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Beanstalk University Class #38

Date
August 9, 2022
Timestamps
0:00 Introduction • 0:36 How is the protocol doing? • 8:38 When is the pod rate too high? • 16:17 Bidding system for soil • 19:23 Can an economy flourish that blacklists parts of it? • 24:40 When will we get a BEAN:ETH pool? • 25:56 What will be the liquidity pool after BEAN:ETH? • 27:14 Will Beanstalk become immutability? • 29:45 Why does Beanstalk mint new tokens? • 32:28 What is the relationship between Beanstalk Farm's contributors and Root? • 38:50 What is the difference between Pod rate and Temperature? • 39:40 Mistermanifold’s thoughts on Beanstalk Farm's contributors and Root. • 47:56 Discussing ways on reducing Beanstalk debt. • 50:43 What is Beanstalk Farms doing to protect itself from censorship? • 52:14 Is Beanstalk Farms/ Publius worried about anything they are seeing with the protocol? • 54:55 As more people move from centralized stablecoins to decentralized stablecoins. The decentralized stable coins cannot keep up with the higher demand. Does Beanstalk aim to fix this? • 58:08 Why not reward contributors more for their past work? • 58:52 Is there anything that can be done to push the price of BEAN above one? • 59:11 Why does Beanstalk mint BEANs? • 1:00:04 Can we get more guides on the website? • 1:00:26 Updates on the BeaNFTs • 1:00:39 What about a BEAN:FRAX LP? • 1:01:50 When will the Beanstalk DEX launch? • 1:02:10 Making the Silo exclusive to only allow LP deposits • 1:04:30 Any concerns with the Ethereum merge? • 1:05:02 Farmers are using Silo/ FERT rewards to buy more FERT, this causes more sell pressure on BEANs. Was this intended? • 1:07:03 Will there be gauge on BEAN:3CRV? • 1:07:48 Closing statements
Type
Beanstalk University

Recordings

Notes

How is the protocol doing?

  • Most interesting question following Unpause is the new dynamic with the Fertilizer and what the interplay would be between Fertilizer and deposits, and the different debt issuances and their interest rates.
  • Too much demand for fertilizer might make it harder to maintain the peg, because demand for Fertilizer doesn’t require the purchase of Beans, whereas demand for soil does.
  • It has been encouraging to see enough demand for soil to see the price return to peg.
  • The liquidity grew very quickly from $28 million to $38 million, and has now settled down at about $36 million.
  • Still very early, we should have a lot more data in the coming weeks.
  • Even while still ramping up (only minting 75% of deltaB), it is good to see Beanstalk working to return to peg both above and below $1.

When is the pod rate too high?

  • It’s hard to know what the ultimate number is.
  • One thing that causes hyperinflation in fiat currencies is when the maturity of government debt approaches zero, and the debt and currency become nearly equivalent.
  • The fact that pods are zero-coupon bonds without a fixed expiry and there’s no date at which Beanstalk is required to pay them back means that Beanstalk has a little more leeway in terms of how far out the debt level can run because there is never any guaranteed increase of the supply at any given time.
  • Beanstalk can afford to be slower and steadier in its adjustments to the temperature because it doesn’t have any sort of overhanging debt that at some point needs to roll over.
  • It is very encouraging that Beanstalk has continued to issue debt through the barn raise and field.
  • Unclear what the maximum pod rate is, but the more interesting question is what temperature can be sustained, because a high temperature is what really causes the pod rate to run away.

Bidding system for soil

  • There is an idea to have the beginning of the season function as an auction for soil, where it starts at 0% and ends up at the current temperature.
  • Seems like a fine idea in order to minimize the temperature that Beanstalk is paying.
  • Not a fan of bids where people are locking up funds in advance, as that becomes more like some kind of a reserve.
  • Ramping up temperature at the beginning of the season seems like a great idea.

Can an economy flourish that has blacklisting risk in it?

  • One of the reasons specified in the white paper around the creation of Beanstalk is that using all of the primitives that exist at the moment is totally impractical if the currency you are using is centralized and censorable.
  • It doesn’t make sense to pay the premium to run on permissionless censorship resistant primitives if you’ve got a weakest link in your chain that is highly censorable.
  • We obviously know what it’s like seeing the money stolen from us and sent to Tornado, but the censorship is awful too.
  • We have to recognize that what we are working on isn’t considered friendly, so censorship should be expected. It’s horrible, but not surprising.
  • We need to stand up for open source code, privacy and free speech.

When will we get a BEAN:ETH pool?

  • Everyone agrees it is a high priority, if not the top priority. A couple weeks is too short, a couple months is probably too long.
  • Will be a Beanstalk native pool.

What will be the liquidity pool after BEAN:ETH?

  • LUSD is a wonderful primitive that is rent-free, decentralized, permissionless, and immutable. It doesn’t hold a hard peg at a dollar, so it wouldn’t be a good target to use for minting/deltaB, but it is an interesting option for people to provide liquidity against Beans.

Will Beanstalk become immutable?

  • In the short term, some things should be considered immutable in practice.
  • Still a lot of work to be done, and many improvements to be made still.

Why does Beanstalk mint new tokens?

  • Beanstalk optimizes around a stable Bean price with relatively low volatility and frequent peg crosses.

What is the relationship between Beanstalk Farm's contributors and Root?

  • It’s healthy for Beanstalk to have a mix of public and private contributions.
  • The hope is that there would be many businesses on top of Beanstalk, and we should encourage that activity and for contributors to the DAO to be involved in those businesses.
  • It’s an open question how much transparency is necessary, but we should work together to figure out what’s appropriate.
  • Beanstalk Farms has not funded Root or paid any Root contributors, but Root has contributed to Beanstalk by donating funds to pay for the Halborn retainer.

What is the difference between Pod rate and Temperature?

  • The pod rate is the pod debt relative to the Bean supply. The temperature is the interest rate on burning beans when the price is below $1.

What is Beanstalk Farms doing to protect itself from censorship?

