Beanstalk University Class #35

July 19, 2022

0:00 Intro • 1:23 The field giving bonds other than zero coupon bonds • 7:00 Any Trail of Bits Updates? • 7:50 What would banks built on top of Beanstalk look like? • 15:07 How can we protect Beanstalk from being over leveraged? • 22:00 Any Root updates? • 23:25 What are the chances there is no demand for Pods? • 24:45 Changes to the Temperature • 28:50 Can the Barn Raise raise more than $77 Million • 30:55 Publius’ thoughts on Seraph • 36:25 General governance discussion • 39:55 Closing statements

Beanstalk University


What do you think about the field issuing bonds other than zero coupon bonds?

  • There have been other stablecoin protocols based on seignorage using zero coupon bonds
  • The difference is that Beanstalk's bonds are First In First Out, whereas in other protocols issued bonds which were fungible so there was no advantage to buying early
  • Haven't really thought about Beanstalk issuing other types of bonds, but probably not because it would diminish the effect of lending Beans to Beanstalk because as currently constructed the Beans are completely removed from the supply. If there was some promise to pay Beans continuously, that only temporarily removes Beans from the supply.
  • There's nothing wrong with expiry if the market accepts it, but there is something to be said for Beanstalk never defaulting on its debt.

Any Trail of Bits Updates?

  • Not yet. As soon as we have it, we will make sure it is published. We are expecting it by Thursday.

Could a bank be built on Beanstalk where collateral deposited to the Silo could be used to make loans and influence the money supply?

  • Technically, the increase in the money supply via credit from banks is not the same as money.
  • Banks capture the profit from lending, as opposed to the seignorage shared by all Silo members.
  • It wouldn't make sense for Beanstalk to facilitate this business model.
  • Have to think more deeply about it.

How can we protect BEAN from being over leveraged once derivative markets are built on top of Beanstalk?

  • With a low A parameter.
  • Beanstalk needs to welcome volatility and oscillation above and below peg so that leveraged exposure is unattractive.
  • Convertability invites leverage, as in the case of UST where the price would never go above $1 (because you could always mint for $1 of value). This made it easy to short UST and long LUNA.
  • Effective incentives will increase long term stability.

Any Root updates?

  • Expect to hear something next week.

What are the chances there is no demand for Pods?

  • It's hard to evaluate.
  • Before the hack, it seemed temperature was mispriced. It was likely way too high.
  • It will still be a very high interest rate.
  • Hard to speculate on whether it is high enough for people to want to get to the back of the pod line after accounting for fertilizer, but we should find out pretty quickly.

Should the temperature change faster when there is BEAN price volatility, in order to minimize volatility?

  • Beanstalk is designed to slowly change the temperature so that there is an opportunity for people to buy BEAN above peg or sell BEAN below peg if they choose to do that.
  • Beanstalk doesn't shy away from volatility in any capacity, and this includes how it changes the weather.
  • The way that Beanstalk would enter in a death spiral would be if it can't attract creditors at any price. This would happen if the debt level was too high. You don't want the temperature to increase so fast that it issues soil at too high an interest rate and causes the pod rate to increase faster than necessary.
  • Beanstalk makes the tradeoff of accepting higher volatility to minimize the chances of a death spiral.

Can the Barn Raise raise more than $77 Million?

  • No, there is only 77 million units of fertilizer available.

Publius’ thoughts on Seraph

  • Unclear what the right way to approach the return to fully permissionless on-chain governance, which is everyone's goal.
  • Seraph might be something we should integrate in the near future to minimize the risks of on-chain governance.
  • We're big fans of Halborn and we would like to engage with them about a retainer for ongoing audits.
  • They will be on a call with the DAO on Thursday, and hopefully people bring good questions.

How do Ethereum and other networks run their governance?

