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Beanstalk University Class #40

Date
August 23, 2022
Timestamps
0:00 Do we need Seeds at scale? How do we determine the amounts of Seeds per Silo deposit? • 3:09 Do Seeds have a cost on the protocol? • 5:10 Can the DAO be accurate with Seed allocation? • 7:24 How does Beanstalk avoids manipulation? • 12:28 How does the Beanstalk DEX help peg maintenance? • 15:40 Is it possible to accurately measure demand for soil when minting less than one soil per season? • 17:50 Publius’ thoughts on having an APY on the website • 20:29 What has to change with the flood when there is no longer a withdrawal timer? • 24:30 Could we add data from the Pod Market Place into the Temperature calculation? • 26:20 What happens when the Chop penalty goes to zero? • 27:23 What will be the biggest catalysts for demand for Beans? • 28:30 Will anything happen to Beanstalk because of the ETH 2.0 merge? • 30:30 Will there be a marketplace for Unripe Assets? • 31:47 Why does Publius not take any compensation? • 33:45 Would Publius ever run a business on top of Beanstalk • 37:02 What does Publius think about the requested retroactive pay? • 40:37 How will businesses be built on top of Beanstalk? • 47:30 Closing statements
Type
Beanstalk University

Recordings

Notes

Do we need Seeds at scale? How do we determine the amounts of Seeds per Silo deposit?

  • The Stalk system is going to continue to evolve
  • What we have been thinking of is instead of the DAO setting specific seeds per BDV for a given asset, instead set targeted ratios of BDV in the Silo. Then the seeds per BDV could change depending on the ratio of the different assets in the pool.
  • The DAO could vote that the optimal amount of exposure of Beanstalk to various assets, and that could change over time.
  • Even at scale, if there was no reason to ever leave the Silo, there would still be a function for seeds in terms of Beanstalk’s ability to manage risk.

Do Seeds have a cost on the protocol?

  • There’s no cost to the protocol, but it introduces opportunity costs to users.
  • Grown stalk introduces a cost to leaving the Silo.
  • Seed rewards direct deposits to particular assets.
  • Has the effect of decreasing ownership concentration over time.

Can the DAO be accurate with Seed allocation?

  • At a high level, it comes down to which assets Beanstalk wants exposure to.
  • The DAO doesn’t have to be perfect in this regard.

How does Beanstalk avoid manipulation?

  • There is a distinction between manipulating user behavior and manipulating the protocol.
  • It’s hard to prevent user behavior from being manipulated.
  • The question is how the protocol responds to it. Over time Beanstalk should be able to return the price to peg, and over time as Beanstalk proves its ability to return to peg user behavior should become less vulnerable to manipulation.
  • The more educated the user base becomes, the less they will be subject to manipulation.

How does the Beanstalk DEX help peg maintenance?

  • Trading fees make arbitrage less efficient.
  • Removing the fee will allow people to buy and sell all the way to the peg.

Is it possible to accurately measure demand for soil when minting less than one soil per season?

  • It’s difficult to know what it means to accurately measure demand for soil.
  • It’s easy to measure that there is demand for soil, but it becomes much harder to measure when there is not demand for soil.
  • It’s hard for Beanstalk to know if there is no demand for soil because there’s not enough soil available, because gas fees factor in.

Publius’ thoughts on having an APY on the website

  • APY is not the right way to think about returns within Beanstalk, but one of the main value propositions of Beanstalk is the positive carry.
  • There needs to be something to indicate the return, maybe some indication of supply growth.

What has to change with the flood when there is no longer a withdrawal timer?

  • The flood was instrumental in preventing Beanstalk from overheating during the initial pump and dump.
  • It’s not likely that anything with the flood will need to change if there is no more withdrawal timer.
  • Might be a good idea to have the flood ramp up over a number of seasons.

Could we add data from the Pod Market Place into the Temperature calculation?

  • Dutch auction is probably the next change to be made to the temperature calculation.
  • There could be additional changes based on the results of the auctions over time.

What happens when the Chop penalty goes to zero?

  • There will probably need to be a BIP to handle the conversion of Unripe assets to ripe assets with no stalk loss.

What will be the biggest catalysts for demand for Beans?

  • The competitive carrying costs of holding Beans in the Silo will attract businesses to build on Beanstalk.