  • The goal is to be decentralized at every layer of the stack.
  • Something that will have to happen over time, because there are a lot of problems to solve.

Is Beanstalk Farms/ Publius worried about anything they are seeing with the protocol?

  • In general, it’s been pretty smooth sailing. We can expect to see some additional downside volatility.
  • Been an encouraging few days. Nothing stands out as an immediate problem.

As more people move from centralized stablecoins to decentralized stablecoins. The decentralized stable coins cannot keep up with the higher demand. Does Beanstalk aim to fix this?

  • Beanstalk creates the economic basis for an alternate totally decentralized system, and the goal is to create tech to facilitate that.

Why not reward contributors more for their past work?

  • That is a question for the DAO.

Is there anything that can be done to push the price of BEAN above one so it can clear the pod line faster?

  • Demand for BEANs.
  • Printing too much will create a supply overhang and downside volatility, resulting in even more debt.

Updates on the BeaNFTs?

  • Probably have an update by the end of the week. The team is working on testing the attributes and rarity.

What about a BEAN:FRAX LP?

  • FRAX hasn’t shown any interested in working with us, and they are backed by USDC anyway. Not sure what the benefit would be.

Farmers are using Silo/ FERT rewards to buy more FERT, this causes more sell pressure on BEANs. Was this intended?

  • Nothing has been too surprising.
  • We have been pleasantly surprised that BEAN hasn’t fallen below $0.97.

Will there be gauge on BEAN:3CRV?

  • It’s not a priority, but it might be something to pursue in the not too distant future.

