📖

Beanstalk University Class #42

Date
September 13, 2022
Timestamps
0:00 Introduction • 0:20 EBIP-2 • 7:30 Updates on the BEAN:ETH pool • 7:55 BIP-24 • 9:30 What are the low-hanging fruit that can be built on top of Beanstalk? • 13:23 Is there going to be any effect on Beanstalk with EBIP-2 • 15:58 When will we see on-chain governance? • 18:03 What was the original idea behind the Stalk System? • 23:53 How will the DAO attract more liquidity to the BEAN:ETH pool? • 27:00 Will the volatility of the BEAN:ETH pool provide fake demand? • 29:08 What is going to be new with the Pod Market Place V2? • 32:11 Will the Pod Market Place turn into an AMM? • 35:16 The Tractor • 36:00 Is the Beanstalk AMM the first of its kind? • 37:02 Beanstalk AMM price oracles? • 38:00 Does semi-fungibility affect liquidity in any way? • 46:40 Will fungible deposits compete with deposited assets? • 51:44 Where does the US dollar’s endogenous value come from? • 56:18 Closing remarks
Type
Beanstalk University

Recordings

Notes

EBIP-2 (Emergency BIP to protect against multi-block MEV)

  • In response to an issue brought up during last week’s DAO meeting, involving a significant increase in the potential of multi-block Miner Extractable Value (MEV).
  • Unclear how a miner could extract profit, but they could manipulate time weighted price oracles by having control of validators on consecutive blocks.
  • The long term solution is to use exponential moving averages at the pool level, which is something that wells will consist of when Beanstalk native AMMs are implemented. In the short term, in advance of The Merge what has been implemented is a cap of 1% of the deltaB in the Curve pool, to limit the Beans or Soil minted in a given season to 1% of the total Bean supply.

Updates on the BEAN:ETH pool

  • Still probably a few weeks before it is ready for Halborn to audit.

BIP-24

  • Waiting for a final audit report from Halborn.
  • A Root developer has been working with Halborn to implement proposed fixes.
  • As part of Halborn’s audit of BIP-24, they also found the vulnerability in the chop() function.
  • After the final report, which is expected by the end of this week, nothing will be preventing the proposal of the BIP. Hopefully it will be formally proposed by next week’s class.

What are the low-hanging fruit that can be built on top of Beanstalk?

  • Our hope is that by building out a Best in Class DeFi tech stack, that it will facilitate a really wide variety of use cases of Beans and the tech stack. We don’t want to overprescribe what those use cases are.
  • A couple examples are betting markets with Root, or a Bean debit card.
  • Everything will be low hanging fruit at some point, and Rome wasn’t built in a day. What is low hanging fruit today is the Beanstalk AMM, CDPs, and money markets. What will be considered low hanging after that’s all built is a different thing. There’s only so much low hanging fruit at any given time.

Is there going to be any effect on Beanstalk with EBIP-2

  • There is a time-weighted deltaB calculated for each whitelisted pool every season. And in the case of the BEAN:3CRV pool (currently the only whitelisted pool), the deltaB oracle is manipulable through multi-block MEV. The short term solution is to take the deltaB calculation from the BEAN:3CRV pool and cap it at 1% of the current Bean supply. For any given season the Bean mint or the Soil mint will be capped at 1% of the current Bean supply.
  • In extreme cases where there is a change in demand greater than 1% of supply, it may take multiple seasons for Beanstalk to print enough Beans or Soil to return the price to equilibrium.

When will we see on-chain governance?

  • Something that we will continue to think about work on in Q4, but it hasn’t been the primary focus recently.
  • It will happen in multiple stages over time.

What was the original idea behind the Stalk System?

  • We saw that with Empty Set Dollar (ESD), there was no incentive to continue to provide liquidity when the price fell below a dollar, which created a ton of downside reflexivity. So the question was how to encourage liquidity providers and Bean depositors to stay in the system, in light of the fact that Beanstalk can’t print more Beans when the price is below $1.
  • The next logical step was to introduce some opportunity cost to leaving the system, when Beanstalk can’t reward users in Beans, by introducing some other asset which must be forfeited.
  • It was clear that the opportunity cost needed to increase over time, but that it shouldn’t increase concentration of ownership so there is no centralizing effect. Linear growth creates a nice structure that accomplishes those goals.

How will the DAO attract more liquidity to the BEAN:ETH pool?

