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Beanstalk University Class #31

Date
June 21, 2022
Timestamps

0:00 Decentralized governance discussion • 14:43 Exposure to Tether • 24:01 What is fair game for the DAO to vote on? • 29:52 Any update on the date of the Replant? • 32:35 How has the ETH price affected the Replant plan? • 34:57 How should Seed rewards change for BEAN:3CRV? • 47:27 How will Unripe assets work with other liquidity pools? • 49:45 When can you Convert from one pool to another? • 52:40 Is Publius participating in the Barn Raise? • 52:50 Is the Tractor in the room with us right now? • 54:00 Can you Convert from 3CRV to Bean to ETH with no haircut? • 55:47 When there are no Pods do all Bean mints go to the Silo? • 57:25 Wen Bean tattoo? • 57:40 How will the Curve pool affect minting?

Type
Beanstalk University

Recording

Notes

How are we thinking of designing decentralized governance?

  • Important decisions that will remain things the DAO needs to vote on:
    • Upgrades to the protocol itself
    • Upgrades to the whitelist for the Silo
    • Changes to the Silo whitelist in terms of Stalk and Seed
  • Things should move slowly. There should be no rush to changing the core of the protocol.
  • More likely to require quick changes to the oracle, what assets are whitelisted, or what assets Beanstalk is willing to pay you to keep in the Silo.
  • A lot of unanswered questions. It is clear that it should be easier to change some things more quickly relative to others, but otherwise it's hard to know exactly what the process should be.
  • If Beanstalk becomes a major liquidity provider on Ethereum, what will it look like for you to be able to provide liquidity to an asset/pair without getting paid for it?
  • You need to make sure that whitelisted assets can't be arbitrarily minted.

What would happen if Tether loses its peg?

  • If USDT was to significantly depeg, the 3CRV pool would become almost entirely USDT. It would turn into full exposure to USDT.
  • It's hard to evaluate the risk of that against the risk of ETH downside. Consider that if Tether lost its peg, ETH might have even greater losses than USDT.
  • Adding a BEAN-ETH pool is priority number 1 after Replant if we start with BEAN-3CRV, as ETH would be the most decentralized option.

Any update on the date of the Replant?

  • No firm date at this point. Hopefully the Trail of Bits audit will be complete on July 6th, and ten days after that the final report will be released. Looking at he second or third week of July for the BIP to go live at the earliest assuming no hiccups whatsoever.

How has the ETH price affected the Replant plan?

  • It would have been nice to have the data that we would have gotten if Beanstalk would have been live during the market downturn and the Terra collapse.
  • The barn raise was denominated in USDC, so the market hasn't had much affect on Beanstalk's capital.

How should Seed rewards change for BEAN:3CRV?

  • It might be necessary to incentivize the BEAN:ETH pool more than the BEAN:3CRV pool.
  • Prior to the exploit the BEAN:ETH pool was losing liquidity to the 3CRV pool.
  • Hard to model precisely, will require ongoing analysis.

With the gauge system, will people be able to vote on how much they think each asset is worth?

  • Not sure that is the best way for it to work. We want to avoid Stalk being used as just a bribe token for Bean seignorage.
  • Voting is the idea, but we need to think about what people are voting on.

How will Unripe assets work with other liquidity pools?

  • You probably won't be able to convert unripe BEAN3CRV to unripe BEANETH.
  • It is technically possible, but it would add significant complexity, which would delay deployment. It would also require the user to take a haircut.

When will you be able to Convert from one pool to another?

  • Has not been fully fleshed out.
  • You will always be able to convert from BEAN to LP when above peg, and from LP to BEAN when below peg.
  • There are additional considerations when moving from one type of LP to another, such as the difference in the deviation from peg between the two pools.
  • It's important that we aren't paying people to make a market in an inefficient way.

Is Publius participating in the Barn Raise?

  • Most certainly.

Is the Tractor in the room with us right now?

  • It's kind of just a meme where the tractor is the industrialization of the farm, and ultimately there should be all this tooling and automation to make farming on the bean farm much easier.

Can you Convert from Unripe 3CRV to Bean to ETH with no haircut?

  • No, you will not be able to do that with Unripe LP.

When there are no Pods do all Bean mints go to the Silo?

  • Yes, if all debt is paid off all mints go to the silo.
  • It is unlikely due to the mechanism for issuing soil.