  • With proof of work blockchains, it's a matter of which version of the software people are running. Differences can result in miners running different versions and causing forks.
  • With proof of stake, there is one chain and no forks because there is a risk of slashing.
    • Might be possible to clone the state to create a new chain, but all the exogenous value would remain on the main chain.
    • So a sufficiently bootstrapped PoS network would be resistant to this.


that's good it's going to be quite a busy few days and weeks let's say to the replant yes we'll need lots of energy so i'm glad it works out that way sure thing right welcome um everyone uh to class before we start off uh i just wanna uh announcer let everyone know that hal burn who we're one of our auditors uh are going to be uh they're gonna join us uh in this week's uh down meeting that's on thursday uh and they'll present uh their products serif is supposed to be like a third party let's say um um auditor that checks you know any any commitments or any updates that are gonna happen on chain um in the announcement channel you'll find uh their pitch deck basically you know uh summarizing what uh what setup is and what uh the advantages of it are um feel free to read it and join uh join down meeting and you can ask them questions directly and probably just add anything else if i if i missed missed anything okay um let's let's start class um anyone with any questions uh feel free to drop them in the town hall chat otherwise um we can we can start i can start with a question of mine so publish right now the field um issues um zero coupon uh bonds um and we know that you know previous uh let's say iterations um of of bond systems or protocols issued some sort of you know different types of of bones let's see what what do you think about the field issuing um you know other types of bonds other than zero coupon bonds um in parallel two to zero coupon bonds as well so one idea could be that it can issue let's say you know a bond that expires uh within you know three months or six months uh at an interest rate that is higher than you know what the field typically issues uh for zero coupon bonds uh but comes with the risk of you know expiring if if demand for beans don't catch up during that period of time so first you know there have been other uh stable point protocols that have been based off of the senior insurance models that have uh zero coupon bonds uh the main difference between beanstalk and those models on the dead side is that those bonds are not fungible not paripastu and instead are first in first out so whereas uh other implementations of zero coupon bonds where the there's either a bidding mechanism or somehow you're locking in your return uh at the time of purchase uh the the main issue is that what you're purchasing is not or is fungible uh so there's no advantage to buying early uh now with regards to your question about should beanstalk offer non-zero coupon bonds or offer some sort of yield uh probably not would be my thought although i haven't really thought thought about this at all uh but the concept is that the the yield for holding beans uh typically comes from the silo whereas the yield for the field comes from burning the beans and if the the assets in the field were owed some sort of continued interest that would to some extent uh diminish the effect of lending beans to beanstalk as it's currently constructed because currently you the beans are permanently removed from the supply and so if now there's some promise to pay beans continuously that only temporarily removes beans from the supply and that does significantly change beanstalk's ability to uh maintain peg in theory so i wouldn't think that the the commitment to pay beans particularly newly minted beans at specific points in time that would be something to avoid uh to you'd certainly want to avoid at the protocol level what about another another pod line um that basically then you know you're cutting off the line but at the risk of it expiring at a certain time period so it's not it's not like current bonds where you know um the the they don't expire so to be something like you know buy buy this bond um separate from the coupon now you're talking about the fact that the bonds never expire you're now saying some sort of bond that does expire and see if beanstalk can get away with lending or borrowing funds is showing debt that expires now i mean in theory there's nothing wrong with it if the market will demand it but when it comes to the credit worthiness of beanstalk there is something to be said for the protocol never defaulting on pods and pods expiring is in practice uh some sort of default so would think that that probably wouldn't help the credit of being stuck but then again it doesn't really have to do with the fifo zero coupon bonds that never expire but uh separately yeah i mean you know there's there's something to be said for and i would just take this opportunity to do so uh that the fact that there's this recapitalization and now some pods and they're placed in line are being pushed back because of the obligation from beanstalk to pay fertilizer uh i think going forward that's something that we collectively should still try to avoid uh you know should avoid at most costs uh in the sense that you don't really want to be constantly degrading the value of the pods by pushing them back and what at what bean supply they'll get paid back so you don't i think there was obviously