  • The same way it attracts liquidity of any asset: by offering Stalk and Seeds for deposits in BDV of that token in the Silo.
  • Moving some of the Barn Raise liquidity over to that pool would require a lot of overhead for limited long-term benefit, in the absence of some kind of generalized conversion.
  • Beanstalk has a good amount of liquidity for the current Bean supply, so there’s no real rush to acquire more liquidity at the moment.

Will the volatility of the BEAN:ETH pool provide fake demand?

  • The premise is that the underlying volatility of ETH will create improper deltaB readings in the BEAN:ETH pool, which can be seen in historical data.
  • A lot of times the cause of this is the friction caused by trading fees, which is something that will be eliminated with the implementation of the Beanstalk AMM. Traders will be able to arbitrage profitably with a much tighter spread and eliminate the impact of ETH volatility.

What is going to be new with the Pod Market Place V2?

  • Currently the pod marketplace only facilitates static orders, whereby if you are bidding for pods an order is a price and a maximum place in line, and if you are selling pods an order is the pods you want to sell, the price, and a minimum place in line at which point the listing becomes invalid. This results in static, fixed prices.
  • V2 of the pod marketplace will introduce the ability to bid on pods on a curve, where instead of stating a single place in line and a price, you’ll be able to construct a dynamic pricing curve over the entire pod line with a very high amount of customization. So you will be able to take a single Bean, and bid all across the pod line at effectively infinite prices.
  • Similarly, when selling pods, you will be able to list them not just at a given price, but at a variable price depending on their place in line when they are sold.
  • The upgrade should create a much deeper market on both sides of the market.

Will the Pod Market Place turn into an AMM?

  • The idea of a hybrid between an order book and an AMM is exciting, but it is unlikely to come in the near future due to the amount of work it will require to implement in Beanstalk.

The Tractor

  • The idea is that in the future you will have the ability to automate market operations through Beanstalk via a generalized approvals and permission system, which is tentatively being called Tractor.

Does semi-fungibility affect liquidity in any way?

  • This is the first problem that Root is tacking, in the form of the Fungible Deposited Bean Denominated Value (FDBDV) token.
  • BIP-24 introduces changes to the Silo that allow Silo deposits to be wrapped with a smart contract in such a way that it retains all the benefits of a Silo deposit, but with all the benefits of an ERC-20 fungible token.
  • The plan is to have a single wrapper for all BDV deposits, regardless of the underlying whitelisted asset. There will be fungibility across all Silo assets.
  • When redeeming a fungible BDV token, you will be able to choose what assets you receive. When creating the token, you will receive an amount of the token that is a function of the Stalk to Seed ratio of the existing wrapped tokens and the Stalk to Seed ratio of the deposits you are wrapping.
  • Due to inefficiencies in the conversion process that will ultimately accrue to the fungible deposit pool, holding the FDBDV token may earn a higher yield than the Silo itself.

Will fungible deposits compete with deposited assets?

  • Demand for fungible deposits will get passed through to demand for regular Silo deposits, so there won’t be any loss of net demand if the demand for fungible deposits is higher.
  • It’s unclear whether Beanstalk will want to incentivize the trading of the fungible BDV token in a liquidity pool, or whether it would make sense to trade against a non-Beanstalk asset or a Beanstalk asset.
  • The best way to implement decentralized governance using the fungible deposit contract is still an open question.

Where does the US dollar’s endogenous value come from?

  • The name “fiat” means a decree or command, which implies that the value comes from the requirement to use it. In practice, economically speaking, much of the value of the dollar and its ability to maintain a stable value comes from its credit.
  • With a fractional reserve, there is some creation of endogenous value in conjunction with the exogenous value from the collateral that there is convertibility to. FRAX is an example of this. But it does come at the risk of a bank run.