Transcript

how are you i'm doing well how's everything with you doing okay doing okay yeah we've had quite quite the four days since i'm pause i think uh we'll have a lot to to unpack and discuss uh in this class let's get to it all right we we already have some questions in the town hall but everyone else in the audience um you know if you have any questions whether you know you're new to be in stock or you want to discuss anything being stock related drop drop it in the town hall chat publius before taking questions i wanted to maybe dedicate some time just to discuss you know the overall performance of the protocol in the past four days we've had a lot of discussions before i'm pausing and you know we were thinking about all of all of all of the scenarios or all of these things uh uh that would happen and and in the past four days we saw the protocol you know uh performing uh with we we've unpaused at the price of bean which was slightly above a dollar uh we've had that empire period uh on how you know bean stock was minting we stabilized to a dollar uh today maybe we had some sort of a mini uh let's say uh that issuance or so and and and brought back we've seen the field coming action playing action uh you know at at let's say raids or padres that we've unseen before uh and then lastly we've seen the barn also an action you know uh it's seamlessly integrated within the protocol uh even though this whole barn raised idea is you know a new concept or or something new uh uh in being stuck what are your thoughts on the overall for this what what what did you see what you know what behaved uh as expected what was what was interesting to you well you did a really wonderful job of summarizing the past four days the most interesting question on our minds prior to the replant was about the interplay between fertilizer and deposits and the question around given the uniqueness of the two different debt issuances and their different interest rates no they would affect or what demand would look like for each of them after replant and in particular how demand for too much fertilizer compared to pods or soil uh perhaps could could hurt beanstalk's ability to maintain the tag because demand for fertilizer doesn't result in the purchasing of beans whereas demand for soil does so as you noted it it was very encouraging to see particularly over the past uh day or less than a day really the there be a significant amount of demand for soil and beanstalk be able to borrow enough beans from the market in order to return the bean price to a dollar and that that is varying so beyond that it was interesting to watch the liquidity very quickly grow from what the the 28 million or so that was deployed to 38 million now it settled down at 36 million but it it that was another interesting thing to watch over time hopefully in the next couple of days and weeks there will be a lot more helpful data that will be available to analyze and the reality is that this is still a very early early days post replant and there's a lot more that needs to play out in the market but it was certainly interesting uh and encouraging the the way that beanstalk between convert and demand for soil was able to incentivize the return to the peg both when the price was too high and when the price was too low and this is despite the the minting schedule for delta b continuing to ramp up so the fact that there isn't a 100 delta b yet i think that will will start tomorrow uh the the concept is that even at 75 percent today bean stock in its slow and steady fashion can can return the price to the pet now there's lots of interesting things to observe in the protocol and from an incentive perspective you know some of the things that are new or that the withdrawal freezes now the end of the current season and you know thinking about thinking out loud about the effectiveness or the efficiency of the soil market uh the ability to see that there is soil going to be available at the top of the sunrise and be able to withdraw beans from the silo uh into the top of the sunrise and then immediately so assuming that you have the ability to uh faster than the rest of the demand for soil you know there there's a question about efficiency there in terms of maybe it's better for there to be a one-season freeze such that you have ambiguity uh if you're withdrawing whether there will be soil the following season uh that that that's that's one potential efficiency to be gained in terms of making sure that soil is consumed in a in a way that beanstalk isn't both the real goal of soil is to ensure that there's demand for beans right so people are buying the beans in order to lend to beanstalk on the one hand there's not if people are going to withdraw their beams from the silo and sell them uh then beanstalk will need to incentivize uh enough enough demand for soil in order to clear all of that extra supply and dairy but the real question is around at the margin what happens so uh with regards to whether or not the the market for soil is more efficient or less efficient as a result just another thing to watch the goal is obviously to remove the withdrawal freeze entirely and therefore that sort of settles the the ultimate question here but it's just another data point worth watching in terms of how much uh any beans from the silo or withdrawn to then be immediately sewn that's sort of a that's just another data point to watch uh because at the margin unless the beans were going to be sold you know beanstalk would prefer for them to be left in the silo the incentive to do this will probably decrease over time as more grown stock approves but particularly with the earned beans there's always going to be that that incentive because of the the low amount of grown stock on top of the lack of growth so uh nothing nothing really to do about that per se but just talking out loud about some things that have been observed and other than that pretty pretty excited about the peg crosses thus far uh it's worth noting that because the price is no longer derived from the bean eat pool that the amount of peg classes is likely to be lower uh given that there used to be lots of pet crosses just from millionaire volatility so if if the price was within a couple bits of of the peg you could have multiple crosses without any trades in the bean pool because of volatility in the usdc eat pool whereas that's less likely to occur given the structure of the bean 3 curve pool so perhaps less crosses but this is this just means that collectively as a community we'll need to develop more sophisticated ways to evaluate uh deviations from the peg so perhaps a historical delta b uh or something like that which will better capture the volatility of the beam price so uh lots of different things to to think about as we move forward but those are just some uh some opening thoughts okay let's talk a little bit about uh the field and you know uh uh its ability let's say to to to create demand uh demand for beans through soil um the field is at uh at a pod rate of um close to 2500 uh the highest uh you know we've seen it we've seen it at and when when we started we started at even uh 3 000 uh a percent uh we've seen that drop uh quite quickly uh beginning and then it slightly went up as it attracted you know uh soil soil again at this very high rate we're seeing it you know seeing encouraging ability for it to continue to attract you know um um demand what debt is too high when is it too high what what do you think is you know what decides that now knows a lot why can't we go to ten thousand percent twenty thousand percent well this is sort of the ultimate question and at the end of the day there's nothing that says that an infinite pot rate isn't acceptable just look at the the rest of the implementations of uh fiat currencies at the moment where it seems like there's no amount of debt uh that that the people that are running the monetary system are concerned about uh it's hard to know what what the the debt level is that will would cause or uh will cause the implosion of a fiat currency so one i mean one thing and really just thinking out loud here one of the things that i heard recently on a podcast was that what ultimately leads to hyperinflation is that the average maturity of government debt approaches zero and in practice the the only way for the government to roll over the debt is to roll it over with a shorter maturity and the result is that over time all of the government issued debt trends towards having a maturity that is and government debt within maturity compared to government issued fiat currency they're effectively equivalent and so at the point where the maturity approaches to zero you have uh immediate onset hyperinflation because now all of the government issued debt becomes the exact same as the currency in the case of beanstalk that would be like if all of the pods suddenly became beans because of beanstalk's inability to in a cost-effective fashion roll over the pod now the fact that pods are zero coupon bonds without a fixed expiry and there's no date at which beanstalk is required to pay them back perhaps means that beanstalk has a little more leeway in terms of how uh far out the debt level can run because there's never any uh promise uh or guaranteed increase of of the supply at any given time and so therefore beanstalk can afford to be slower