exigent circumstances that the dow collectively decided to uh instead of a haircut of pods uh pay them back over a longer period of time uh or over a longer period of supply increase might be an accurate way of saying it but in general i think collectively we we should probably still stay away from continuing to do that particularly uh in normal circumstances so probably wouldn't be wouldn't wouldn't think that that makes sense given the effect on the credit of beanstalk and uh its relationship to creditors as well as uh as well as that okay we have a question from harry smith is uh he asks did we get the final turf bits audit uh report uh not yet uh as soon as you uh as soon as we have it we will pass it along and make sure that it's published uh the 10 business days i think is on thursday so the expectation is that we will have it by then uh and you know assuming we get it by thursday uh and that there's there's no problems in the report uh which we don't expect there to be at this point then it will be uh all systems go all right my next question may be a bit of a long one let's see if i can first of all articulate it well and and then summarize it as well i've been thinking a bit about um how fractional banking systems uh uh work um and and to summarize uh how how that works it basically um increases the money supply in an economy um through credit uh and that's basically you know known as the money multiplier so let's say the central bank introduces you know ten dollars to a bank depending on the fraction that it's required uh or depending on the amount that is required uh to keep in this reserves um the extra amount gets added into the economy and that you know multiplies the the amount of uh money that's this in the economy so here are my here are my thoughts well here's my question what if we have banks uh built on top of beanstalk so let's let's call this the farmer's bank and the way that the farmers bank would work is if it has if that bank has 100 beans um in it um that bank would issue you know um meant let's say 100 other tokens one to one for those beans so it has 100 beans it would then meant let's say red 100 red beans and and red beans are white listed in the silo um so you know the silo accepts those banks and and accepts you know their tokens in it so 100 beans you have 100 red beans and the 100 red beans are in the silo a cloning you know senior age or the or the or the interest rate uh that's that's that's generated by the silo the the the farmer's bank then is able to lend uh those you know 100 beans that it has you know um since you know it's free now to do whatever it wants uh to do with it at whatever interest rate that it chooses uh uh uh how how how would that work so let's say now there is there is a demand for beans um and you know the price of being is above above one what would happen then is that the bank would lend uh beans at a low interest rate um so you know uh if you want if you want beans uh because you know there is a lot of demand for beans you would go there and then you suddenly would have extra 100 beans since you know the red beans are on the silo but the 100 beans are available for anyone to borrow and that would then naturally increases uh the supply uh uh of beans or you know in fact it will multiply depending on how much you're allowing uh uh means to be out let's say then you know um the the demand for beans drops uh what you would what would the bank do then is it would increase the interest rate uh for those you know beans that are already lent and that would naturally force people to you know take out those beans and return their loans effectively reducing the supply the supply of uh of means so what we're saying is you know with the same amount of beans that are already existing with that bank uh depending on the interest rate you know which which you're increasing or decreasing it is whether whether there is a high demand or loading and you're increasing the supply or reducing the supply of beans in the market does this make sense or did i lose you so there's a lot to be said here i would say the first thing is that technically the the increase in the money supply via credit from banks uh is is not the same thing as money right and in your example red beans are not the same as beans uh now i guess if if one red bean is always redeemable at all times for one being you could make the argument that it is is a being but it's still not exactly a bean and so the concept is now the increase in supply of red beans uh goes to the profit associated with the increase in supply of red beans goes to the bank as opposed to and then the bank can pass on some of that to the depositors but the concept is the bank is is taking the profit here now normally uh when there's an increase in demand for beans there is a res the result is an increase in the b in price which bean stock has to uh increase the supply in order to return the equilibrium price to a dollar and the the white listing of red beans in the silo would effectively facilitate the transfer of the senior edge from stockholders to uh this bank or whoever whoever owns the the underlying collateral of the red bean and that wouldn't really make sense to do so i think as a starting point it's hard to think about this as you know as a as a viable business model uh particularly i mean there's a lot i could say on on this front but i think just to answer your question explicitly it probably wouldn't it probably wouldn't make sense for the dow to white