Transcript

how's it going Publius it's going mod how are you I'm doing well um before we open the the floor for questions from the audience I wanted to maybe if we can start with the recent announcement that we had today on the emergency dip can you maybe probably summarize to us what is this dip and why was it necessary sure so this was something that was brought up during the Dow meeting last week which is that uh it was brought to our attention that after the merge which is expected to happen imminently this week uh there is a a significant increase in the potential for perhaps the introduction of but certainly an increase in the potential for multi-block minor extractable value which in in the case of Beanstalk it's unclear how the miner would extract value to profit but it is clear how the miner could assuming that they had uh knowledge that they were uh able to uh effectively because of the the post merge uh separation between the block producers and the block miners uh if there's consecutive blocks where the proposers are known and are either the same or coordinating they can manipulate uh time weighted average price oracles on the blockchain because the nature of time-weighted average price oracles particularly uh arithmetic based ones are that they if you have a single block where there is a very disproportionate price that manipulates the read for the entire uh time period over which you're sampling and therefore the fact that miners can without risk to themselves because they control two consecutive blocks they can manipulate the price in one of those blocks arbitrarily and therefore effectively arbitrarily corrupt uh traditional tiwab Oracle so there's the long-term solution is the implementation of exponential moving averages uh at the at the pool level which is something that the wells will consist of when Beanstalk native amms are implemented but in the short term ahead of the merge uh due to the potential risk here which again it's unclear how how if at all it would have been profitable to do nonetheless it's a question of the validity or the risk to being stuck of the the minting calculation uh and the potential for it to be manipulated which someone might not be able to profit directly but could simply manipulate Beanstalk which is something to avoid uh the solution that was implemented is the introduction of a cap of one percent of the the Delta B in the curve pool only uh there's a cap on the Delta B for each season uh the beans or soil minted based on that pool of one percent of the total Bean Supply which greatly minimizes the extent to which the exposure to this multi-block Mev would expose be in stock to vulnerabilities uh because there's only so much that uh that someone who's trying to manipulate Beanstalk can manipulate it so it would be uh tapped at one percent per season and that is it's not a perfect solution to some extent there's nothing that could would is guaranteed to prevent this from happening at some rate but if it did happen at that rate the expectation is that a beanstalk at some some some rate that's not every season being stock could likely handle it uh for certainly for a couple Seasons until Beanstalk was paused if it was a big issue uh or more generally the cap could just be lowered but but the hope is sooner rather than later uh because of this problem to move uh the vast majority of Beanstalk liquidity to be in stock native amms that have EMA native oracles that are resistant to multi-block MEP so that was a little bit of a long-winded answer but uh e-bips are not something to be taken lightly and uh it was something that uh the BCM spent a lot of time on uh discussing whether it was worth it uh or uh of you know whether or not it made sense to implement this an ebip so uh at the end of the day these These are this is one of the benefits of having some aspect of centralization in the governance process uh from our perspective it would obviously be better to have everything run uh completely on chain and permissionless uh and kind of live and live and die by those consequences but there are risks associated with that so the goal is to move back towards that Unchained governance system in which case perhaps things wouldn't have been able to move so quickly although there's always the potential for a super majority vote uh in certain emergency situations so uh have been rambling a little bit here but this is this was a an important an important upgrade to the bean stock Delta B calculation this was a good summary uh and I agreed on the urgency of it just to summarize it and maybe with an example the cap is not on the Delta B uh sorry the cap is not a function of the Delta P it's it's a percentage of The Bean Supply so if we're saying the bean supplies 30 million one percent of that is 300 000 it means anything below 300 000 being so could be able to Mint it if the Delta p is higher than that this is when there is a cap is that correct exactly it's hopefully a new a new uh or an updated white paper to reflect that will uh we'll be live in in the in the near future yes and all in all this is a short-term Solution on turbo hopefully move um to uh to one that you know uh is resistant to the multi-block attack let's say uh and another thing worthy noting is that it was incubator brought the Dallas attention uh to this topic and and Beanstalk Farms felt that uh syncubate uh rightly should be awarded for that and we encourage everyone else who thinks or sees or you know come across anything that benefits uh be in stock or thinks it does that to to approaches and as the saying says it takes advantage all right we're going to try to do things a little bit differently this class and and that is I want to encourage the audience to ask some of these questions before you know uh I start some of mine and maybe I'll give it a minute or two uh to have you know others uh start with the questions and then and then we go with that so I'm going to you know be quiet for that for a little bit and then we'll continue class