and steadier in its adjustments to the temperature uh because it doesn't have any sort of overhanging debt that at some point needs to roll over so that's that's just one thing to consider in all of this that's obviously not an answer as to what pod rate is too high uh we saw uh and i think what we continue to see is very encouraging where you had this artificial increase of the the pod rate as a result of the attack uh or the exploit the the fact that beanstalk continued to issue debt throughout the the barn raise demonstrated that the protocol was still viewed as credit worthy to some extent but ultimately the the the debt level of the system was was undefined at the during the the barn rays because it was unclear how much what what the bean supply would be at the time of the report whereas now it's very clear what the product is and it's a multiple of the maximum uh prior or close to it i think it peaked at like it was it beanstalk replanted a 3 000 which was just under double the maximum pod rate prior now beanstalk has a 2400 so about 50 higher than the the maximum prior so it's unclear what the the maximum pod rate that being stock can sustain is uh perhaps the more interesting question is what's the temperature that bean stock can sustain because a high temperature is really what causes the padre to run away and as we've started to observe already despite the fact that the market isn't fully up and running from a ui perspective so it's hard to see the curve uh there has been a significant amount of demand for pods at the end of the podline at uh i think that there was demand today at three and a half cents uh which implies a significantly lower uh temperature necessary temperature in order to clear the soil than there currently is so one of the things that we've been thinking about is perhaps try to how to try to incorporate some of the data from the pod place into the temperature such that beanstalk is approaching the the the optimal temperature implied by the the secondary market in order to clear the soil perhaps with some additional premium to ensure that the soil clears now the other observation to be made on the temperature is that it's okay in theory for the temperature to have reflexivity downward the problem as it's been discussed many times uh is that is reflexivity upward if you have the temperature that can explode upward that's how in a very short period of time you can have a runaway debt situation so beanstalk needs to raise the temperature slowly at the expense of downs being being downside price volatility so beanstalk is willing to trade off short-term downside being priced volatility in order to not have the pod rate uh become overly excessive but at the end of the day uh the it's it it is probably acceptable for beanstalk to have a temperature with downside reflexivity where the padre can come down faster than it currently is because that that is unlikely to hurt the incentive structure around uh lending to the protocol in an efficient fashion but again at the trade-off of perhaps uh additional bean price volatility so that's something to consider but given the the goal of the protocols to uh ensure its credit worthiness perhaps uh having some sort of downside reflexivity uh in the in the temperature might be could be helpful for the long-term sustainability of the metal i i agree especially there were there were at some some points where the temp uh the soil wasn't uh let's say uh sold immediately or it took it a few more minutes of course you know still still great uh but maybe uh with a lower with a lower temperature it could have waited maybe an hour or slightly longer so it would save the protocol maybe on on that but as you said comes with a little bit more of price volatility that are in it this was a question i was going to ask later but maybe since we're already talking about it we might bring it up now and it's a discussion that has been in the economics channel and i think it's a build up on an idea that we you know discussed uh some time ago which was a bidding system uh for soil you know when when soil is like selling out um i think more or less the idea is is currently the same maybe there are more details on how to run this you know auction uh we pre i would say i'll just say the current one because i think you will you and i always remember the the one before so the thinking is or what the guys are thinking uh as and i'm summarized the chat the chat on the channel is in the first five minutes there will be a linear auction where the temperature would go from zero all the way to you know the current temperature and then anyone the first person to bid for the soil you know gets the soil after five minutes it continues you know as uh as usual what what do you think about that that's very interesting in theory that wouldn't really be bids on the demand for soil uh as much as it would just be having the temperature ramp up each season from zero uh having bids where you have people locking things up in advance at a certain rate that's a little bit of a that's a separate question i think from whether or not to have the temperature ramped up at the beginning of each season now whether people have bots that are there ready to bid for the soil at the right price that's a separate question uh like how to structure it at the contract level is different than whether to have the temperature ramp up in theory don't first respond or haven't been following mostly over the past couple days uh but but this seems like a very fine idea in order to minimize the temperature that beanstalk is paying uh but but still in in in general not a fan of bids for soil where people are locking up assets in advance uh because that that starts to function as uh some sort of reserve that can be depleted now to some extent maybe it's not that big of a reserve given it's just a more efficient for soil where then being stuck in clear things uh perhaps in a lower fee and lower fee fashion but the goal for the moment is to ensure the most efficient market for for soil and it's it's it's unclear that that taking bids in advance would would create that whereas i think the the the scaling of the temperature seems like a great idea okay the the channel or the discussion moved uh to a thread that's under governance uh so it will be called under new mechanism for for solid distribution i think if i'm not mistaken it's um quasimate who's leading the conversation there all right um another question about you know what we saw uh happen i think yesterday uh with the sanctions on on tornado cache and now the whole talk about you know um on decentralization um and i wanna i wanted to think uh or or talk a little bit about it here and not not from politics or you know what's what's right and wrong and and more you know about on it from you know an economics perspective and think about censorship and the idea of an economy that has you know censoring in it versus one that is free and and has you know no no friction of of that source in it do you think you know just just from an economics perspective an economy can flourish that has you know blacklisting risk in it that you know reduces uh let's say the security or the stability of that market one of the reasons that and it's specified in the white paper around the creation of beanstalk is that using all of the primitives that exist at the moment is totally impractical if the currency that you're using is centralized and sensorable why pay the premium to run on permissionless sensor re resistant censorship resistant primitives if you've got a weakest link in your chain that is highly sensorable it simply doesn't make sense and in addition to the non-competitive carrying costs uh plaguing d5 the the threat of censorship is is constantly a threat and i think in general we as a community need to have the attitude that this is expected right that censorship is a given that we don't we we are living in a time where uh freedom of speech is not valued and privacy is not valued the first amendment is not valued and that's a real shame and we need to raise our voices very clearly and advocate for right to privacy and right to free speech and i think if if anyone you know all of the the assets that were stolen from beanstalk were immediately sent to tornado catch so we you know we like all of you have felt the pain of staring at tornado catch i'm thinking and this you know this is horrible right like this is brutal but at the end of the day the the censorship of the the githubs of the contributors to tornado cash that's that's that's awful it's awful but at the same time we as a community need to recognize that the we're working on is not viewed as friendly and the censorship should be the expectation so this isn't surprising it's horrible it's it's horrible but it's not surprising so this is we need to collectively all take a stand for open source code for our right to publish open source code and this is this is a this this is a major important issue and i think it's really important that we as a community all join together censorship is not the the assault on privacy is he knew this is acceptable to us uh and i i agree of course you know that good politics uh bring you know good economics or a good economy and the opposite is true but if we were to think of this just from pure you know economics perspective or a business perspective