Will anything happen to Beanstalk because of the ETH 2.0 merge?

  • Don’t expect there to be much of an impact.

Will there be a marketplace for Unripe Assets?

  • They are ERC-20 tokens, and there’s nothing preventing you from selling them.
  • There’s no liquidity pool with liquidity for them, but there’s nothing stopping people from using some kind of order book.
  • There doesn’t seem to be any reason for Beanstalk to incentivize it.
  • Beanstalk would prefer people to chop if they want to leave.

Why does Publius not take any compensation?

  • We don’t view our relationship to the DAO in that capacity. We are not workers for the DAO.
  • We are stalkholders and podholders and we are heavily aligned with the long term success of Beanstalk and don’t require any more incentive to continue working on Beanstalk.
  • The hope is that over time as people build businesses on top of Beanstalk, they will work on Beanstalk because of their own exposure.

Would Publius ever run a business on top of Beanstalk?

  • Certainly. That is the goal, and everybody contributing to Beanstalk should be thinking about how to build businesses on top of Beanstalk.

What does Publius think about the requested retroactive pay?

  • Don’t want to discuss specific proposals, but at a high level there have been a lot of people investing a lot of time, energy and brainpower getting Beanstalk back up and running and those people really do deserve to get compensated really nicely.

How will businesses be built on top of Beanstalk?

  • Businesses can take advantage of the positive carry to compete with existing businesses.
  • Using betting markets as an example, it’s possible to offer much better odds because the Silo yield is generating revenue.
  • Liquidity on top of Beanstalk can be used in a capital efficient manner without dealing with opportunity costs or relying on centralized entities.