from there all right Harris starts with the first question any updates on the Bean if pool on timing not exactly sure in terms of a substantive update on on when we can expect that to be ready for halborn to audit it's still probably at least a few weeks away and then photos on bip24 maybe Mr manifold would have an update so bib24 is we're we're just waiting for a final audit report from halborn there was a back and forth between uh root and halborn or I should say the root Dev that was working on bib24 and Melbourne uh to implement the fixes that they proposed uh as we know that as part of their audit of bib24 they also found the issue that was fixed by ebip1 uh and maybe it was ebit0 I don't remember which the one that removed the chop and so once the final report is in from Melbourne which is expected end of this week There's no nothing uh preventing the formal proposal of bip 24. so that's uh that should be in the pipeline and hopefully before next class that dip is uh proposed formally on chain okay that's the awesome typing maybe with a little bit for this question yeah and we would just encourage people to type up their questions uh in the most recent couple of classes uh Mod's been generous enough to lead the discussion with a bunch of questions of its own uh but we want to make sure that there's everyone feels like if they have things that are on their mind that they're all being addressed so definitely shoot uh all of your questions in the town hall chat yeah I have also collected a few questions from others on the other channel and we can start with a question from elastic Bean um and the question says what are some of the low-hanging fruits or ideas in your opinion that being would like to see built on top of it apart from the amm the money market and cdps well it's funny to talk about money markets and amms and cdps on top of Beanstalk that's that's really part of the defy core Tech stack if you will so when the question is what what are the low-hanging fruits for things to be built on top of Beanstalk uh the question is can be broken down in a couple ways one might be what can be built on top of the entire Beanstalk Tech stack of amm's cdps uh and money markets uh which are are still a ways away obviously but if if we're ignoring that uh the hope is that there are lots of different things that that will facilitate uh such as the creation of decentralized betting that's like root Etc so there's protocols that can be built and then we saw in some of the discussion in response to this proposals for for example uh a being debit card the reality is that to some extent we don't want to over prescribe what the desired or targeted products to build on top of Beanstalk are I mean to some extent we can we can pontificate on ideas but the real hope is at least from our perspective we're hoping to build out a Best in Class as we said D5 Tech stack that will facilitate a really wide variety of use cases of of beans and this Tech stack all facilitated by the positive carry of beams so don't want to over prescribe but obviously if if there's a little bit more direction as to the type of business are are you asking about Protocols are you asking about businesses there's lots of different things that can be built on top of the tech stack so maybe a more specific question can get a more specific answer but generally lots of different stuff yeah I think the question was about what kind of markets maybe your utilities can be built on that but I agree with you that these ones are going to facilitate low hanging through its um to be built on it Deckers maybe asks a follow-up on on the t-wap not that you're up on the price I would just before we move on I would just comment that everything is a low hanging fruit at some point right so Rome wasn't built in a day and the concept that right right now the low-hanging fruit to build is the Beanstalk native amm and Beanstalk native betting buckets uh built on top of that amm that's being built so there's there's lots of you know another low hanging fruit right now is to build a money market or a CDP uh and and hopefully in a way that where all of the different systems are coordinating with one another and somewhat integrated that's the current low hanging fruit what that's what we spoke about I think last clock uh what the low-hanging fruit becomes if you assume that that's all built is a different thing so uh there's only so much low hanging fruit at any given time but the hope is that uh instead of when the low-hanging fruit is picked now there's no more low-hanging fruit instead it facilitates like a rising tide such that more fruit becomes slow hanging if you will a little bit ridiculous of a metaphor but it kind of works yes I think you you improve your tool to be able to pick I guess you know more fruit that's now considered low hanging so Deckers follows up on the Oracle issue that we discussed earlier and I believe is not he doesn't understand what does it mean by one percent of supply he also asks you know besides security is there going to be any impact on on being stuck do you have any comments there uh Publius so to try to to try to clarify each pool that is a part of the Oracle white list which currently just consists of the beam three curve pool uh there's a calculation of a Time weighted average Delta B for each of those pools on the white list over each season and in the case of the bean three curve pool which again is currently the only pool on the white list that uh the time weighted average Delta B Oracle is now manipulable through multi-block uh Mev so the the short-term solution to that until the Beanstalk native amm can be deployed on chain and liquidity can be migrated over to it where it has a a native Oracle that is resistant to multi-block Mev the concept is to take the Delta B the time weighted average Delta B calculation from the beam 3 curve pool and cap it at one percent of the current Bean Supply so the the concept is that at most any given season the bean Mint or the soil mint