Transcript

all right i want to talk about governance uh publius and i know this this is something in general that we wanted to discuss and and know how to do uh or you know how to go back uh to fully decentralized governance but i want to talk about governance in general on how we're planning it and then to talk about some examples of of how governance work in general and when do we think you know these are things that we want uh or the community in general wants to like get involved then or not so i'm going i'm going to split my questions into maybe like three parts first of all is how are we thinking of uh designing maybe a decentralized governance uh where are we with that when do we want to tackle even even this and then the second thing is maybe some of a few examples have already happened in d5 lately and what what do we think about about it and in that i'm going to give two examples for us to discuss the first one is where where the dao uh let's say you know the protocol does a mistake or something like that of some sorts and then the dao thinks that that was you know it wasn't right even though you know it was what was designed and then they put in a proposal uh to change to change that and in this case i'm gonna give the juno a blockchain example where you know they they wanted to give a split and then what happened is they realized someone had multiple wallets so they thought that was unfair and they you know decided to vote to take that back so is this is this is this part of the ethos of decentralization is there anything that we think is you know wrong there just given that at the end of the day it was the dow that voted uh or this is how decentralization should work or is you know it's meant to work and then the second one is um if the protocol does any activities or does market activity is uh um thinking that this could be you know better for the protocol itself and in this example i'm going to give the swordland example where instead of waiting for a liquidation to happen that they think might impact the market they were like why don't we interfere you know ahead of that happening uh uh of you know for for the overall uh best of the protocol is this okay as well when it comes to decentralization didn't everyone get the ability for them for it to vote what are your thoughts about these things was there a third question because you said i have three questions and then you yes the the the first one was about having uh like decentralization general and the way of voting how are we going to ensure that we are getting the decentralized vote let's say so right now we're in the bcm eventually we want to move into and then you have two examples was that one question or the two examples were two questions the two examples are where after we've sorted out you know decentralized governance when do we think is it okay for the you know for for for for governance to interfere with these things or not when do you think is it appropriate to to get involved in these things or you know just let things be and this is not uh what what governance is about so there's a lot to be said uh a ton to be said about decentralized governance uh hopefully this is the one of many conversations on the topic held uh within the dow and class is a great forum for it now at the highest level the i think the starting point for this discussion and it's it's obviously relevant but it's a great starting point is what actually happened to beanstalk right where the uh code as it was written uh was nothing changed there was no attack on the code uh like there was no bug in the code instead the code as it was written was used uh and the use of the code was against what was the intended use of the code and this is one of the main uh from a from a very high level like a philosophical question as to what to do in a decentralized setting when there are issues in the code and in particular the the in the early days of ethereum the eve dowhack had a similar issue where ethereum ultimately forked because of the uh the lack of consensus on what was the appropriate thing to do when it comes to honoring the theft or not now in the case of the eve dowhack the hack was substantial enough to the ethereum network itself that caused a fragmentation to the network uh and in the case of beanstalk the attack was significant enough that it has caused it like there's a new beanstalk that is does have slightly different changes to it it's the same contract but the concept is this is this has led to a full some sort of split it to some to some extent and the question i guess because ethereum was the native asset of the blockchain a fork can do that right you can undo the attack with a fork whereas in the case of beanstalk you would have had to uh reorder the entire ethereum blockchain uh in order to to undo the attack in this instance because the value that was stolen wasn't just ethereum uh although i guess you could make the argument that it was transferred into ethereum so at that point you could have forked it but the the concept is because the value is usdc right because it's other assets that are exogenous to the network to the beanstalk network into the ethereum network it's not so easy to just fork it or replace it you can't fork a house right so as soon as you get into other assets that are not just uh created by the consensus of a group uh it's a lot more complicated to think about what to do and one of the the real rubs here is when you're building permissionless systems that are meant to be very low friction and fast uh that you there are unknown unknowns that can potentially cause there to be major problems and so the question is how many guardrails should there be what types of things need to be protected what is appropriate protection and how quickly should changes be able to be made and implemented uh these are like very high level questions but across the board when it comes to beanstalk governance and there are a couple of very important pieces of governance going forward that will remain things that the dow needs to vote on upgrades to the protocol itself upgrades to the whitelist for the silo and changes to the composition of the silo white list in terms of stock and seed distribution and the latter two are really interesting uh i guess the the former is the one that got attacked uh but the former in terms of changes to be in stock as a protocol are easier to say everything should move really slowly right the the there's no rush to changing the the core of the protocol or there really shouldn't be uh any need to rush to change the core of the protocol what's much more likely to be a need to move fast is a change to the oracle or a change to what assets are whitelisted or what