel economics of beanstalk very clearly something that it will have to be a leader on uh within within the space and that's cool and we we have an incredible down community here that i think is up to the challenge to to answer some of these really hard problems uh another silver lining is there's a lot more eyes and ears and recognition on beanstalk i uh i was reading an article put out by uh and it was naidig and beanstalk is referenced as it's referenced in the const text of a hack but it's like the fact that this is a name that everyone now recognizes and was being cited everywhere that's definitely a silver lining so we wish uh it was it was uh recognizable for better reasons but we're betting on on a longer term horizon that that will be the case agreed all right manifold asks does beanstalk want to raise uh the barn rays or sorry does beanstalk want to fill you know sell all 77 million fertilizer i guess you know kind of context is before the replant i guess the beanstalk doesn't want anything now in terms of what's likely to create more or less volatility the because of the nature of the vesting which is a the i think before i said it was the minimum but i actually think it's the multiple of the fertilizer that's been sold and the fertilizer that's been paid back and the concept is regardless upon restart there will be no supply independent of how much of the fertilizer has been sold however because it's the multiple of the two the question is over a certain amount of minting how quickly will all of that supply actually get minted and so at a smaller bar is percent the the the supply that you're going to have in absolute terms is going to be smaller so in theory it's kind of like the system will be operating at a smaller scale which isn't necessarily better or worse it's probably better to start a little bit smaller all else being equal that was one of the nice things of the the launch with 100 bean supply but on the other hand if you're too small and there's a significant amount of excess demand you could have too much growth in a period of time which leads to a lot of downside volatility so there's no there's no right answer in terms of what beanstalk wants but it doesn't have a problem if if there's no you know no additional fertilizer sold beyond what's already been sold beanstalk could could relaunch and be perfectly uh fine in theory like there wouldn't be any any issues from beanstalk's perspective if it if it raised more uh or even less than it did right now so no beanstalk doesn't want anything yeah a few things to consider in both scenarios uh rg asks do you have any comment on the whale that bought almost five million in the fertile uh in fertilizer no and in particular i just want as we started this call our class going forward we're going to try not to comment on on any capital basically whatsoever that's not a role we want in the community i see a couple folks typing i'll wait and see uh nas jack's raising his hand let's see what's up now jack i didn't have to type it all out i beat everybody um so so i wanted to i'm not sure if this i only caught the first or the last half of this uh call but vitalik wrote that piece on stable coins uh like two weeks ago and one of his comments was like the wind down scenario so i'm not saying like if bean can go back to like 100 beans but say the market cap is like 200 mil could bean go back like sustainably to like 100 mil like are there mechanics to reduce supply that much while keeping price one dollar or something yes so if anything i think the question is not whether beanstalk can sustain a decrease in demand of 50 or 70 or 80 uh for a time or for a significant period of time the question is a full wind down right that seems to be the question that was posed by vitalik and the full wind down or the requirement of a full wind down is something that by definition without collateral and being over collateralized or at least completely collateralized is basically impossible and so the it's hard to yeah it's it's a little bit tricky to know yeah it's uh ultimately the full wind down is not something that bean stock can support if there's no demand for credit and the price of a bean collapses to zero that's going to be that's an ugly situation in which there will be significant value lost and destroyed now in terms of in a full wind and how much liquidity is there that's where you get into the upper limb of a hundred percent of the beans that exist can have like one dollar a value whatever they're pegged to a value uh in liquidity such that the bdv of the system is 2 x if x is the bean supply so if you have x an exogenous value and you have 2x and bdv then in theory on average people are going to get 50 cents on the dollar back in a full wind down now it's unclear what the what the 50 cents on the dollar actually is distributed by right they're made in a full wind down there's a benefit to leaving earlier whereas if it's not a full wind down there's a cost to leaving earlier right so if anything there's a question of is it a full wind down or not uh i think the full wind down is the epitome of a collapse right so it's like it's the main question of is beanstalk collapsing or not now the system is designed such that even at 20 cents if the bean price is at 20 cents the system may not be collapsing as much as it's just flushing out weak hands and people that are willing to sell their bean obligations for less than a dollar but there's also some something that seems to be glossed over regularly is the concept of i don't actually know the terms to describe it particularly well which is makes it difficult to describe well but the concept is that there can be demand for beans but that it's not necessarily a new demand for beans and this is enabled by convert right so you can have if you have people that are in the silo and somebody sells their beans and now the price