someone who doesn't really care whether this is right or wrong uh uh wouldn't having censorship just by default being able they're in an economy would would not you know would restrict it and one that is not with thrive because this is that removes the friction of someone having just to worry about you know what's what's going on or what's happening here this this restriction that you're implying in there from you know just a pure economic perspective is is isn't good i'm not sure i fully understand your question but the point is that all of this tech that we're working on is useless if it has a least common denominator that is sensor sensorable so you can have permissionless layers but if there's one key cog in the wheel that is uh that is sensorable then then none of it is censorship resistant so that's that's the lesson and how that plays out in an economic level social level is uh is quite clear if it if it's if this tech at every layer isn't permissionless or you have a way to make it permissionless then it's going to be censored and we all need to act according okay with that maybe we can ask answer one of the questions which is when do we expect when is the best timeline for the being eath uh pool uh i think the answer to that is still the same which is end of uh uh this month or early early q4 and correct me if i'm wrong publius don't forget september don't forget september so we're still at the beginning of uh q through the middle the middle of q3 here uh there's august and september to go right i think i think everyone agrees that the beneath pool is is a very high priority if not the top priority and therefore the hope is to to be able to implement that as soon as possible uh you know a couple weeks is probably too short a couple months is probably too long so the hope is to get uh the first substantive bip which would be the beneath pool uh live in the not too distant future hard to give an exact date but it's also we're saying this would be implemented within beanstalk that's a a market pool so this wouldn't be a uniswap pool this would be a felis beanstalk native pool okay and then the follow-up to that question is what who are the next candidates or what are the next candidates after being with from a liquidity perspective yes what will the next whitelisted asset be lusd is i think we look back on the lusd white listing quite proudly uh lusd is a wonderful primitive which is rent free and decentralized and permissionless and immutable and has demonstrated incredible efficacy uh over the past couple of months with all this downside volatility it's been it's performed quite wonderfully so as we've discussed lusd doesn't hold a hard peg at a dollar which doesn't make it a good target to use for minting for delta b but it is an interesting option for people to use for uh look providing liquidity against beings perhaps if they want leveraged exposure to ethereum while they're providing liquidity to beams and lusd seems like a great option but frankly haven't haven't thought about that too much so that's just thinking out loud all right justabean asks what do we think about beanstock pursuing immutability is this something you know that's planned and and maybe even something that can be achieved it's a great question not sure to be honest as we've discussed diamonds as they're currently constructed uh don't really support immutability or partial immutability uh now from a theoretical perspective there's certainly parts of the protocol that at some point should become probably if not immutable in practice immutable or immutable and theory immutable in practice if that makes sense so even if it's not at the smart contract level that it can be made immutable from a dow perspective perhaps things become off the table to amend at the same time part to invasion being stopped reaching that point in the next couple of years one to two years i feel like there's still a lot of data that will come in and particularly at scale new information that can be used to further hone and refine the model and we're big believers in a bunch of good better best and that means that even if it's good it can always be made better and the goal is to make it as best as possible but it can probably always be made better and we'll never reach the the best possible point now how to evaluate the trade-off of the lindy effect of having a contract that is immutable and hasn't changed in a very long time with the marginal improvements that can be made well it's a question of how marginal is the improvement right so uh at the moment it's very clear that there are a lot of improvements that are worth uh making instead of of making it such that the protocol can't be changed but i think from an ethos perspective it's hard to argue against the value of immutability and therefore uh it's it's something that we should we should constantly keep in mind collectively as we continue to build and iterate on beanstalk over the next years but that's not something that that seems realistic in the immediate future okay excellent has some questions the first one is you know what is the strategy or thinking and changing changing delta v you know to impact minting um i think there is no strategy here it's always just a shortage that will be minted uh so maybe there has been a few discussions of if we tweak the algorithm in one way we can you know meant more or create more momentum publish can you summarize why there's been stock meant what is what is what is the idea yeah beanstalk doesn't doesn't really care about how much it mints what it cares about is returning the bean price to a dollar and so perhaps when the price is too high you can you can increase the bean supply by a multiple of delta b because most of the people that are hold receiving the beans uh and then to hold them for a very long time but at the same time beanstalk will never know that you never know what what uh what amount of beans that's being minted are going to be sold or priced they would be sold when they would be sold what conditions and what conditions they would be sold and therefore beanstalk has to act now adding a multiplier to delta b to increase the minting of beans or soil that seems to be a much worse idea than adding a multiplier to decrease the amount of beans and soil that are minted uh which would in effect limit beanstalk's ability to return the bean price to its peg quickly via minting of beans for soil so again trading off volatility at the expense of ensuring that it seems over issuing funds or over issuing beans that at some point would cause additional downside volatility so hard to imagine being stuck becoming more efficient by minting more beans and more soil so the goal is not to optimize making sure that there's lots of slaps to be perfectly candid the goal is to optimize around a a stable beam price with low relatively low volatility and frequent peg crosses and a sustainable pod rate right and excellent also asks if we can make this class you know more european time friendly if others if others also feel the same way uh please let us know and we will take that into consideration is that clear or later i have no idea early so maybe sometime around the same time that we we do the dao meeting whatever works we're happy to show up whenever it's most convenient for everyone i appreciate that harry smith asks um asks that he would like to understand what is the relationship between the beanstalk contributors and then root and he mentioned an example in the uh i think the beansprout proposal uh that one of the contributors is going you know to be uh uh unpaid uh what they also work or for you know full time for root so where do you think is you know the line drawn what are the same things that are shared i'm not sure even publish you can we want to answer that question i'm happy uh to give my opinion and i may also allow mr manifold to answer well i think there's there's this is a fabulous question and it's an important discussion for us to all be on the same page about from for at least from our perspective the a successful and healthy bean stock economy and ecosystem is going to come from a very healthy mix of public and private contributions to beanstalk so from our perspective lots of lots of contributors to beanstalk that are public contributors either to the code itself to the front end uh to managing certain things within the dow the hope is for for all of them to find businesses that they can build and develop on top of beanstalk that are ultimately going to replace or could be done in conjunction with their their roles within the dow or within beanstalk farms or being sprout so if anything i think we should we should all encourage the development of the most economic activity possible on top of being stocked and i think we can agree if the goal is for there to be a real businesses running on top of beanstalk that that's not best to be done uh exclusively in in public settings so the goal is for i think as a community we should encourage uh entrepreneurial spirit and we should encourage people to to be capitalistic here and and one of the the goals or one i think one of the economic principles specified in the white paper is that incentives determine uh behavior and at the end of the day beanstalk has to succeed in an environment lots of individuals looking to make as much money off of being stuck in fact