assets beanstalk is willing to pay you to keep in the silo so in practice let's say uh theoretically let's go back uh two months or let's say we're at the same period of time but two things haven't happened uh yet one beanstalk hasn't been attacked and two tara hasn't collapsed yet and so now there's being four pool has been white listed in the silo and we're you know beanstalk has a protocol it's getting some great incentives from tara and from frax uh in order to have the assets white being for being four white listed in the silo and now tara starts to go under and in short what you would have happen is that beanstalk would be willing to bid or provide uh provide you interest for continuing to hold the ust and in short it's it's most likely particularly when you have assets that aren't just going down 90 or 95 but going down a hundred percent that it's in the best interest of the protocol to at some point stop either paying people to leave those assets deposited in the silo at a minimum or potentially remove those assets from the white list and how quickly to do that uh what what it actually looks like to that process moving quickly i mean on the one hand you could make the the argument that in a frictionless silo which is what we're hopefully building where you can convert between different lp pools relatively frictionlessly there shouldn't be any reason why if ust is collapsing that people don't sell their ust exposure within the silo such that they move from being four pool to bean uh ether being three curve whatever it may be but at the same time uh the beanstalk as a protocol still probably shouldn't be uh shouldn't be awarding people senior rich for leaving ust deposited in the silo after it collapses to zero and more importantly or more dangerously perhaps is if you have minting based on a pool that uh becomes unreliable so let's take the bean three curve pool which it seems like uh will be based on the latest uh snapshot vote not sure if that finished yet i think it might finish tomorrow but so far seems like there's a significant majority voting for the launch with the three curve the thought is that well what if tether goes under and how how does the dow quickly respond and make sure that the you know i mean frankly if the only pool in the silo is three curve beanstalk is going to have a lot of tether exposure after it collapses so that's one of the other reasons that having a diversified set of lp tokens white listed in the silo is important but what does that process look like for white listing for unwhitelisting similarly how does that apply to the oracle or more importantly how does that apply to the oracle how quickly should changes be made to governance i'm sorry to the structure of beanstalk as a whole these are sort of fundamental questions that i don't think at this point have great answers other than it's very clear that relative to one another certain things are should be perhaps changeable on shorter order than others but otherwise it's very hard to know exactly what the process should be i think on a more technical level the question of implementation and making sure that everything can happen in a truly permissionless way on chain uh while still being resistant to any sort of malicious changes to the protocol uh that's a very important step that we should you know to answer your first question mod i think we should all collectively want to take sooner rather than later but there are some major questions to to to be answered i think collectively such that we're all on the same page about what is good decentralized governance moving forward and it's not just about making sure that there's enough time for everyone to vote uh you know in in in reality the the easy answer of well once the vote is uh or what i mean you still have to add some sort of flashlight resistance to it but once a bit that's proposed people can't add to the silo that's unattractive from our perspective because you want to allow people the opportunity to join that are part of the ecosystem to join the silo and participate in the vote if they're if they want to or to use other resources to participate in the vote there's nothing wrong with adding more resources to participate in votes in theory but in practice you have to make sure that that also doesn't allow for this to just become like going to the highest bidder per se maybe that's an ideal outcome maybe it's not these are questions that aren't necessarily clear at the moment and in general the the hope here is to create a system where there's no there's nothing that anyone can't do right anyone in theory let's say the attacker was transparent and said here's a proposal to take all of the assets from the dao in theory anyone like beanstalk should be resistant to that type of proposal where people can propose nonsense things and the dow is just never going to vote for it so having a high 50 percent uh majority stock voting in favor of changes that's that was designed to make it really hard to change the protocol it's supposed to easy to change it so uh in general people have indicated an interest in permissionless and immutable contracts uh it's harder to have immutable contracts for beanstalk uh both because the diamond contract structure uh and in reality a lot of beanstalk is likely to continue to change over the next couple of years and so hard to make the contracts immutable but just just rambling a little bit here hopefully it's constructive it is and i have a few follow-up uh questions that continue the discussion there binology raises and so let's maybe take that question and we can continue after hi there can you guys hear me we can hear you fantastic thank you um publius you're just talking about the scenario where tether goes down and we've restarted with the three curve pool could you spin that a little further for what happens if that's the pool that we start with and we don't have any other ones and sort of say how bad that would be and therefore if it's in fact a bad idea that that's the pool that we start with given the uncertainty around tether lately well the concept is the way it would work in practice is if ust really depends uh and the it became worth significantly less than a dollar on the open market the three curve pool would likely become a 100 us dt due to the nature of the way curve works so it would as an amm it would become heavily heavily overweight usdt so basically the three curve tokens they would represent ownership of a liquidity pool that was almost all tether and then tether may or may not have value so from a risk perspective there is something to be said for the fact that if tether goes down or usdc goes down you know not to necessarily say one or both is likely or