list the red beans and facilitate this business model because it's a great gig if you can get it if you're this bank and you're now collecting the difference between the silo yield and this yield that you're you're you're offering depositors but why would you as a depositor accept that you know and why would some why would why would stockholders accept that either great questions so red beans um there are multiple ways i guess to design this but let's let's take the most conservative one and say that you know a red bean is always backed by one bean uh now what happens you know when the bank is lending those beans um to to to others what is it backed by so you back that by collateral it just happens to be what are you backing it um or what are you what at what rate are you rending it at so for every red bean that's in the silo it is either backed by an actual bean but it's still with the bank or by a collateral instead of the of the bean that was lent out so why would stockholders want this because at the end of the day it is an actual beam or worth of a beam that's in the cycle but what you did there is the the instead of that money being or instead of those beams being in the silo you are now you know allowing it to go out of the market at a low at a low interest rate uh when the demand for beans are high so you're suddenly able to increase or multiply you know uh the bean supply when you want to increase bean supply that's when there is demand for beans are high and then when you know demands for beans drop um you increase those interest rate and then you reduce the the supply of beans uh because people will want to return it otherwise you're gonna be paying that interest it's very interesting it's a very interesting point and i would have to think uh i'd have to think more deeply on it before commenting okay my last question um goes back to something that we discussed uh a few weeks ago uh and that's leverage um as as derivative markets get built on top of beanstalk and and people will be allowed to long and and short uh beans um the question that i want to think of is you know how do we protect beanstalk from leverage um throughout history as you know during recessions we see that you know the big culprit is typically how leveraged or how leveled the economy is and the higher the leverage the the more dangerous the economy or the recession the severity of it gets and that's because you know as prices drop people get liquidated prices drop further then further people get liquidated and you enter into this you know cycle or loop uh that you're in it the way modern economies or economies today control this is you know by regulation you regulate the markets and you set a limit to how much you know markets can be can be leveraged this is something that is not really possible in d5 given that you don't have a centralized authority there is no regulation uh or way for you to control that my question is and i'm not sure there's an answer here once we have derivative markets built on top of beanstalk how can we protect bean stock from over beverage or from you know a market that's too leveraged great question so the the punch line is with a low a parameter uh the more sophisticated answer is that if you think about what the trade was associated with ust it was really to short ust right you're borrowing you're you're holding you're buying ust and you're you're you're lending it out uh or borrowing it because it was subsidized but the concept is in some capacity uh you're holding the ust and then selling the usp to take on leverage and it was really to take on leverage of the luna price that was what most people were doing for the trade but the concept is that that was a really safe trade when it comes to and i'm not talking about safe in general we saw the system played out but when it comes to shorting ust uh and that was also something that facilitated the unwinding separate for people were going store ust and long luna so the system was highly leveraged as you were saying when people uh got short the system during the unwind this also played out the concept is it's very attractive to short a stable coin that is convertible at its peak and if you have convertibility uh what that really means is the price has a hard peg it's never going to go above whatever it's convertible at so no one's going to pay a dollar in one cent uh if you can convert and mint them at the price so why would you buy it a dollar one if you can mint mint the stable point for a dollar and the result is that people could comfortably borrow and either go long luna or uh store ust in whatever capacity but long other assets if they wanted to but certainly short ust uh it was very attractive to do that because the price by definition couldn't go up uh whereas in the case of beanstalk the bean price oscillates above and below a dollar and as we all know when there is uh not enough supply and excess demand the bean price goes higher and in short the the upside and downside volatility can minimize the amount of derivatives exposure that is unhealthy on the positive and negative side when it comes to being price movement so the short answer is beanstalk needs to welcome volatility and uh constant oscillations above and below the peg need to be the norm unexpected as opposed to a hard tag maintained by convertibility okay am i understanding this correctly when we say that a way i guess to protect against um that's that's made probably not accurate i was gonna say that you would