will be capped at one percent of the beans the current Bean Supply hopefully that clarifies things and to answer the bit of if there is any other impact uh I I believe the other impact would be if someone buys more than one percent of the mean Supply from the liquidity pool then the price of being will be above one for some time yeah you're you're correct so there the the concept is that if there's a significant move change in uh demand for beans such that it's greater than one percent of the total Bean Supply uh it may take multiple seasons for Beanstalk to mint enough beans or mint enough soil in order to return the price to equilibrium so in in extreme cases it does mean that Beanstalk might be a little slower to move uh but as as evidenced by the the ramp up schedule post replant that's unlikely to be a a problem for the system wouldn't be being stuck's first rodeo all right Canadian Bennett asks when will we see on-chain governance and what will that version look like that's a great question the frankly don't have a good answer for either question of what exactly it will look like uh or or when it will come uh the hope is to to Really spend some time working on what that might look like uh over over the course of Q4 but that's that hasn't been something we've spent a lot of time on recently and therefore don't have a lot to comment on at the moment other than hopefully it will look like something relatively similar to what looked like what what Beanstalk governance was performing totally permissionless and and Rel relatively fast in response meaning that being stuck can update itself uh quickly in certain instances but it's generally resistant to change uh those things are are certainly features that will be prioritized prioritized as as the on-chain governance system is designed or re-implemented but the the specs are are unclear at this time I think one thing that is very clear is that the transition to on-chain governance will happen in multiple stages such that uh there is it's unlikely to be a a full transition back to totally permissionless governance and instead is probably going to happen in multiple stages over time and I guess one thing that will be there hopefully with launching governance is a set of so setup will be um hopefully implemented into being stuck when uh there is a BCM and then um once we move to action governance The Hoppers also have set off and we expect setup to submit that you know sometime soon sweet red beans asks that the longer he is around Beanstalk the more he appreciates and understands the design of the stock system and then he asks can you speak to the original inspiration behind the decision to decide to design the system to have stock that linearly inflates so the if you at the time we we ESD and we saw that when the price was below a dollar there was absolutely no incentive for anyone to continue providing liquidity for ESD and given that the provisioning of liquidity is really what was creating the value for the currency the lack of an incentive to continue to provide liquidity when the price fell below a dollar created a ton of downside reflexivity so the question the question at hand that was being answered was how can Beanstalk which can't mint more beans when the price is below a dollar because there's already too much Supply how can Beanstalk uh encourage liquidity providers and bean depositors to stay in the system and that's the the first question so there needs to be some sort of reward uh for staying in the system but it can't be beamed and the the The Next Step I guess and I'm trying to to think back to how it was created the next step in the logic is really to try to introduce the the realization that you need to introduce some opportunity cost in order to leave the system so Beanstalk can't can't pay you beans but it can create opportunity costs in some abstract capacity so then the question becomes how do you create opportunity cost well you need some asset that you need to Forfeit uh and then the question is well what is that forfeiting system look like or how does that opportunity cost system get constructed and it was clear that the opportunity cost needed to increase over time but then I guess the next question is how to make sure that the this opportunity cost structure this incentive structure doesn't disrupt the distribution of beans meaning one of the the keys to Beanstalk is to have a a low Ginny coefficient a low ownership concentration of beans and so there's a need to ensure that uh however this opportunity cost is being created that there isn't some sort of centralizing tendency to the to this incentive structure and so if you look at how linear growth Works in practice uh it it creates this nice structure that we've spoken about before where even if the opportunity cost that I currently face is X which is a bonus because I've been I've been in The Silo for for X period of time or something that corresponds to act uh if you now come in The Silo today I'm sure I've got an advantage of X over you today but in another X period of time I'll have 2X and you'll have X and in another X period of time all of 3x and you'll have 2X so the relative benefit for older participants decreases over time so in practice it really becomes an individual opportunity cost as opposed to a system-wide opportunity cost and that's something that's nice about the linear growth of stock NOW one thing that we should comment on is that and this is something that we actually owe mod the idea to mod uh is that the it may make sense I don't know if mod came up with the idea originally but he brought it to us uh was that the there might be some point at which it makes sense to maybe it was something that we discussed last class I don't even remember uh but it's it's that at some point it may make sense to limit the amount of grown stock uh uh grown stock per per beamed an eliminated value and that's that's interesting uh particularly over longer periods of time like let's assume that Beanstalk gets around