Transcript

and there are two questions here one is whether we need seeds at scale and then the second question is how do different pools you know get allocated different seeds so we can start off with the first one which is the idea is that you know we have seeds for the stock system um but but maybe at scale we don't need seeds anymore what do you think about why would why why would that be um so so the thinking is and if i remember if i remember the argument correctly it was something of sorts that you know the seeds are there um to you know introduce an opportunity cause to not leave the silo but once bean stock is at scale and everyone already uses you know beans there is no need to add that opportunity cost anymore okay so the answer to the first question is actually directly related to the second question which is setting the amount of seeds for different deposited assets and in particular deposited in different pools so the [Music] the stock and seed system what's typically called the stock system is hopefully going to continue to evolve and the thought that one of the things that we've been thinking about might be a better way to say it is having the instead of the dow set specific seeds per bdv for a given asset instead set targeted ratios of bdv in the silo and then the seeds per bdb can change depending on the ratio of the different assets in the pool so what that could mean in practice is that the dow could vote that the optimal amount of exposure of beanstalk meaning the liquidity that beans are trading against is 50 percent uh steak to eat 30 percent uh eat and then you know 20 of different currencies the point is that the seeds per vdv ratio for depositing different assets could change over time uh autonomously as a way for the protocol to regulatives around depositing different assets in the protocol and introduce relative opportunity cost depending on the asset that is in the silo so the seeds even if at true scale in the trillions there's no need to leave the silo ever then the seeds would still have a strong function in terms of beanstalk's ability to manage risk yeah and you're right this answer the second question and i have some follow-ups to the second one but if we go back to the first one a bit and i think the idea uh comes in from the thought that yeah um seeds is like a cost to the protocol so somehow if we abstract those seeds then the protocol doesn't have to pay for that stock can you maybe uh touch upon the idea of like once you're in in in the system or once you're in the cycle is there an actual cause because of seeds or seeds scale everyone equally so it doesn't really exist so it's interesting because beanstalk can mint beans and stock and seeds and any other asset there's no cost to the minting of the assets where the cost plays in is in the opportunity cost associated with grown stock from seeds in various different instances so just to play them through the first is the most obvious one which is that the amount of opportunity cost for withdrawing a deposit or the asset increases over time however there's also a couple of more subtle things about the seeds the first is uh that the different seeds per bdv does affect people's willingness to deposit different assets so if you can receive more seeds per vdv you may be willing to deposit more of one acid or another and then the second aspect of it or the third i guess would be that the the stock the grown stock that any individual has relative to others relative to newer deposits decreases over time and so the function of grown stock and the structure of seeds yielding grown stock linearly is also designed to decrease the ownership concentration of beans over time and that's another thing that you you would lose uh if you got rid of seeds okay that's great my follow-up question was going to be on whether you think um the dow can be um let's say accurate in the prediction of what pool is good for bean stock and therefore allocate more seeds to it or do you think you know the market will always know better and there is no reason for us to divert them as long as it's an lp and let them choose so this is a situation where there's a feedback between the rate that beanstalk is paying in terms of seeds per vd bdv and what the market says but it's important to state that what the market wants is going to be dependent on lots of different factors outside of beanstalk right if you're holding bdv and you get a choice between holding a bunch of different assets that are all have white listed lp tokens with beans and these assets as exposure which assets people are going to choose is totally independent of beanstalk except for the seeds per bdv and so the reality is that to answer your first question is the dow able to assess risk i think in general the doubt could be able to assess risk the dow should be able to assess risk uh but they don't need to assess risk that well the point is just at a high level from a macro perspective which are the assets that beanstalk wants exposure to and which are the assets that beanstalk wants less exposure to uh so it's not it's not like such a sophisticated question to answer and it's really important to note that the market is going to react to the rate that bean stock is paying in terms of seeds for bdv so that's why it might make sense to transition over time to a system where the seeds per bdb changes based on the desired exposure of beanstalk as determined by the dap and of course the amount of cs per ddv is evident in how bin stock incentivizes or is moved towards uh more liquidity uh rather than just holding you know beans okay another discussion uh revolves around you know derivative markets once once we have them built on top of being stock and the worry comes from once we have you know participants able to uh short or long um they will somehow start you know that'll be like an incentive for them to manipulate the market so just starting off on a top level so a leverage market or a longer short is basically doing things with more capital so the the same the same thing that you can do you just need like a lot of money for you to be able to do it can you maybe probably just take us through how does beanstalk in general you know stops or avoids manipulation let's say or is manipulation resistant so on the one hand the i think it's important to state that there's a difference between the protocol being manipulation resistant and the users of the protocol being manipulation resistant and in a world where there's