expect that short positions would counter you know an effect of how much uh loan positions you have to kind kind of have a balance but you can't really regulate how much you know how much how much leverage is in the system at the end so you just want to accept it or you have to accept it you cannot you cannot regulate it in any capacity other than the market finding an equilibrium based on the volatility that exists in the underlying some ways that i can think of and i don't think these are good ideas but but that's and over time the bean stock interest rates in the silo sorry start interrupt but that would be the other thing that people are optimizing around yeah this this was going to be my my point which is you know discouraging leverage by reducing uh demand or sorry uh interest for for that's giving out you know or the senior rich speed up but i don't see how that really works you know or how can how can we do this uh to because reducing scenarios you're basically you know inhibiting inhibiting demand so you can't meet any demand anymore um but at the end of the day at the end of the day when you have liquidity on beanstalk assets right let's say there's a fungible silo bean there's nothing to prevent that from being levered up or levered short in a money market or in a cdp so at the end of the day this is the whole concept of beanstalk is that if beans are to become a base primitive that people build on top of because of their relative stability and positive carry you have to be able to take out leverage against it so how does the system regulate uh it has to regulate itself uh through market forces which is kind of the the elegance of a free market that we're all we're all subscribing to here so if if the incentives are sufficiently strong that should that should create the stability over over slightly longer periods of time than convertibility offers yeah i agree all right these these are uh the questions that i had um i don't see other questions uh from others so if others you know had any questions or had any follow-up questions what we've discussed please feel free to drop them in the town hall chat add smith asks any any updates on root i can i can answer that by saying we'll probably have something next week but mr manifold feel free to come in if you want to share more details otherwise expect expect to hear something next week i see someone typing so wait we'll wait for that question the other thing given building on the on the idea of the the second question which is you know if you have a bank built on top of bean stock is you allow lending um at but of course at variable rates these rates do control the supply um um um of you know of potentially of what what total supply of beans that will be out there but and if in in effect or in principle it allows lending so people can you know instead of buying beans they can borrow beans uh maybe that will also facilitate other things or other other markets as well cj discord asks what is the chance that there is a lack of demand for pods or debt and will this make it difficult to get back to bank uh it's hard to evaluate what are the chances that there's a lack of demand for pods uh on the one hand prior to the attack pod seemed to be or the temperature i should say seem to have been uh heavily mispriced uh way too high uh but that's you know one of the things about beanstalk is that it changes the temperature very slowly uh such that it's still like a 52x or something like that 58x i don't remember what what it was prior to the attack but the concept is that's still going to be a very high interest rate uh whether people find that attractive to get to the back of a pod line and the fertilizer uh very hard to speculate on that but the concept is i think we'll find out very shortly this is this goes back to like you know the market will decide i can i can build up on this question uh and that's about about the temperature um on controller how is it increasing decrease what do we think about um and maybe maybe we had these discussions months ago uh so we might be recycling some of these thoughts again what what if we do uh something in the sense that um when there is a change in the price of beam the field would increase the the the temperature once by a certain amount and then it goes back to the plus three minus one so let's say you know the the price of beans are one and and the temperature is at let's say you know five thousand um if the price of bean goes from from one to ninety five or ninety cents uh it would go it would go from five thousand in one season to six thousand five hundred let's see and and then you know it would go plus or minus three percent one percent as soon as someone buys a a bit of of pods and it goes to let's say 95 cents it would drop down again for one time by a big amount and then goes back again to one and three percent so what you're saying is you know there's going to be a one-time big change and that's only going to be offered you know for a certain amount and it goes away uh and it doesn't continue in that sense does first of all does this make sense and then what what do you think about that i understand the question uh in short what you're proposing is that the temperature moves faster when there is higher being priced volatility in order to minimize bean price volatility and in general the way beanstalk works is that it is designed to slowly change the temperature as opposed to quickly such that there is an opportunity for people that want to buy