for a hundred years if if someone has a deposit that's 10 years old it does become a significant challenge to to make it such that you know a newer deposit or actually is treated the same way you got to wait 50 years 100 years before you're really similar so there is a an open question as to whether it makes sense to introduce a cap or whether to maybe make the curve logarithmic uh there's a a lot of different questions so uh but but we appreciate the kind words and nonetheless think the system can be significantly improved yeah we did the discuss it last class and I think one of the challenges uh we mentioned there was it may lead to some friction or inefficiency in converting given that there is no incentive anymore to you know go to the pool with the higher seats another idea uh maybe we briefly also discussed it uh um separately was to bring down from instead of two and four seats to one on two seats so they still grow but they don't grow at that fast over it I think that's where the idea for a log comes in instead of a hard maximum such that there's a continued increase in Grown ingrown stock from seeds but nonetheless it's in uh too much all right Josephine asks how would Beanstalk attract more liquidity to being explored once a slice with the dial considered moving some of the barn raise funds to that pool well in general not really sure we're a fan of the premise of the question which is how would Beanstalk attract more liquidity to the beneath pool how about just attracting any liquidity it'll be the same way Beanstalk attracts liquidity uh to any pool which is offering stock and seeds for deposit and bdv of that token so uh would the Dow consider moving some of the barn noise funds to this pool in theory anything is possible but not sure that's I'm sure not to speak for uh for for the devs but would think that there's probably some significant overhead uh associated with doing the accounting for the lp tokens with that without the introduction of generalized convert between them for unripe beneath LP tokens which is something that the Dow could decide to implement but as we've discussed would be a significant uh would require significant overhead with with limited long-term benefit and if it's something that Dow wants to do it you know so be it but it'll come at the the cost of of lots of other developments so not sure it's something that will happen uh but it's something the Dow should definitely discuss and uh again not sure we're a fan of the premise of the question about attracting more liquidity being stock already has a a decent amount of liquidity at the moment relative to its current Bean Supply and there's no uh there's there's no rush to attract significantly more liquidity per se genio asks um or wants to clarify is that right now the stock system has some sort of a limited approach or some sort of a limit every seed produces or generates one over ten thousand stock every season um I think what you're referring to is that the rate of increase of of stock per seed uh you know approaches or or decreases in general because you know acid will will generate so many stocks so you know one over ten thousand every season is not as much of an increase as it was uh early on however uh it is it is a linear increase or it keeps increasing um every season by the same rate or the same amount think of it then um I think if I'm not mistaken maybe the bgt governance talking is similar to stock it can only be um or you can only have it if you stick if you stick this token so similar similar to how you can only get stocked by sticking beam you can advance can't wait to be able to bet on root all right Alex asks when the volatility created by the bean East pool just create fake demand well the premise to this is that the underlying volatility of eth will create uh improper readings in the bean eat pool it's worth saying that historically this was certainly the case if you look at the beneath uni swap pool there's a lot of like if you look at the all-time market cap chart on the website uh for example you can see the each volatility in the market cap chart up until the exploit and post export there is no eth volatility exposure to the being priced and therefore to the market cap and you can see there's basically no volatility in the market cap uh season to season so that it's unclear whether that is fake or not but the cause of it is most often the frictions associated with the trading fees in the amms this is one of the reasons why the Beanstalk native amms are being implemented without any fee such that there won't be any frictions associated with arbitraging this pool to its correct price such that there should be a minimization in what you call fake demand or price oscillations but it's really just uh an imperfect reading per se as a result of uh underlying volatility but the extent to which it's imperfect is largely minimized by the fact that there's no friction around trading fees on on the on the Phoenix stock native AMF I think the maybe the fake demand description assumes an equal increase and decrease in the Press of of Youth uh but you know it may increase more than it decreases or the offices okay that's a great point I wanted to discuss the Pod Marketplace V2 a little bit um modern specific is um you know on how people will be able to build or sell um their pods so we've discussed previously that there is going to be like some sort of a pricing curve can you maybe summarize um what that will be and how would it be used currently the Pod Marketplace only facilitates static orders whereby if you're bidding for pods an order is a price and a maximum place in line and if you're selling pods uh it's it's the pods that you want to sell and the price and then a Max I guess a minimum place in the line at which point the the listing becomes invalid so static prices that are fixed at at a given price the Pod Marketplace V2 will introduce the ability to bid for pods on a curve or instead of stating a single place in line and price you'll be