die deep in a horrible way and it had bad debt uh as a protocol again not to say that was possible but just laying out what could happen uh not to say that it's likely but laying out what what's possible is any one of those could become overweight and right now tether is overweight as in the three curve pool so it's a it's a valid question to ask whether or not it's better to avoid that altogether frankly it's there's a reason beanstalk was originally launched with a b pool right it's the it's the most decentralized uh frankly feel like at the moment in this bear market the risks of relaunching with the bid being eth where it could potentially dip 50 80 percent between relaunch and whenever the low and east is uh that's that risk needs to be evaluated against the risk of tether and you know on the one hand there's this is one of those things that we don't have any sort of information one way or another that would make us feel confident and tethers gonna collapse or not uh there's been endless tether fud for as long as we can remember and so it's very hard to gauge the validity of it however uh the fact that market makers are no longer pricing it at a dollar is definitely substantive and it's hard to evaluate what the actual risk is frankly so what what is the risk of launching against ethan just an absolute [ __ ] market versus launching against tether or some combination of other assets and tether where if tether collapses it becomes full exposure to tether how to evaluate that against relaunching a a month later it's like yeah it's these are all good questions i think at the margin the hope would be that at some point there's other pools added like a bean eat pool uh and when by the time the pool is added there's generalized convert between the lp tokens such that you can go between being three curve and being eth and take away your three curve exposure and add each exposure and therefore people could in an efficient fashion sell all of their three curve if usdt started to d-peg uh but obviously that kind of assumes an efficient market in the silo and people are watching it and it's hard to assume such an efficient market in beanstalk at this point in time but but the concept is the assuming that that feature was live you could at least assume that beanstalk would be able to in short order uh d risk from tether assuming people could convert from being three curve to being uh lp token so let's say that's a month after launch the risk on that front is whether tether depends in that month or two months and how to evaluate that risk against the eth price movements over those two months that would be the calculus and it's hard to know one way or another what's obviously if tether breaks then it's a no-brainer what the right answer is but otherwise uh hard to know thanks for that answer i i think my quick follow-up would just be like i mean it's anybody's intuition and and what you think is a bigger risk but my analogy for myself is like uh investing in a company let's say tether that goes bankrupt versus investing in you know the s p 500 during a downturn which would be eth and like if you invest in the company that goes out of business you're gone your money's gone but if you invest in the s p it's gonna go down and then assuming you know the whole economy doesn't tank it's gonna go up again and so it just it's it seems like two different kinds of risk profiles where one is we're betting that it won't completely collapse versus eth we're just bet hoping that it won't dip further before it ultimately goes back up again so it's like it's a little bit of an all or nothing versus a just enduring the pain while eath goes down if indeed it continues to go down yeah i mean frankly the whole point of beanstalk is that one party can never destroy it so the whole concept of making it such that three curve is you know and tether has a bullet pointed at beanstalk's head obviously it's pointed at their head too but the concept is if they go down we're going down with them that's very unattractive so yeah i don't have any any sort of argument against what you just said but then wouldn't it be wise for you to sort of evangelize against the three restarting with the three curve pool if that indeed there's a bullet in your head from day one pointed at your head from day one whereas it's not the same kind of threat for to be an east pool yeah i think that the point is in our minds it's very hard to to to see tether collapsing so if you know if we thought it was really a risk then i think that's a good point but it's like very hard to analyze what the risk is it's one of those things i think i'll put it this way if tether goes is really goes under um [Music] how's this for for first for a thought if tether goes down i bet that eth will go down more than usdt will like tether has some backing it may not be a hundred cents on the dollar but the cost to ethereum the price the on the price the effect on the price of ethereum and on bitcoin of tether going under i think would actually be more than the price of tether on the market like let's say tether goes to 50 cents uh that's still probably better than than eth would perform over that same period of time if that happened that could be wrong but that would be my intuition yeah i guess i'm not arguing with that intuition i just uh it it still seems true that because tether is centralized and ethe isn't that eth could still bounce back from that but tether couldn't so i'll just leave it there but i think it's definitely something worth continuing to think about 100 all i can say is i think adding a bean eat pool it's probably priority number one after a replant assuming we replant with a bean three curve pool cool all right thanks guys bye thank you sir thank you and i hopefully or i hope not to see um you know usdt debugging and then compared to the impact of eth okay publius going back to governance uh and and and here's here's an example of you know what what we were just like talking about what do you think are the things that the vinson community or the dao will want to get involved in or or not um so you know we spoke about like white listing and doing doing those sorts of uh of things do you think there are certain things that you know the dao is best not to get involved or everything everything is fair to discuss and change as long as you know we're ensuring that people are voting in a decentralized way so this is a great question and frankly something that at least on my end i oscillate between because on the one hand if beans are really the main liquidity provider on the ethereum network it it seems weird that other assets are gonna have to fight and go through governance to just get liquidity of any sort now the