sophisticated derivatives built on top of beanstalk it's very hard to imagine a scenario where particularly in the first couple of years there's not a lot of money to be made in using derivatives to get short create a lot of bud dump some more beans on the market create some cell pressure and create some short-term negative feedback loop that is is manipulating user behavior to extent now manipulating might not be the best word uh because people can can be free to do whatever they want but the concept is through uh some sort of actions you can create a cell pressure and a bank run and there's no reason whatsoever to expect that won't happen with beanstalk and with beans and so i think the point is that the the question is around twofold one what are users doing but the assumption is that users are running for the hills at least to some extent and bank run and then the second question is around what does the protocol do to respond to it but that's separate than the protocol being manipulated so what does beanstalk do during a bank run well we've experienced it a couple of different times and it issues a lot of debt it tries to incentivize converts but it may take a while for the bean price to return to the peg it's taken a month plus to return the price to the peg in the past and there's no reason to expect that that won't happen again but the bigger point is that over time beanstalk should be able to return the bean price to its its peg and even if it takes a long time to do it uh the more it does it and the more frequently it it is able to return the bean price to its peg in response to uh large flood events or large cell pressure events uh the less and less the user manipulation will happen if that makes sense so there's a a positive feedback loop in terms of anti-reflexivity here but it's something that beanstalks gonna have to earn and earn the hard way and the hard way is that it's volatility which there's nothing wrong with that long-term uh beanstalk uh you know holders and i guess silo members and potholders ultimately reap the benefits of long-term oriented participation protocol and that's the way it's supposed to be so beanstalk has always been willing to trade short-term price volatility for long-term sustainability and as derivatives are introduced on top of the protocol there's no reason to expect that volatility will will be less now there's certain ways to implement beanstalk native derivatives that will be volatility dampening and that's great but over time you'd expect ftx roll out of bean perp and now you can get short beans in size uh that's going to result in some real cell pressure on the market in some capacity even if you can buy the short perps and not actually sell the beans you'd expect in a somewhat efficient market people are hedging that exposure uh who are taking the other side so it's like there's going to be cell pressure created in some capacity through artificial derivatives and and other forms as the economy grows so the the thing is that beanstalk can't be afraid of it the more educated people are about how beanstalk works the less likely it is that beanstalk is unable to survive such a situation an uneducated user base is much more likely to be manipulable in such a situation so that's that's one of the reasons why we love class so much and hopefully that's a constructive uh way to think about derivatives at a high level and i'm obviously happy to talk about any particular derivatives and what they might mean for being stopped that was very clear and thank you for taking us through it and to those who who might have just joined us uh or already there if you have follow-up questions on that please feel free to drop them in the town hall chat okay beanstalk decks so we spoke a little bit about it uh in the past uh classes and meetings and and we get the general idea which is you know a zero fee um exchange or a dex we also touched a little bit upon this but maybe you can expand more on how does that help with with peg maintenance so we understand that now maybe the cheapest most popular exchange charges for basis points how how does that impact you know the ability for for peg maintenance and specifically convert and efficiency of the convert market so in short it's pretty simple whatever the fee is if it's four basis points one basis point half a basis point uh or 50 basis points that is the difference between the efficient price to arbitrage the beam price to its peg and the peg so a four basis point uh fee means that anyone buying beans above the peg minus four basis points is actually paying above the peg and anyone selling below the peg plus four basis points is selling below the peg which is obviously inefficient for people that are buying and selling beans at the amount of whatever the fee is and so lowering the fee is great but the reality is that if it you're paying above who wants to pay above a dollar for a bean right so the whole point of of buying below the peg is that you should be able to buy all the way to the peg and that will help with peg maintenance otherwise the efficient thing to do is to buy up to 9996 and that doesn't really help beanstalk right beanstalk wants to to incentivize buying to one to its peg so uh removing the fee all together should greatly uh help with peg maintenance even if it seems microscopic in practice it's quite significant so to translate that to numbers if the price of bean is 99.7 that makes no sense right now for everyone to convert because it can't be profitable well it's not that it makes no sense to some extent the stock uh is retained but it's it's it is inefficient to a large extent yes the maybe the most efficient thing to do if it's purely selfish behavior right now is to convert to 9996 yes and my my example i excluded of course the opportunity or the or the value of that crude or gained stock okay um those are the questions the questions that i had um i see austin typing something on the town hall chat so maybe we can wait wait for that okay he dropped a few questions so the first question is about soil um on the soil market so is it adequate is it is it possible to adequately adequately measure uh demand for soil when issuing less than a soil for so many seasons in a row so on the one hand adequately measuring demand for soil is such a difficult thing to say what that means the reality is that it's very easy to measure that there is demand for soil so the positive there is demand for soil is a lot easier to measure than when there's not demand