able to not just put a series of points uh that are uh that then form a curve you'll be able to actually create a piecewise curve uh that each piece is a a curve in and of itself that you can construct to build dynamic a dynamic pricing curve over the entire pod line with a very high amount of customization so you'll be able to take a single bean and bid all along the Pod line at effectively infinite prices uh with a very high amount of customization and similarly when listing a plot for sailor pods for sale you'll be able to offer the the pods not at a given price but at a price based on their place in line when they are sold such that you you don't don't ever have to update your pod order assuming that the price that you want for a given place online doesn't change when you think about depth on the market this should on both sides of the market create a much deeper market and a much better user experience when it comes to coming to trade pods and we think the concept of these piecewise curves being used to create orders is a really uh exciting primitive being brought to the Beanstalk ecosystem and would give a really huge shout out to maltese for its development it's really cool Tech I agree I think I think there is a lot of cool ideas behind that and I want to build up on that maybe and take it to the amm so vehement that we're thinking about right now is going to have or at least the first one was going to be deployed it's going to have some sort of a bonding curve which is you know maybe similar to you know swap V2 or curve a pricing I don't know if you call it a bonding curve but a pricing curve a pricing curve um can we then implement the same idea in the Pod Marketplace and what is the idea to implement the same concept of the Pod Marketplace into the NM so that you know you'd have some sort of an order book and then people will be able to price um their conversions or their bids across across the price or across a curve uh in theory that is something that certainly could be done uh from our perspective it's very exciting the concept of implementing effectively in amm when it comes to trading against the pool but from a user perspective then you have a lot more customization in terms of your exposure that's a really interesting way to uh to implement an amm but to do so within Beanstalk and The Silo would require a significant amount of upgrades to be in stock so it's not something that is likely to be doable anytime in the near future but it's certainly an idea that that we should continue to discuss and play with which is the the the the validity or the benefit of implementing amms that are effectively a hybrid between an order book and an amm because of the ability to place orders that are on these complex customizable perks maybe complex isn't the right way to to describe them but polynomial uh piecewise functions I'm thinking of one use case or one way that maybe this could be used could it be that like a user or the site or a stockholder could then like have some sort of you know an auto convert so at that price then sell at that price then bid with with that main effect have the same the same result so Auto convert is something that would certainly be more easily facilitated by something like this but it would actually require that's another thing that requires additional complementary infrastructure but it's it's definitely uh it's all related but but hard to answer that exactly to be to be frank I haven't thought about that one okay and I know I know we're addressing uh a lot of what we're talking now you know hypothetically so I want to build even one more layer on top of that and be like okay we have multiple pools for all of them I don't or multiple Wells let's say on that amm that has some sort of an order book do you see a scenario where you can have some sort of like an automated portfolio manager so you know when the price of that happens then it convert this to that or sell this to that so somehow I can manage my way to you know balance my portfolio according to my price preferences so uh I wish Publius were here to talk about tractor because they've been getting really excited about tractor uh but uh the the short the short I mean maybe it's better to just wait till till I did the DOW meeting or next class when they're around to to talk about tractors they they've been particularly excited about it but the the short answer is yes uh in theory you'll be able to have lots of different stuff done on your behalf through Beanstalk via a generalized uh approvals and permission system which is uh tentatively being called tractor uh so it's a the industrialization of of the farm if you will okay and I don't want to oversell this I guess we earlier we spoke about you know long hanging through its uh of those of that sorts so an amm with zero fees and you know zero fees allows or these to even like lower gas fees and then that would have some sort of an order book on that can you think of of any amm that's on the market right now that can or does these these things so uniswap V3 has the ability to Place liquidity at various parts along a fixed curve with various concentrations uh but the that's not quite the same as what we're describing with the the Pod Marketplace pricing curves implemented on a on a normal amm that's an order book so it probably is a we believe it is significantly different than anything uh that's currently available and we didn't touch on the on the price oracles let's say that that will be on top uh or that I guess that's separate but it's it's an addition on that on top of that uh to be in stock well probably we we to be frank we haven't even ironed out exactly how the price oracles will work on the first version of the wells like the beneath pool so very hard to to speak subjectively about how the wells uh the oracles on the wells will work for a version of the wells that probably won't be live for for a year or something yeah I think I think there's a lot of work to be done there okay I think we're at