uh beans above significantly above the peg or sell being significantly below the peg have for whatever reason have the opportunity to do so and beanstalk doesn't shy away from volatility in any capacity and this includes how it changes the weather so when you think about how does beanstalk enter a death spiral uh and it when it can't find any creditors at any price uh the way is that uh the amount of debt that it has is too high and the the issue that you want to avoid is being stuck having to pay too high of an a an interest rate a temperature such that the pond line starts to grow too fast and the padre gets out of hand and the only way for that to really happen is if beanstalk increases the temperature too quickly right if beanstalk doesn't increase the temperature quickly at all well then it's not going to overpay and increase the pod rate too much whereas if it's going to increase the temperature very quickly it is at risk of overpaying and uh issuing too many pods and getting itself in this negative feedback loop we're at a much higher risk of entering that negative feedback loop so beanstalk makes the explicit tradeoff of instead of moving the temperature faster to minimize bean price volatility it is comfortable with the bean price volatility uh in order to minimize the chances that it overpays for pods uh in order to minimize volatility and in doing so uh enter some sort of death spiral because as you know in the scenario laid out you laid out the weather goes from 5000 to 6500 and then what if the price goes even lower now does it go from 6 500 to 10 000 what about another season does it go to 20 000 like very quickly you can get yourself into trouble and even if it's a day or two days or three days uh markets tend to be vicious uh when those types of mechanisms exist in uh making sure that those types of uh feedback loops are entered so the goal is for beanstalk to be resistant to that feedback loop and the way it does that is trading off convertibility and and accepting the volatility in the bean price okay we have a question uh that asks what happens if the bond raise raises more liquidity than what was in the bm3 curve pool pre-exploit so there's only 77 million for sold such that that is impossible uh so that that shouldn't happen and just to clarify the 77 million includes all of the pools not not just the bm3 curve oh yeah good catch i see bernoulli been typing an old an old old farmer how about that right anti-fragility or fragility feels like a good framework here entropagility means more volatility in steady state but less exposure to extreme volatility events i guess that's a comment to what you you were discussing about controlling the temperature i would agree and it's it's trading off extreme volatility like a full collapse to zero uh with maybe downside volatility to ten cents or two cents but never to zero it will always you know if it's if it's sufficiently anti-reflexive the bean price should always return to its peg the question is what is an acceptable amount of volatility such that there's utility you can't wait for restart i guess you know all farmers looking forward to that okay we're at the end of the town hall questions if anyone else has other questions please feel free to drop them otherwise we'll give it a minute or two do you want to take this time uh publish maybe and discuss a little bit about seraph before the dao meeting or would you rather that we have this later well i think there was a lot said in the last a significant amount said in the last dow meeting on thursday and unclear from our perspective on what the right thing to do is when it comes to managing the permissionlessness of governance with uh with security and seraf might be interesting as a first step or an intermediate step towards fully permissionless on-chain governance once again which is what everyone's goal is so i think it's exciting that the hal born team uh is presenting this the day out hopefully people come and ask you know intelligent questions on how things will work and uh what levels of permissionless there are and anything else that is relevant and uh hopefully that gives everyone a good sense of whether this is the type of product that we want to integrate into the contracts in the near future in order to minimize the risk associated with moving back to on-chain governance so that's that's the main question on the surf front uh we're big fans of the hal bourne team they had uh they just announced a big series a which is pretty cool uh and uh one thing that we hope to do is to engage them in some sort of continuous retainer uh such that they can work on beanstalk and beanstalk dow related projects continuously so uh that'll be on that'll be on thursday that they're talking about seraph and i guess in general if people have other questions about their relationship with beanstalk they can probably answer that too but uh the main focus on thursday is uh is about syraps so they're going to be talking to the dow and answering any questions on thursday do you know if the beanstalk dao or the bca members would have you know unilateral ability or authority to rescind uh set ups uh you know control at any point or that's not possible uh yes it could be how doesn't that be um the purpose of it if someone controls you know being stuck then they just remove them well that's that's kind of the point right so it's a question of well what is who if you know with the super majority you could remove seraph then it still wouldn't have