for soil when there's not demand for soil it's hard for beanstalk to know whether there's there's not demand for soil because there's not enough soil that it's cost effective to sow when factoring in gas costs but when people are sowing when there is demand for soil at such low amounts then beanstalk is able to adequately measure demand for soil now if you're asking about in a perfect world how does this work it's very hard to know because what people what the market demands in terms of even factoring in gas uh the maybe like the gas adjusted return the minimum gas adjusted return it's like that's hard to know so you can program in uh get the gas fee but you still don't know what the actual return is that is necessary and that's really at small scale a function of the amount of soil so there is this weird there's this weird edge case around what to do when there's not enough soil and it's imperfect yeah i think i think there are a few challenges there but all in all it's a good uh measure uh or let's say maybe you're not measuring demand for soil well but the output is is how you want it to to react second question is about your opinion on having an apy on the ui well on the one hand it's like we've never been a fan of the apy because it's not really the right way to think about returns within beanstalk but then again it's the everyone just wants an apy and it's the thing that everyone thinks about in terms of most simplistically trying to understand the the interest rate or the carry and frankly bean stock one of the main value propositions is the positive carry so it's important to to put up the the data that demonstrates the positive carry the competitive carry somewhere on the website so whether the apy is the perfect thing to do unclear but uh there should definitely be some indication of the the return on on the site for being in the silo and i was thinking and it's not exactly the right terms but the silo is really like beta exposure to the growth of beet stock and so perhaps it's like a measure of the the growth of the beta in some way i guess that doesn't that doesn't really have to do with the measurement of the apy in any capacity but i think we need to frame the the apy as something something a little bit different now we've always tried to be as transparent as possible writing the formulas out and everything is like anyone can read all the math and the formulas but it's like it's still imperfect um i mean if we get so you got to put something up there we got to put something up yeah a manifold i think is plus one on on thinking of another term maybe uh describe the apy yeah i see i see seniors growth percentage that's interesting but the reality is it needs to capture the return for being in the silo and the inflation rate also misses that it's not the bean inflation rate it's what's the yield for being in the silo the b inflation rate is going to be higher than that and more importantly when figuring out real carrying costs as long as the bean price is stable the inflation in the bean supply doesn't affect the actual herring costs of beans other than contributing to positive care and costs i look forward to the choice of word here and something tells me it may be farming related third question what has to change about the flood when there is no longer withdrawal timer and flood is a season of plenty so the flood there's a lot to say about the flood the flood was instrumental and beanstalk not overheating during the initial pump and dunk it it it ended the pump and brought in the dump and fought against the market in order to bring in the dump and then when the dump came it was brutal and the price went down to 24 cents but if there was no flood it would have gotten would have gone a lot lower and it's unclear that the credit mechanism would have been strong enough if the price went down to one cent uh maybe but maybe not who knows so the flood definitely had a strong effect on dampening volatility now one of the rules of the flood which didn't come into play in uh september was that all of the pods that were sown prior to the the the the rain starting i guess now it's called uh the farm becoming saturated i believe uh the is that the terminology i can't believe i'm not even remembering the technology what are you going to do yeah exactly but the the concept is that the the the flood uh the flood and the flood harvests all of the pots uh that were sown prior to the the farm becoming saturated what was previously the rain and therefore the there's this huge like season of jubilee if you will where or a season of plenty where a lot of extra beans are minted and that should help return the bean price back to a dollar and maybe below a dollar and in particular from a theoretical perspective the thing to mention is that the flood only happens when the debt level the pod rate is too low it's excessively low and so the concept is there's extra beans being minted maybe the price goes below a dollar and beanstalk has to mint more debt because because it minted too many beans which is sort of what the system wants at that point if it has too low of a debt level and so there's an argument to be made with that as the context that there's nothing that needs to be changed about the flood when the withdrawal season goes to zero because right now the flood would happen one season after uh it started the farm became saturated and otherwise otherwise there's no chain so i think the more interesting question is what if anything to do with the flood and a it's not clear that every pool participate in the flood probably it is but uh the implementation of the flood from an architectural perspective in the contrast can probably be further generalized to be more of like a flood whitelist uh but beyond that the the main question is whether to have a flood happen immediately or maybe scale up over time so instead of selling all the way to peg the first season perhaps there's a ramp up of a couple of seasons not sure how that plays into the would have to think more about how that plays into the economic incentives around inorganic demand uh but but there's there's some things that could could be improved about the flood but i think generally nothing needs to change which is what what austin asked about um and the term is oversaturated oversaturated i apologize it's okay um the following question so we're talking now about the temperature and maybe with some ideas or comments that were brought up on ways of maybe changing how the temperature