issue is that if you're giving people if they're seeds for a deposit or stock for a deposit then beanstalk is paying people for providing that liquidity and so the the thought is what let's say i have i meant i make a new currency uh called publius coin and we control publish controls the supply publius coin and publius coin is now uh whitelisted in the silo and receiving stock and seeds now at that point we can mint infinite publius coin and start to accrue stock and seeds and bean senior age and on the one hand while that may have a negative effect on the price of jublius coin if we keep adding it to the liquidity pool that that's white listed in the silo at the same time it's very much a profitable thing for us to do because there's no cost to minting the publius coin and you know the liquidity in the pool is probably ours anyways since it's our coin and we're the only ones that would provide liquidity to it and so we just start collecting being senioritch so there's a situation that anyone assuming that you get stock and seeds for depositing assets in the silo it's incredibly extractive assuming that beanstalk is going to pay people and so the question is well what does it look like for assets to be depositable in the silo but you not getting paid for it but people being able to provide liquidity for it in an efficient fashion and so the concept is if you have uh one being in the silo and i now convert it into some liquidity pool token that is trading it where into beans trading against publius coin i think the the way to create a neutral market for this is that the stock and seeds is half of whatever the deposited bean amount is so if deposited beans get two seeds and one stock per bdv therefore i can add my beans and convert them or or add the the issue really remains though that someone can still just add publius coin on the on one-sided liquidity and start to just mine stock and seeds and so friend i mean i'm thinking out loud here clearly but the concept is you really do run into this problem where uh to some extent you need to make sure that the assets that are whitelisted in the silo at the very least don't like cannot be arbitrarily minted and there does need to be some sort of oversight on where the supply of these assets comes from now in general if people are adding liquidity in their coins to beans to beanstalk and trading it against beans that is in effect buying beans right you add one-sided liquidity it increases the ratio of x acid to bean and it raises the bean price in practice so to some extent it's beneficial for beanstalk to have more acids trading against beans and as beanstalk grows and it becomes one of the primary medium of exchange mediums of exchange or the primary medium of exchange on the ethereum network uh how to treat this perhaps becomes different because the value of other coins may start to be derived from trading against beans uh in addition to the value of beans being derived against from from the other coins that they trade against if that makes sense like right now the value of ethereum isn't derived at all from the value of the beans that trade against it or almost at all whereas in the case of in the case of uh of beanstalk uh if it's trading against like the beans get the value from ethereum or the beans get the value from the three curve that it trades against so it's just a different you know it's a different dichotomy once beans are what the assets are receiving their value from so uh so something needs to be said for how how that process may change over time and what's a reasonable thing to to offer over time if that makes sense i think there's a lot to just discuss here and maybe just discussing the the bit of um being outgrowing you know ethereum or the network it's um is worthy of some chat um i'm just going to take where we're going to go through some of the questions in the town hall chat and and maybe you can go back to this scooby asks um has there been any update on the launch on the or the relaunch given that the trail of bit uh needs some more time i understand that you know we delayed a bit but do we have do you have a firm date on that uh no firm date at this point uh think that they are so here's the reality we told them once they said they needed an extra week we told them like we wanted because we paid for the extra week so at that point it was pretty low cost for them to tell us like hey we want to use the extra week um which i think because of the holidays it's supposed to end on uh july 6th uh is is i think the date that they gave us now we told them like we do not want funds or budget to be the constraint here uh beanstalk farms has more usdc in their wallet they can be used for security and and other relevant things and the concept is if trail of bits needs more time we told them they they should take as much time as they need and i think we can all agree given we're already all waiting for the audit we want the audit to be the best quality possible so hopefully july 6th uh they will they will they will be complete with the audit then they said it's 10 days from then until they they will submit their final report and i think it is it's likely that that nothing will happen until the final report although if if there's really nothing going on and the final report's just going to be clean then maybe we can propose the bip to replant while we're waiting for the final report so that still puts us at the best case scenario like second week third week of july and that still assumes no hiccups whatsoever and how boring things are going you know no no hiccups there are no extensions on that front as at the moment so uh it really is just a question of the trail of bits audit and whether any changes from any of these audits are are significant such that we need to push things back further but as of now hopeful that uh second third week of july the bib to replant will go live and then obviously uh under the the bit procedures it'll take a week unless there's a super majority which is very possible uh to replant beanstalk once once the audits are all have come back and been published and stuff so that's where we're at on timing okay schwagermy asks um asks about um if the price of eve in specific or the market conditions have impacted um positively or negatively or plan on to replant i mean i i hate to be like a wood or should i could a guy but it's just a shame that beanstalk doesn't have the the data of being on during such a market collapse uh beanstalk had been on during like 50 each drawdown but there is something to be said for just being on during the whole [ __ ] show and it's too bad that that's that's data that was lost and i think we all would have liked to have seen how beanstalk