is below a dollar you can have somebody that converts their lp to beans and returns the price to adult now in practice they did buy beans right so they increased the demand for beans but on the other hand the the capital that they had already even if not explicitly a hundred percent beans because it was half beans the the profile of a deposited lp token from a risk return perspective is very similar to beans themselves and so the question is you know you have exposure to beans that is decreasing but demand for beans that is increasing and or well maybe you have the exposure to beans that is staying the same from the people that are staying in the south someone decreases their exposure to beans so you have a net decrease in overall exposure but because someone is willing to increase the bean portion of their bean exposure which again is very similar that that actually covers the decrease in demand for beans so to answer your kind of the question that you asked explicitly nasdaq about the 200 million down to 100 million well if there needs to be if you have 200 million beans that decrease to 100 million beans you can do that if the protocol borrows 100 million beans from the market but maybe beanstalk doesn't need to borrow 100 million beans from the market if the demand this is the thing right you're saying well demand decreases from 200 million beans to 100 million beans sort of by that definition that means beanstalk has to borrow the 100 million beats from the supply to return them to a dollar if you're talking about overall demand but if you're talking about exposure demand for exposure to beans well then you could have that exposure go from call it 200 million which is where beanstalk was before it had like 200 million bdv to 108 million bean supply you could have that go down to 100 and you could you could have uh the whole you could have the system remain at a dollar where now you just have less non-beam liquidity and more beings right so it's still working through the best terminology to describe this but hopefully you know we're being somewhat clear as to as to the differences here in overall demand versus exposure to beans per se yeah i'll definitely i'll definitely have to listen to that again on the podcast um maybe a similar question is like does this kind of indicate that maybe there needs to be another way to burn bean supply like i don't know maybe you burn beans and you get more stock than just depositing liquidity i don't know i don't know exactly how it would work but another way to reduce bean supply i wouldn't think that that would be implied by any of these comments cool thanks all right we're at the hour but there's one more question then we can uh go ahead and wrap up but uh a meta question from dumpling uh there was a question in general a few times about why the humidity didn't decline during this pre-replant barn raise uh period do you want to comment on that [Music] yeah this is most similar to like the bidding period if you will uh which i guess also had a bonus to it so there's something to be said for having a bonus to bid early the short answer is this was a i think economically it'd be better to have some sort of incentive to participate slightly earlier but in the grand scheme of things the goal here was to create like one set of terms that could be easily marketed uh two potential uh larger investors and you know that that that would have been much more difficult the whole point was the original bond raise was too complicated so there was the the thought of introducing some sort of otc version and then that evolved to be back towards the public version but we still wanted to retain the otc aspect of it so there was this economic inefficiency introduced uh in effect to make it such that there was this single class that that was easy to to explain to people make sense awesome why don't we go ahead and call it there i think that was another successful instance of beanstalk university i think uh the thursday doubt update name a will happen uh at 12 central time this time to allow some folks from europe to participate you can check the uh time in your time zone on discord but otherwise uh thanks for okay well mod has one more question uh why don't why don't we do it who asks doesn't the unwind question apply only to collateralize assets not anything that adds value how do you unwind ethereum or bitcoin well that's that's a loaded question mod um i mean here you get into sort of some larger questions about where does the value of bitcoin or ethereum derive from and in the same way that beanstalk even though it runs on ethereum uh it's meant to be its own system uh its own sort of where money and the value is created endogenously that is i would probably agree with you that that framework doesn't really apply so the whole concept here is to create an endogenous uh source of value as opposed to an exogenous one even though in practice the eggs endogenous source of value comes from the liquidity that trades against beans which is exogenous values so this is actually where you have a really nice marriage between ethereum which is looking for for for holders right it's looking for economic uses that that require the holding of aetherium uh that's where beanstalk and ethereum have a really potential nice uh harmonious relationship in the grand scheme of things but that does go back to the larger existential question uh that we raised around well what happens if the value of ethereum starts to decrease significantly compared to the value of uh beans and ethereum is the main source of liquidity that beans trade against so some interesting uh some interesting thought thought exercises or can be had there for sure all right uh well why don't we go ahead and call it there uh we'll see you all thursday and hopefully for next week's class on tuesday uh thanks for this and thanks for coming everyone