is adjusted and that may include he uses the word reflexive i'm not sure if that's what what you said before but i think that could be about maybe incorporating some data from the pod marketplace into into the weather can you maybe touch upon that a little bit yes so i think there's been a lot of discussion about from the community the proposal of the idea of having some sort of dutch auction for soil at the beginning of a season and think that that's probably the next improvement to make to the temperature that beanstalk is paying now after the dutch oxygen is implemented perhaps as a derivative to have the temperature decrease based on the average result of the dutch auction over time for example in a downward reflexive fashion uh but not an upward reflexive fashion because again b and stock would prefer to have downside price volatility then issue too much debt so you can't have upside uh temperature reflexivity but for now think that there's probably more of an efficiency to be made by introducing a dutch auction which again was a great idea from the community not not sure who to give the the credit to for the original idea but would love to know yeah i remember the i'm also not sure i have someone in mind but maybe i'm wrong so i won't say it but i remember it being brought up months ago and i think the group that resurfaced the idea it started with cosmet i believe all right the last question is what happens when the chop penalty goes to zero um so you know bin sock sold all first and it paid it all back will it automatically then just you know switch the unripe to the underlying or people will have to do it themselves there will probably have to be a bip at some point to introduce the conversion from uh unripe assets to i guess just normal assets via a chop such that there's no loss of stock but it will be half to done but be done by the user and there's no there's no you know reason to do it at any given time as long as you're in rooting your revitalized assets so it's sort of like an optional thing from a liquidity maximizing perspective so the focus would be that there won't be any like stock lost or you won't have to lose focus meow meow asks what do you think is the biggest or going to be the biggest catalyst for demand for beans so it's hard to say what in practice will be the biggest catalyst for demand for beans that's one we'll have to see play out in practice uh but from a theoretical perspective it's the competitive carrying costs and we think that at this point it's still probably a little bit early for businesses to really start to be built uh using beans uh but not that and what we mean by using beans is the competitive carrying cost of holding beans in the silo is something that businesses can use to for the first time build on decentralized primitives without any points of centralization uh in a cost-effective fashion where businesses can really compete with traditional businesses built on centralized primitives so not sure how long that's going to take for the whole bean economy to flourish but the catalyst is the competitive carrying cost terribly asks if you think on on like top level any challenges that are going to happen from from the merge or the upgrade to proof of stick i think the answer has always been no but probably feel free to add them if you have like other thoughts well the shift to proof of stake is obviously very interesting beanstalk is a proof-of-stake system and so it's very hard to say anything against proof-of-stake in general uh although the specific implementation of proof-of-stake and how the the distribution of youth will change over time is something that is perhaps imperfect but in terms of improving the improving the scalability of the ethereum network obviously the merge is a major step in that direction and we're very excited about the development of ethereum so that's that's the macro level thought uh maybe publish wants to hop up and give his own thoughts uh if if he's so inclined uh but the [Music] the challenges and how they will impact beanstalk don't think don't think there's going to be anything too [Music] too material because of the fact that there is no b e pool and therefore the the only beanstalk that will retain value is dependent on usdc and usdt so it seems like that's not going to be too sophisticated as to what happens there and otherwise beanstalk seems to continue to be more endogenous running an edge in the cycles as opposed to exogenously influenced ones so uh for the time being don't think that that the merge is gonna have too much of an effect on beanstalk but once the b pool is rolled back out perhaps uh after the merge that'll probably happen uh beanstalk will be once again more more uh related to the cyclist of ethereum directly question from benjamin stoken and he asks will there be a market for unripe assets so something similar to the marketplace for pods but sell your unripe assets so unripe assets are erc20 tokens uh there's no there's nothing preventing anyone from selling their erc20 tokens at the moment there's no liquidity pool with liquidity for those erc 20 tokens but there's nothing to stopping people from using an order book for example in terms of beanstalk incentivizing liquidity for unripe assets there's no reason whatsoever for being stuck to do that if unripe asset holders chop their assets that limits the amount of assets that beanstalk needs to recapitalize so beanstalk would much prefer from its perspective for people that are going to leave and want liquidity to to sell their to chop as opposed to selling their liquidity and therefore it doesn't make sense to introduce liquidity pools for unripe assets but there's nothing to stop people from selling their unripe assets at the moment because of the composability of ethereum okay and the last question from turbo asks is that publius were never included or mentioned in any you know salaries or snapshots let's say why so we don't and have never taken any sort of payment from being stock farms or being sprout or the dow uh with the exception of like re-upping the the amount of money in the public wall to pay for expenses like bips and stuff on chain commits but never any sort of actual payment uh because we don't view our relationship to the dow in that capacity we're not workers for the dow we're stockholders and pod holders and we are heavily aligned with the long-term success of beanstalk and don't require any additional compensation to work on beanstalk and the hope is that as