performed during the past two months uh with the terra meltdown and then the the market meltdown now other than that i think a lot of us working on beanstalker who are participating in beanstalk uh in some capacity uh feel that beanstalk is a major step forward for the structure of d5 and that that a lot of the current stuff in d5 doesn't really work because of the high carrying costs which is a structural issue that beanstalk tries to solve so the fact that so much of the stuff out there is uh you know getting re-priced uh significantly repriced uh that's if anything it just makes the the temporary haircut or the temporary decrease in the bean supply uh you know much more modest right the bean supply is still going to restart it uh something like more than more than 10 million beans so uh we already have 10 million in the in the in the in the fundraiser so by definition we can have more than 10 million beans the concept is beanstalk's decrease in size doesn't look so bad compared to everything else but otherwise don't think there's much to be said for how this will affect beanstalk's chances of success going forward at least at a very substantive level yeah and just to add to that the bond raises in usdc so whatever fluctuations are happening from now until then that won't impact us austin asks um does publius think what does police think is a reasonable seed reward for the being three curve uh pool and if that reduces how how do you and how does that impact current um or existing depositors do they get a reduction in their seeds so the whole idea behind moving away from fungible or liquid seeds is exactly for this reason that should the dow decide to change the amount of seeds for a deposit that that can just be changed going forward so any of the stock you've earned in the past the grown stock from seeds that's yours to keep but going forward the rate of grown stock that you'll accrue on that deposit will change and so that flexibility uh is is something that always existed because seeds were never actually fungible or liquid but it's something that could certainly be used to the benefit of beanstalk in this instance so was frankly have been thinking that because the bean eath pool was losing out in size to being three curve and to some extent with good reason uh the it's clear that beanstalk will have to incentivize uh the bean eath pool more than the bean three curve pool in order to manage the the amount of exposure it has to three curve at any one time at least at current size uh meaning at scale uh harder to know uh what assets will will be most desirable to trade against beanstalk but beanstalk very clearly would prefer to trade against eth than to trade against three curve i think uh previously the thought of making them on par with one another with both being four seeds was that it was unclear how much liquidity would be attracted to being three curve on curve and the unit swap liquidity at the time the curve pool was added was still pretty low and so there wasn't a lot of uh you couldn't transact in volume and so the concept of having curve in large size was very attractive but then it became that the curve pool was so much larger that uh it probably would have been prudent for the dow at some point to vote to change that uh maybe to three seeds uh or increase the being eath pool to more than four seeds now this goes back to the question we were talking about before mod about what is like a a baseline and what's a reasonable amount of uh seeds at the maximum and stock at the maximum so for would would probably think it's interesting to launch with three seeds in beam three curve uh however the reality is that you do want there to be an incentive to be providing liquidity as opposed to just holding beans and so having two seeds versus three seeds not sure if that's enough uh probably probably could could there could be some modeling done or some thought done on on what the what the right incentive there is but frankly it's hard to know uh particularly given how the size and scale of beanstalk is likely to change over the next couple of months pretty quickly so yeah not sure what the right answer is on this front frankly within a gesh system and always let the market price it so eventually you know people will vote what they think is each pulled worth yes but not sure if that's really how you want the gate system to work and this goes back to like the governance question and vitalik has made the point that as soon as you have liquid governance tokens you allow somebody to basically make a wrapper such that the use of the token for the accrual of senior it's let's say can be separated from the use of the token for governance and i think that we perhaps we probably want to avoid making the use of the stock token effectively be a a bribe for being senioric in the way that current governance models work now obviously hard to know exactly how to prevent that from happening but letting the market price it is that's the goal but the question is is is it really the market pricing it if the thing the market is pricing is just bribing bribing the incentives that then create the effect like that's i don't know if that's the market pricing things as much as as much as we'd like it to be so the question is how to create something that's more market neutral uh than than that hard to say uh voting is is the best vote stock-based voting or the weighted voting is probably without a doubt the best solution but the question is what are people voting on uh and how are people voting so there's a lot of really interesting open questions on the governance front uh that that really should be more closely analyzed and the hope is after replant in addition to working on getting a bean eat pool live pretty quickly uh moving back to on train governance that's like the big that's the big project after replant and uh answering all of these questions collectively and coming up with things that that are are logically coherent uh and and sufficient given the nature of the problem being stuck that's trying to solve it's not going to be trivial right and we want to we want to try to do it in a really permissionless way where where there isn't we don't want an economics committee saying what assets should be approved and [ __ ] like that like ugh you know it makes me want to puke so how do how do we how do we stay away from that and create real market neutrality that's the question that is a good question and i guess anything that you want the market to price that has to come with size uh if you don't have a representative um or even a process to get that what's right you don't get really a market price yeah and you know this isn't a great comment but the thing that makes