uh the the incentives of beanstalk are assuming that that is what people are doing so from from a an ethos perspective i think we can all we can all try to figure out what can we do to to to build real businesses on top of beanstalk and how can that contribute uh over time perhaps contributors feel like they are not able to do both or do multiple things uh it's i mean just speaking personally in the in the case of mr manifold uh i think that the the amount of time that they continue to put into developing additional things related to beanstalk whether you can say that's part of being sprout or in their private capacity if they end up raising capital for additional private ventures it's a very interesting line that we're all uh learning about us we all kind of work in a decentralized public setting but also have private capacities here and i don't know what the right answer is here i think you you you say that you think disclosures here are very important i i think it's it's i would agree that uh that the people that are uh to some extent the people that are contributing to the dow it's important that they disclose that they have other interests with related to beanstalk that may not be directly directly aligned with the dow but at the same time again the whole point of being stocks incentives are such that individual private interests looking to profit maximize should ultimately be aligned with with being stocked so what's the right level of transparency uh and and privacy here is a an open question and i think we can all the best way forward is for us to ask questions and continue to try to to be be as open with one another as possible about what we're all doing and some people may want to share more than others about what other private ventures but the goal is to to nonetheless encourage contribution to to things in a public capacity even if there's there's things happening in a private capacity as well and and i can maybe share some thoughts uh as a community member and then also as a member you know of the bin bin firms uh committee maybe when when initially bienstock started it was almost that everyone was a part-time contributor and everyone was working you know uh somewhere else or elsewhere and they still all uh contributed to being stock and i think the measurement here is not if you're you know you're doing other things or if you're contributing elsewhere because i believe you know in the future we will still have uh contributors uh who do you know contribute uh and have other other things working on it as well the measurement is always you know what are you contributing to being stuck uh and you know in the mr manifold example even even root you know the the incentives the route are com completely and directly aligned with with beanstalk but let's say they were even separate you can clearly see the contributions just to beanstock itself uh and outside outside of it whether whether you know contributors want to say that or not i agree and i think the dao will collectively come to agree or decide if they you know always want to know for people who can contribute to now to disclose uh who else are they working to but i personally think that this is you know the measurement is always again what what are you contributing to being struck itself and not what are you doing you know elsewhere or outside of it and harry smith if i missed any bit of your question or you wanted to discuss this more you know you can type in or you're also welcome to come to stage okay we have a question from [Music] john and asks what's what's the difference between the pod rate and then the temperature so the pod rate is the amount of outstanding pods per outstanding beam that's the level of debt in particular pod debt relative to the bean supply the weather is the old name for the temperature the temperature is the interest rate for lending beans to beanstalk and receiving pods so for every bean that you lend to beanstalk you receive one plus the temperature divided by a hundred back in terms of pots okay mr manifold i believe you wanted to maybe touch touch on a bit do you want to come to stage not seeing in the audience i see you know yo guys how are you quite well how are you doing good good uh you know two or three days uh with the printer back on uh it's one time coming back uh feels great cool so harry i see all your questions they're great questions thank you for answering them um so i'm just going to kind of go here a little bit one by one and just make sure i know what you're asking so you know in terms of the beanstalk contributors and root uh there is currently no relationship uh with those two entities you know the beanstalk contributors are currently paid by the dow and roots a private company that's not paying these dow contributors um however in the future um you know if it could be another private company hopefully maybe root you know whatever you know we hope that you know the big bead stock contributors you know have the flexibility to go become entrepreneurs and build bean stock businesses and that you know that's something that is you know uh welcomed by the dow um because you know ultimately uh the contributors and myself frankly are people that you know have a high hurdle and a high opportunity cost and so you know with our time we really want to contribute with to the beanstalk economy um and make sure that you know as publius mentioned there's sufficient incentive alignment there um moving on here so uh bfp wants to pay mr manifold 20k a month from being stuck for full-time work okay great so you know again just on a personal note and full disclosure to doubt i do not take a salary from root um i haven't taken a salary in any of the months since the attack like the rest of the beanstalk contributors um so yeah you know a salary from beansprout would be really helpful for me on a personal level uh just something for me to kind of have and not not even because you know i need it for living expenses but just something from a salary perspective um you know i i have to my name um now you know if that's something that the dow doesn't see as appropriate that's completely fine and you know i'm happy to you know take the direction of beanstalk maybe under a different individual or or you know being being i'm sorry being sprout under a different individual or you know if being sprout you know doesn't make sense to fund by the dow period um however you know going back to the idea of a bean economy um there's a lot that i have in my mind that i think should be built in and around beanstalk and that you know being sprout could be a key vehicle in recruiting you know the talent we need facilitating the capital relationships um and and and making sure that you know builders have sufficient resources when they come to beanstalk and being sprout to get started and i think that's really valuable you know for instance today i spoke to literally a a level you know elite team uh interested in building a bean ecosystem wallet and mobile app um and these things i think are really important um you know as we're all here with beanstalk playing long-term games um and we really want to facilitate you know the development of a true economy uh you know with tara for instance you know one of the things i give doe lots of credit for and you know i've had a couple good friends that were at terra you know throughout you know 2018 and onwards uh 2019 onwards and you know he he was he was truly a leader in building an ecosystem and economy and although you know we don't agree with tara's economic model you know there's a lot to learn there and you know there's a lot to take away from that and you know they did do a lot of things right and i think you know being sprout can be you know really you know a supporter in in carrying out that goal so ultimately like those are kind of my high level visions um you know happy to go to anything else um you know scrolling down here so yes i am a fiduciary duty to root um that is absolutely correct uh not beanstalk why does beanstuck have to pay for a private co so it's actually quite the opposite beanstalk hasn't paid anything to root now that's not a penny but root's actually contributing you know upwards to three hundred thousand dollars um towards funding the hal born retainer on behalf of beanstalk so you know it's actually a really positive some relationship in which you know we collectively with the private you know you know entities that can be spun up you know they we really want to form them you know as other entrepreneurs are interested in building a beanstalk to really you know contribute and donate back to the protocol so you know against this really positive something um hopefully um that okay you're still going here so no root salary but you're getting root equity yes that's correct uh i am getting root equity uh that is something that you know i frankly don't know how much equity i'll be getting it could be um you know very little uh it's it's and the reason is because you know again i kind of you root as a public goods you know if you look at uni swap labs and what they're able to fund and recruit to their ecosystem because they have a private entity that can facilitate this like that's really important if that means me having less equity at the day i'm totally fine with that um and if that means you know other beanstalk contributors