more and more people have meaningful exposure to beanstalk uh they as being stock grows that they will just start working on and around beanstalk because of their own exposure to beanstalk without needing some additional uh salary and so that's we already feel like we have meaningful exposure where this is the only thing we want to spend any time on and the only thing our brains work on and obviously it's amazing that the dow has created and minted beans in order to retain talent like some of the people that are currently working on beanstalk that are really amazing and over time the hope is that they'll have enough bean exposure one way or another that they don't need to continue to get uh paid by the dow so we believe in leading by example and ultimately uh we feel like if being stuck is successful we will be highly highly successful and therefore there's no need to collect any additional salary or tax the dow in any way for our work and james follows up if publius would ever consider building or owning a business on top of being stuck certainly and i think that that if anything is what it means for publius to really disappear right for us to just become private individuals that are part of the beanstalk ecosystem running businesses and building things on top of beanstalk that's the goal so at some point beanstalk does become done i think that what and furthermore the experiences that come along with building businesses on top of beanstalk will help influence the design of beanstalk right so there's there's there has always been from the time being stock was deployed this beautiful tension between being in deployment and learning and experimenting and upgrading the protocol so we're we're here to support lots of different businesses that are being built on top of beanstalk and we hope to also participate in that from a private capacity so we really do believe that the transition towards a private role is it's not going to happen overnight the point is it's they're likely to happen kind of symbiotically over time where we'll still be having classes and talking with the community as publius but the goal really is to start to just uh exist within the beanstalk ecosystem economically so it's a little bit of a fine line but i think that the goal for anyone that's contributing to be in stock whether it's through bean sprout or bean stock farms the goal should be to try to figure out how do you start a business on top of this thing how do you uh how do you create real economic activity on top of this there's a real like nice cushion that comes along with the beanstalk senior ridge and it's something that we that we want to encourage everyone to participate in and uh build on top of you know but i guess encourage people to participate in buy building on top of and we want to be just as much a part of that by building on top of being stuck as we are top a part of building beanstalk itself so i think it's all really symbiotic at the end of the day and the beanstalk economy isn't going to build itself you know but uh hopefully it will be built by lots and lots of people and we'll just be one small part of that but uh nonetheless uh it's it's not they're exactly what all of that will look like but uh it over time it will become more and more clear and an open and accessible and permissionless protocol will facilitate them on open accessible and permissionless markets so definitely look forward to to that and seeing it grow and hopefully even participate in those markets benjamin stoken asks well maybe just to add on to that if we go back to the being in the silos the beta building businesses on top of being the silo is the alpha so that's that's the name of the game and uh whenever beanstalk is uh i mean alpha hunting is is uh who doesn't like alpha hunting so that that's uh you know it's all good lacking the terms uh forming there so benjamin stoken asks um what publius thinks about the requested compensations and he he mentions i think the the back pay or the retroactive payment but maybe you can expand this question to to the back pay and also to the proposals that were already are already out for for contributors i mean we're probably going to decline to speak on specific proposals uh yeah we probably think it makes sense to refrain from commenting on specific proposals just to not engage in the real politics with regards to the back pay uh but what we would say at a high level is that there were a lot of there were there were a lot of people that did stuff to help beanstalk get up and running but there were also a couple of people that were really really important and spent all of their time and all of their energy and all of their brain getting stuck back up and running and those people really do deserve to get uh to get compensated uh really nicely i think now what is deserve what is nicely i think one of the nice things about the structure that beanstalk farms ultimately went with was that it was up to each individual to evaluate what that meant and then there was also this like week-long period where people could in a like a market setting perspective see what other people were saying and commenting and proposing and adjust their own proposals and we are where we are so i think the market has set itself uh from our perspective we're gonna refrain from commenting on any specific proposals but would say that uh for the most part they all seem very reasonable given given what's gone on and uh if anything the ones that are unreasonable in our our minds are not the ones at the higher end of the pace spectrum it's more some of the ones at the lower end of the pace spectrum that it's unclear what work was actually done if any but some people still want to get paid and you know what are you going to do about that so i certainly don't have anything to comment on negatively about the people asking for a lot of pay those people are awesome and we're we'll be eternally grateful for all the work that they did thank you for the answer publius and maybe we can touch on a bit on on the way uh of of how the back pay were uh proposed and that that happened to be so that no one initially it was like the bfc were the ones who were going to decide how the unripe beans uh to be uh like distributed and and we we thought that that was inappropriate and that it was more appropriate for every for each individual contributor to ask uh you know for for the or have their ask and then let the dow uh in general uh vote uh uh and choose we hear all points and