uniswap so lovely is that the constant product formula is really market neutral it's totally neutral and has no bias to it so the question is how can we in a similar way create uh some sort of very neutral way for people to participate in the white listing process manage the risk of the white list participate in the oracle process manage the risk of the oracle like these are very complicated questions to get right i agree what other things do you think would would be uh put in in there so we're talking about how how much does it help with peg that would be one i guess volatility is one decentralization is another and then maybe the risk of the asset is there can you think of other things i guess you said well historical as well what is the purpose right so in general what what beans are is is a great asset to trade against uh they're a great liquidity provider and potentially a great medium of exchange because of the interest that they bear now beanstalk in order to make sure that there's consistent value for beans needs to attract liquidity now beanstalk would prefer to have decentralized liquidity with a stable price right such that there's no exogenous effect on the beanstalk uh the liquidity available for beans so ironically and this is kind of the point what does beanstalk really want it wants beanstalk it wants beans so everybody wants beets everyone wants a decentralized stable asset so instead beanstalk has to choose from all the other potential assets and so what actually is there there's ethereum which is the most decentralized but very unstable and then you have other assets like usdc and usdt that are heavily centralized but very stable and then you have i mean you have you have assets that are some combination of decentralized and stable or unstable or and that's kind of all of d5 now what is curve token just as an example the ownership of curve is somewhat distributed but not greatly distributed or convex similarly like not not super distributed but is it decentralized is it not decentralized what does that actually mean at the protocol by protocol level how to weigh that against the fact that their price uh is also very volatile their prices are are highly correlated to the price of ethereum you could make the argument they're just beta two ethereum in a large way so uh it's sort of like you're not getting any sort of hedge to the price movements of ethereum so beanstalk really probably wants a lot of stable assets and then a lot of decentralized assets and it's hard to manage the stability and decentralization curve particularly at scale so you take an asset like l usd l usd is decentralized permissionless uh and price stable and has done very well very well uh during the the recent collapse but the issue is the supply of lusd is limited by the supply of ethereum and in practice the ethereum that uh is providing the liquidity to the liquidy troves at the margin would just otherwise be providing liquidity against beanstalk at scale so the the question is is that really creating more stability given that the liquidity would likely drain in terms of size when eats draws down anyways like what is it to have to have good liquidity against beings and this is a problem that at scale is really hard to answer so at the this this is one of the reasons why at some point beanstalk does just grow so big that it becomes the main uh liquidity hub or place where transactions happen in d5 because it's just so much bigger than all the other assets right everyone else wants beans a la how beanstalk wants beans and therefore at some point beanstalk does quickly become to be the center of it all or at least that's that's what if you play this out is how how it would seem seeing things work out and then quickly you need to think about well beans are the main medium of exchange and other assets like curve and convex start to derive their value from trading against beans well then obviously them being included in the gauge system is a major boon for their value and so how do we make sure that that's not that is that maybe not instead of is not that is that it is working to the benefit of beanstalk net net and that's very hard to to evaluate what that is so yeah no don't have any sort of like this is what has to happen this is what beanstalk needs it's more like there's a lot of things that beanstalk wants and uh they all come with trade-offs so we have to collectively figure out a process for evaluating these trade-offs making decisions coming up with the processes in case the risk associated with any of these decisions is realized and how to mitigate that as much as possible in a market neutral fashion yeah and and this brings us back as well to the other discussion of what happens if being beanstalk outgrows the the house itself jww asks um once we add new pools are there going to be any charges for switching between the pools for under android assets so don't think that you'll be able to convert uh unripe being three curve to unripe being eth uh it could be done this was something that i think was discussed either in the dow meeting last week or in class last week uh but would would be a significant additional complexity that would uh likely push back how long it would take to roll out the pool and so that's something that the dao would have to decide on whether to add or not in order under the current plan i guess you would call it uh in order to go from being three curve to bean eat you would have to take a haircut okay okay so you're saying that if the plan would do that then it's going to be that the other pool basically you're switching it's not like you're going from because the other pools won't support unripe as well so you can't go that's the that's the current plan now upon this discussion and let's just be on let's let's be frank we get we have the benefit of seeing real data right so if over the month where this is being developed it seems like the barn raise is going very slowly nothing is happening and there's a benefit in me allowing everyone to move out from being three curve to being eth and all the liquidity is unripe that's sort of a different thing than if over time the amount of unripe liquidity relative to the total liquidity decreases so i think that will be one that we have to evaluate how much what the benefit is in practice and it's it's obviously going to add some significant uh significant uh dev time if if we want to make everything convertible uh particularly these unripe assets which are pretty sophisticated okay so the answer is possible but haven't been discussed yet and by having been discussed we haven't already haven't waited the advantage or the pros and cons for that given the complexity of having something like