getting some root equity at the day that's completely fine too if that's what's needed for the ecosystem to succeed um you know scrolling down here if you have any other stuff my concern here is using beanstalk resources to fund a private venture in route um so again there have been zero bean stock resources um that have provided a penny to root in fact root has donated three hundred thousand dollars to beanstalk um okay i think we're at the end there but if there any more let me know thank you thank you manafort for for taking the time uh and i also wanted you know to bring something back of of the beanstalk ethos is that it wasn't long ago when you know no one no one knew anyone and we were all individuals with you know pseudonyms and and it was always built around you know decentralization uh and on how the protocol itself functions uh don't don't don't see or think you know how disclosures is what's going to protect the protocol you always want to think of the protocol itself on you know how how can it always function and what's the best for its interests and then the way to judge the contributors again is you know based on what are they contributing or what have they contributed to the to the protocol itself okay let's get back to some questions uh publius before we do though i just want to say this is what it's all about guys so thank you harry for asking the tough questions i think we all appreciate it thank you mr manifold for being so transparent uh and if there are more questions that people have i think this is this is an open environment so let's all continue to try to put our best foot forward and have open and transparent discussions and again what that fine i think will become clear to everyone over time so this is all we're all going to figure this out together so uh thank you both for uh for participating in you know these tricky new discussions okay back to some um economics questions or questions that are in the economics channel um and this is the idea uh behind this is you know what what can we do or uh how can uh beanstalk somehow reduce its debt uh and the thinking is you know what if bin stock offers um you know uh that uh a pod uh holder uh based you know we're gonna burn some of your pods and then we're gonna give you uh fertilizer uh for less than that and we understand of course that you know fertilizer is there to recapitalize uh uh uh the solid funds but let's think of you know we're having this to be full-time running always so if you have you know 100 pods at the line of 100 million you get like let's say like one one sprout or two sprouts did i do i make sense and i hope i summarized also the idea well i think it it generally makes sense the issue is that with soil one of the key parts of soil is that people can calculate exactly at what being supply their pods should become due uh or payable or mature and therefore it's relatively simple calculus or simpler calculus when it's when calculating your return now you just need to calculate your risk so what do you think the chances are over what period of time do you think until you get this return but you know your return and you know the exact metric that will determine when you get it to the supply now as soon as you start to offer additional types of debt or ways for people to move adjust their debt or restructure it where they skip in the line and get some sort of preferred payment uh that really compromises the integrity of the the the soil and pod structure so the the issuance of fertilizer was really a one-time thing that made sense given the the the crazy circumstances after the attack but in general i think a lot to a large extent less is more here and keeping the the mechanism relatively simple on this front and making pods very basic the the best thing to do is to ensure that there's a liquid secondary market for parts when the more liquid the secondary that's the more attractive it is to be in stock and therefore uh the the larger the debt level can become and the less risky it is for being started to have to be issuing debt or have outstanding debts so uh improvements to the pod marketplace are something that will be more beneficial to being stock than futsing with the the core uh the core peg maintenance method which has has demonstrated pretty strong efficacy at attracting lenders verdana bean asks uh i think this is when you mentioned the hyperinflation talk what's what's the podcast or which podcast was that so i don't know the exact episode uh to be honest uh it's the i'm opening up my spotify right now it's the new austrian school of economics podcast with a series on the formation of interest rates and if you know if you want to know the exact episode i could tell you a range uh but it's i don't know the exact episode but it's called yeah it's the the antalvaquete podcast the new austrian economy gusto asks um and it comes back to you know to the censorship for the sanctions that we've seen uh have been forms is to protect itself you know from from things such as like netlify github etc definitely important and there's lots of decentralized primitives and networks that are being created to serve the roles in the necessary parts of the stack but it's it's not so trivial to integrate all of them into the beanstalk stack so definitely a priority over the next year let's call it to make sure that everything is implemented in an open source fashion on a totally decentralized stack but it's it's a labor of love and one of major efforts so i think we all of the contributors have this as a major goal and the more contributors that are available the better because having a a best in class well you say i see the comments it's pretty trivial to switch from that wifi to a self-hosted website it's not search review who's hosting this so i'm not hosting it are you going to host it uh you know you need it like this is it's not so simple so at the end of the day we need to we need decentralized hosts and we need decentralization at every every layer of the stack okay a question from james uh is publius or insect farms worried about anything so far that we've seen or from what we have seen in the past four days i mean you know i'm a nervous jew so i worry about lots of stuff but uh it's a in general it's like this has been relatively smooth sailing i think we can expect to see some additional downside volatility here uh like in general so 97 cents is like if that's the lowest we see that's i mean it's amazing right so perhaps beanstalk really is that that strong of pig maintenance perhaps it's a function of the incredibly low pod rate right now uh but this is this has been an encouraging first couple of days uh there's nothing there's there's nothing that's sticking out as a a major problem at the moment you know you know public one of course i believe everyone you know have been thinking uh on on on how you know the protocol will will perform or do on onpose and and just to think about that you know in this in this economy and then this what's happening with defying and specific as well and then the protocol itself loses everything that it has and comes back and you know being is right there at peg performing as it is is really nothing short of you know like magic or a miracle something that is done purely through you know you know math and and on smart contracts behaving as as expected or as you you want to be i i was thinking that the protocol will even you know go through go through harder times and and believe it would come back and and this this past four days have beat you know beat my expectations it's very exciting it's very exciting so we will continue i think collectively to all watch this thing and see see what the the upside and downside volatility looks like with the new a parameter and the smaller liquidity pool for the time being but this was a this was a an encouraging couple of days uh with without you know still still a little ptsd on the on the attack so it's like it would be as long as there's no major uh major issues i think we can call that that a huge win okay i think unless i miss a question please remind me but i think i i came to the end of the questions at the town hall uh chat wanted to comment or talk a little bit about you know what happened yesterday drove let's say people holding usdc and i'm not so sure if that exactly you know was the trigger but you've had an increased interest you know in other and other uh decentralized stable coins and we could see how these stable coins weren't you know able to handle uh that demand uh and you know the current centralized table funds are so big that you even have big protocols openly saying that the decision of ethereum's fourth for example is decided by you know the stable coin holders and then you know the current decentralized stable coins can't even handle one percent of the market cap off you know of the big centralized one such as uses usdc and so on these are in tens of billions uh the decentralized you know stable coins reach ritually you know have half half of that and then you find you find a crunch uh just given the connector that builds it don't you think that this is exactly what is you know the market the market cap or the or the cap and supply that other protocols have and it is what you know beanstalk is answering i think we would probably take it one step further and say that at scale you