prevented an attack right so it's hard to know these really are the the substantive questions that i think they have decent answers for uh which they they claim that they will you know if you leave the keys with them meaning they are the ones you don't you don't introduce some sort of kill switch at the contract level where you can remove seraph uh without sarah's permission but what they will do is they will turn off seraph on their end and if you accept that they will do that and you know i think that's part of the contract that they'll sign obviously that's not related to permissionlessness this is kind of the whole point it's a question of what what are what is the dow comfortable with over a let's call it a one year period of time while things are moving back to on-chain governance the permissionless governance system is being tested how do people feel about another service having this uh you know this this control or partial control uh in a sense that they can prevent things from happening uh to the contract very specific things that can be explicitly defined uh that's it's up to the dow whether that's something that people are comfortable with uh if the goal is to do it over a short period of time not in perpetuity i think in perpetuity it's much less attractive but it is probably attractive as a an intermediate step can we have some form of a governance architecture that goes on like will have bcm members and those are the ones that can change code uh and then you have seraf as you know a back a backstop uh but then the dao would have another team that can remove or send the keys from seraph but can't change the beanstalk code so you'd have a team that you know can can push updates and then another team that can only revoke self's keys yes anything is possible and would just comment that that sounds like you know something like the first iteration of use of craft the goal is to move off of the bcm and back to on-chain governance and that's where syrap will be particularly helpful as an extra layer of protection so it is probably good to get that base integration up before we move back to on-chain governance collectively but i think you know step-by-step here right so this is why it's good to have them in front of everyone and everyone can ask the questions directly and hear what they have to say uh we don't we don't like to be middle men okay uh i'm not i'm not informed about governance in general or this i guess maybe not informed about many things um how how does ethereum and you know bitcoin and all of these other chains how how do they run their governance well proof of work blockchains it's simply a question of which software uh are the nodes with the majority of hash power running uh so that's if there's a fork there can be a fork because people are running different software and in a proof of stake blockchain there's only one chain with no fork because uh the you basically get slashed if you propose a shorter fork but in theory i guess you could try to replicate the whole the whole other state in another proof of stake chain not not i haven't thought exactly through how that would work in a four scenario all the way to be honest but uh the the difficulty is all of the exogenous value that you have uh represented on that proof of stake chain like usdc for example the uspc can only be honored on one of the chance you can copy the state of the proof of stake chain and start you know issue a different uh recreate the the chain but the concept is the value of the chain really comes from the the value of the other stuff that is on it and the consensus of the people that are using the chain to continue to recognize that particular chain as the main chain so it's it's a little bit of a catch 22 on where the value from the proof of stake system comes from but that's uh the hope of using a proof of stake system is that it's sufficiently bootstrapped such that uh it's resistant to that type of thing i i thought that this is how consensus or validation work but governance is done differently or separately am i i'm not understanding this correctly they're the they're one in the same thing in practice uh when it comes to the the layer one blockchain so uh a blockchain is different than smartcon okay i'll i'll continue maybe with a question let's say now ethereum wants to push an update how does that work who who who pushes it and then who how does it get approved well to be honest it'd be much better to have uh published 1703 up here i don't even is are they even here i don't know if they're here i'll give you my non-developer version of it which is that if there's an upgrade to the ethereum blockchain it depends whether it's a soft fork or a hard fork uh in the case of a hard fork it requires some sort of coordination between all of the miners to at once start to use a new piece of software whereas if it's a soft fork each of the nodes can upgrade to the software at any point that they choose so the distribution of that software and the election of the nodes to use that software is dependent on uh whether or not it's a hard fork or a software and whether that is a hard worker software depends on what what is the specific change for the blockchain that is being implemented okay thank you thank you for that answer all right i think no more questions from my side and none others are in the town hall chat so maybe you can call call it call it class here for now thank you publius for your time and see you next class thank you man take care