that done all right austin asks in general does convert what has to be true for a depositor to be able to convert from one pool to the other it has you know don't as far as i'm aware and prove this feel free to correct me if i'm wrong here but this isn't necessarily finalized so in a perfect world if people are providing bean eath liquidity and they want to change their exposure to being three curve they should be able to do that now making the question of stock loss in doing so is a little bit more interesting now the reason it's interesting is because you'll always be able to complete one half of the convert without a loss of stock due to generalized convert right if the price is too high you can always convert deposited beans into deposited lp tokens and if the price is too low you can always convert deposited lp tokens to deposited beans but the question is if we're going to allow in theory like a two leg swap where you're going deposited lp to depositor bean and then back to deposited lp well whether or not that should be allowed at the protocol level in all cases only in the instance where the price in the pool that you're converting from is lower uh or higher like further from peg than the price that you're converting to on the other hand maybe as we're we're talking here that people want to change their being ethic being three curve exposure to being exposure and are willing to pay a penalty to do so it kind of makes sense that beanstalk should allow people to do that uh but but the question is and i i haven't run through the math myself so i haven't played through it like what are people actually being paid to do if that makes sense so what stock is being gained or lost for these conversions and it's important that beanstalk isn't paying people to make a market in an inefficient way but at the same time if we go back to market neutral we don't want beanstalk paying people to be buying usdt or buying three curve if it's collapsing so hard to hard to have a solid answer for you at the moment okay but in general for you to be able to convert you'll have to convert from a pool with a higher price than the other one that converting to this is like the general rule right that would make a lot of sense yes now we're going to restart with one pool so this rule isn't explicitly defined but yes rg asks of the publias are participating in the binaries most certainly montana asks is the tracker in the room with us right now so the tractor we just found out about traktor uh i you know there's no real i mean it's kind of just a meme which is that the tractor is the industrialization of the farm so the concept is that there's all these features that ultimately there should be tooling and automation added on top of to make farming on the bean farm much easier so we were having a conversation with silo chad and we we got memed the tractor pretty hard and we were hit with the you really haven't heard about the tractor so um we were totally out of the loop and now everyone is in the loop yeah i mean i was you know um off as as you know and when i saw it on twitter i i had four more although i wanted to just come back and see what's happening okay i think we're at the end of the of the uh town hall chat but probably i wanna i wanna follow up on our governance discussion with maybe one more question um and and now i i don't really expect an answer this morning benji's question real quick which is just whether or not uh you can go from three curve to bean and to eat lp with no haircut and no the the point is that you won't be able to do that and and benji follow up if that well i guess that answers it well i think uh benji are you asking about the non unripe lp form or the unripe lp form of bean 3 curve because you can't go from the unripe lp token which is you know kind of the vesting bean 3 curve token to then uh being three curve that is where you take the haircut the unripe lp token is its own unique token and the way to convert from unripe lp to being three curve is to take the haircut so you cannot go from unripe lp to being eth lp without taking a haircut but you can go like one you could theoretically at some point go from three curve to bean to beneath lp without the unriped version okay i think i think it's clear but maybe he is a bit disappointed rg asks what happens when all debt is paid do all newmans go to the silo so yes as beanstalk is implemented if it has no outstanding debt all mints go to the silo now the under the new the way the soil works before the the attack it's unlikely that the debt ever goes to zero because because there's always soil and as debt gets paid off the soil becomes more attractive now the one improvement that we hope to make to being stock before the replan is that the soil and the amount of soil available when the price is above one uh over a season uh the amount of soil available actually changes based on the debt level so that's an additional toggle that bean stock can use or when it has a high debt level it tries to decrease the debt level more but on the opposite end when the price is when the debt level is is lower beanstalk should be willing to issue more debt such that it's unlikely that the pod rate ever hits zero okay i think deckers on eurovirus are maybe typing a question all right we'll take the last question and maybe we'll we're almost idea on the hour all right when when being tattoo we don't know if there's one already i'm jewish we don't do tattoos but maybe uh maybe uh one of the other two publish can be compelled okay last last question given that we're starting with just a curve pool what's the relationship between the price and the data in terms of painting so this is uh i don't know if breen is is available uh but brian has been doing some great work on this and maybe he can i'll just tag him there and he can drop some uh he's been putting together some nice research there which uh you know we we would encourage you to check out yeah all right i think we'll we'll end uh class here published thank you very much really enjoyed you know to this class on the conversation in general yeah this was great and uh you know hope to continue the governance conversation next class or maybe even have more conversations more regularly because this is like a main focus that we all need to figure out and the questions you raised about juno and i saw another dow recently reneged on a saft um and then the soul ending these are these are real questions that need to be very clear very clear what beanstalk is expected behavior and what's not so this is all we're all going to figure it out together gang this is all this we're very excited about the opportunity to figure it out sure thing thank you publis see you next week