wouldn't you wouldn't just expect there to be east trading against beans you'd expect there to be steak to eat trading against beans and assuming that beanstalk is working at the scale of trillions of dollars it's not unreasonable to expect that the vast amount the the vast majority of steve would be within the silo and therefore instead of usdc or usdt getting the main votes in which chain is the winner when there's a contentious fork i think you could make the argument that economically uh if beanstalk owned the majority of steve stockholders held the majority of steep that whichever whichever chain people continue to lend to beanstalk honor whichever trade people continue to view uh being stuck that's the most credit worthy on uh or perhaps the dow could even vote uh which protocol beanstalk would honor uh in advance there's a lot to be said for this is an opportunity from an economics perspective uh for for for this whole economy to actually be built in a decentralized fashion you can as this is what we were talking about earlier if you have centralized you're really your whole system is centralized so so beanstalk creates the economic basis for an alternate totally decentralized system and the goal is to the goal is to help now build all sorts of tech to facilitate that plain and simple but but the current the current reality that we live in well short of i think everyone's expectations and and it should be it's not good it's good so we we can do a lot better and we hope that being stuck is a major part of that magic asks a question and i'm not sure if i understand that nasdaq maybe you can you can answer me and he is saying why don't we mint more unripe beans and pay the contributors you know for their unpaid work uh do you mean more android beans for the past work or you know meant unripe beans to pay for future for future work i think i think he means for past work so you know reward reward more i'm not sure if you have an answer there publish i guess you know propose it to the dow yeah i would say that's that's a question for the down which is an appropriate amount to to compensate everyone for the past couple of months tyler b asks is there anything that can be done to push the price of being way above peg so it can you know clear the pots faster demand for beans so i think because maybe it also comes to be some thinking of you know why why does bean stock meant uh and and something that if we change the algorithm maybe we will meant faster and pay off and pay off faster and and beanstalk doesn't mean to reward it it really does the main thing to bring the price to one uh or you know to first first ability not not for rewards and not to pay off people just to pay off people in fact by creating stability bean stock creates utility which should create demand for beans that allows it to pay off its debt but by just minting beans in order to pay off the debt that's how you create excess supply and downside volatility that then destroys utility so it's very important the protocol moves slowly and steadily with the main goal quite clear john asks if we can give some sort of guidance for users on the website i'm not sure i understand it do you mean things like tool tips or guides on how to use the website if yes we will want to work on on how to guys this is something that you know it's as doesn't mind to be done rg asks when is the nft i believe we will probably have an update by the end of this week my understanding is the team is testing the attributes and i think a little bit of you know the rarity or how will that happen um then i asked what about a b in frank's uh base pool uh most most probably the well the next is going to be being if and then the one after it is most probably going to be being lusd but there hasn't really been discussions on you know what what is next uh yeah i mean frax hasn't been very interested in us or hasn't we've we you know they haven't reciprocated any interest and you know they're all backed by usdc so it's hard to it's it at some point if we're if we're listing if beanstalk is whitelisting a bean frax pool why not whitelist it being usdc pool so if you're if the dow is comfortable with that level of centralization why not just rip the whole thing and just say the usdc pool so not sure what the benefit of fraps is other than maybe they'd pay some additional rewards and subsidize it which if that protocol wants to pay the dow that's fine but it's it seems like a pretty low benefit pool to be in stock at this point and then the last question is one one is the beanstalk decks that will probably be launched with the being eighth pool so probably one won't put it yet but hopefully sometime soon okay i think we're at the end of the questions maybe i have one more question uh publius uh which is about convert uh and when when converting from lp to beams there is a little bit of friction there from losing you know four seeds uh uh to two seeds uh and like there's an opportunity cause then you start calculating you know what if you think the price is enough or good enough to convert or not i wanted to revisit a question uh that was asked uh before which is making the the the silo exclusive to lp and it means that you know you enter the silo as an lp and then once you're in you can convert however you want at whatever price that you want but you don't have you know an issue with seeds or losing seeds anymore does that make sense and do you think that will help with conversion by removing the friction of you know going going from four to two well i think it's important to say that there is likely to be demand for just deposited beats particularly once there's fungibility built on top of siloed assets so you have some sort of fungible bean that's earning the silo yield and beanstalk should be able to support both right it should be able to support having straight deposited beans and then having deposited lp that is constantly being converted that's independent of the deposited beans so there's nothing wrong with deposited beans and while demand for deposited beans in lieu of demand for deposit lp does affect the overall liquidity to supply ratio at the end of the day bean stock should be optimizing for utility and [Music] utility is clearly i mean it's up for the market to decide maybe over time the market decides that holding exclusively exposure to liquidity is what's desired and there's no need for sprayed bean exposure but it's from an implementation perspective uh i think at the moment there's no reason to remove deposited beans it's hard to get it's hard to to understand the benefit okay any concerns about the upcoming merge going from proof of work to proof of stake no i think it would be a much more interesting question if there was a bean eat pool was the only pool and we've talked about that previously but at the moment we don't expect there to be anything crazy with regards to the board alex asks people are using silo or third rewards to buy back into fert and that causes a set pressure and the price to go down is this a surprising development or was this accounted for so you know no one likes the monday morning quarterback so instead of talking about what was intended or new i think we can just analyze the fact that the the the existence of a high interest rate at the moment even though it's less than 500 percent serves as both competition to demand for the silo and the field and because it's exclusively usdc very clearly uh incentive for people to sell beans into usdc to purchase more fur now to be candid the main concern with the ramped up minting schedule was that there would be too much demand and not enough uh minton and therefore the the possibility of a lot of demand to sell bean mints into immediately into usdc to purchase fertilizer and yield farm that seemed very attractive so it's hard to say exactly about what was all of the different intentions because of the various interplays between soil and the the field and and silo and stock and then the fertilizer the barn it's it's a lot of uh of interweaving parts i think it's it's been very clear over the past couple days that all this stuff has been playing out in relative we did see we did see the price go down to 97 cents which i think we've expressed it's kind of surprising and the limit of the downside perhaps even a lower price would have been expected so generally pretty engaging nothing has been uh too surprising with regards to the the structure of the fur or the the market behavior to it rg asks gauge on being a three curve i'm assuming here you know like bribing i guess one curve maybe at some point uh the reality is that the implementation of the silo that will facilitate the distribution of the yield from curve probably still ways away and therefore the gauge is not priority at least at the moment although uh it's hard to imagine the the curve down not improving the gauge for the pool so it is perhaps something to pursue in the too distant future but no real thoughts okay i think we we're at the end of the questions and we'll also ten minutes uh post the hour publius thank you very much for taking taking the time you know as always to answer all of these questions thank you matt this has been a very exciting couple of days and looking forward to having uh god willing many more of these discussions with with all of you same with see you see you next week