understand that this may not be perfect but i think after you know long discussions we thought that this was the most appropriate way to to to handle this okay i see alex typing we'll see if that's a question or a comment so alex asks um you know more about how businesses could be built on top of beanstalk uh and and maybe he he doesn't expect an answer now he's he says that this could be more of like a conversation to later and it's a follow-up on on you know this question also asked in the podcast where he says like maybe people don't understand what is positive carry and how how can that help you know change businesses or help motivate to build new businesses on top of bean stock i guess you don't have to have an answer let's let's go through at least one example now and maybe we maybe we get into more but the the first thing and it's it's one of the as a starting point the different businesses that you'll be able to build will increase as the sophistication of the derivatives and structures on top of beanstalk increase so there's a complementary relationship between the software and the actual businesses so the starting places if you look at root as a great example that software that we think is going to enable some pretty cool businesses that can compete with traditional businesses let's take vegas as an example so vegas is something that crypto's been trying to disrupt since 2015 or so since augur came out and the maybe it was in 2015 i don't i i wasn't in crypto at that point so my memory is not perfect on on those dates but the concept is there's since augur was implemented in maybe 2017 uh there still hasn't been any on-chain betting in any significant size in any meaningful way and the question is why and there hasn't been any sports betting there hasn't been any politics betting there's no betting why uh the reason and it's it's such let's talk about before we get into the problem it's such a right market for disruption everyone's so excited to disrupt it because you go to vegas to bet on nfl sunday and you're literally both sides of the bet are paying 10 percent minus 110 plus 110 the is that it's like literally a crazy spread and so the point is how can a bit what is the business the business is vegas how are you going to compete with vegas well what is vegas vegas is a book a sports book so there's this software that allows prediction that allows betting silo assets deposits based on an oracle that's going to settle just like vegas so you're going to get the outcome just like vegas is going to have the outcome of the bet and the question is now who's who's keeping a book so the business is keeping a book so you're going to have you're going to have assets in the silo and you're going to be offering a spread on bets on nfl sunday so vegas's bed is offering -110 plus 110 if you have silo assets you can offer plus 101 minus 101 plus 102 minus 102 that market and margin is going to get pretty thin but the point is there's still va there there's still a spread there to collect and that's that's one example of a business that currently exists off-chain that on-chain businesses have been unable to compete with in a decentralized fashion what are you gonna use usdc and pay eight percent a year to make markets on auger or poly market you can't do it and it's not decentralized so this is for the first time the way to build a decentralized first business where people can just make markets and the business is running a book on top of it so there's lots of other businesses real world businesses that are not just betting and speculative that can be ultimately integrated on top of beanstalk but just to give one that's a concrete example of something that in the not too distant future is a business or multiple businesses that can run on and compete on top of beanstalk and compete with vegas is it is it accurate to think that a protocol or a system like beanstalk allows not only fearless uh uh you know protocols or businesses but ones that also are without an opportunity cost well there's no opportunity cost associated with participating in that market and therefore it's likely to attract with quitter now the thing to note is that the liquidity that exists on top of beanstalk is can be used for lots of different things and so the software ultimately being proposable such that you can do different things in an efficient fashion is really the name of the game when it comes to designing things on top of beanstalk and so that's something that i think we've started to think more about there's obviously still work to be done on uh improving bean stock at the core level but now as we start to think about what are what are the real things that are going to exist on top of beanstalk what are the businesses that you can build on top of beanstalk we're putting on that entrepreneur hat and trying to figure out what to build on top of beanstalk it's very evident that the real thing that will determine just how competitive business is built on top of beanstalk can be with traditional businesses is how capital efficient you can get things on top of the silo so if you're making a market on the the giants steelers game uh not for the super bowl like we were talking about with dcf god but just for week one uh if you've bought the giants uh and then sold the steelers side i guess bought the giants and then sold the giants so you're now hedged you need to be able to use that position again to now bet on another to bet on the patriots and if you sell the patriot side you and i don't mean selling the position itself i mean like you you're making a market on both sides such that you hold a position on the giants and you hold the position on the steelers where both positions will pay out one of them will pay out depending on who wins the combination of those two positions then needs to be able to be used to make other markets and so really maximizing the capital efficiency and the structure of every market that is built on top of beanstalk that can be done in a really fine-tuned way in order to maximize just how competitive business is built on top of beanstalk can be and that's what we're trying to think think about at the moment how to maximize the capital efficiency markets on top of on top of markets and in that example it's that's on top of bets okay i think we're at the end of the town hall chat questions or questions in general as always thank you publius for taking the time and everyone else for for joining us and we'll see you next class thanks mod