the end of the questions why don't we give it a minute or two to anyone else who maybe has follow-ups or other questions uh to type them I think Austin is on stage all right take it away Austin hey guys uh can you hear me all right I can hear you sweet uh so who is I had a question I was thinking a little bit about um what you said on a couple podcasts recently where you can imagine a business who puts part of their balance sheet uh in The Silo and due to the positive care he's able to offer some sort of discount for accepting payment for their product or service in deposited beans rather than dollars for example and it would have to be deposited beans because at the end of the day you only benefit from the positive carry of beans when in The Silo and so uh thinking about fungible deposits I was curious if there's if there's any way in which the semi-fungibility of deposited beans hurts like uh liquidity or composability on that front because say 100 deposited beans in season 500 differ in value from 100 deposited beans in season five thousand and maybe this doesn't matter when stock becomes liquid because then those 100 deposited beans are equal but uh Curious to hear your thoughts on that so one of the cool things about open source Tech is that problems that one group has when they get solved in an open source fashion everyone benefits so this is the the first problem that root is tackling uh through the development of the fungible deposited uh being denominated value token so this is something that uh I believe Mr manifold has spoken about previously uh but this is what bip 24 is doing is it's updating the underlying Silo architecture of Beanstalk to facilitate the implementation of a wrapper contract around deposits such that there's a fungible erc20 token that uh has all the benefits of a beanstalk deposit but all with all the benefits of an erc20 fungible token so that's pretty cool and exciting and once that's done that should uh uh assuming it's done well such that it attracts liquidity uh that that should uh answer your concern yeah that makes sense is the idea to have unique like erc20 wrappers for every asset on the deposit white list so the idea is actually to have a single wrapper for all deposits denominated in being denominated value and therefore you have every deposit is really part of this fungible system and its value is in bdv so you still have been denominated value but you now have the fungibility of across all deposits so I think we need a better name than fungible deposited being denominated value FDB DV so maybe the farmers can figure something out so if I pick my generic fungible deposited bdv to The Silo what determines what's that I can redeem for it so you cannot redeem it from The Silo you can redeem it from the contract itself and you'll be able to redeem any of the any fungible deposited bdb token for any of the underlying deposits that you want uh so you can choose uh but this will I think this is the current the current idea for the implementation which is still not finalized at this point to understand it but the idea is when you're adding a deposit to the contract to receive the fungible token uh the the amount of tokens that you receive is a it's the it's based on the minimum of the ratio of bdv that you're adding and stock that you're adding relative to the the contracts ratio such that if you're adding let's say that the average stock to bdb ratio in the contract is currently uh 1.1 and you're adding a fresh deposit that has the stock to bdv ratio of one uh then you'll if you deposit uh the deposit into this contract you'll only receive uh like point point nine uh you know basically uh 10 11th of of a bdb token because it's the minimum of the ratio of the stock uh stock to seeds effectively if that makes sense I don't think I'm articulating myself the best uh but hopefully this was clear and then on the outside it's the same thing to answer your actual question list and which is that you'll be able to select whichever deposits you want to withdraw from the contract but the same logic will apply such that if you're now withdrawing a a a deposit with uh a stock to bdb ratio of 1.2 and the contract it's an average of 1.1 then you'll have to burn more fungible tokens uh per bdv than if you were depositing uh if you were withdrawing a deposit with less stock per pdb if that makes sense I don't think I've ever said this out no this makes sense um so if I take my deposit and and deposit it in this contract does that mean I'm potentially conceding my ability to withdraw the same asset that I put in given that you know it could run out basically people are withdrawing the one they want okay correction gotcha cool thanks but it's worth noting it's worth noting that every time someone adds or someone withdraws uh from the system they're unless they're adding at the perfect ratio uh they're gonna be paying some slight uh I I don't want to call it a tax but they're not going to get a perfect ratio of bdv deposited to fungible tokens received and therefore the longer the people stay deposited in this token in this contract holding fungible beans uh they'll receive extra yield effectively to eliminated in beans so being in the fungible deposited bdb contract should actually offer more competitive yield than being in the straight Silo if that makes sense so that's that's the benefit you get for the trade-off of not necessarily controlling which underlying deposit you have I'm not sure I caught that last part uh could you restate that because it sounds like you know at any given time this deposit contract will have some sort of average pdb is that fair to say correct so by depositing something with less bdb presumably you're coming out ahead and if you deposit something with more bdb you're kind of uh forfeiting that it's not it's not more or less bdb it's it's based on the stock per bdv ratio and the point is that the contract is always taking the the minimum of the ratio so in both cases uh on on entering and exiting the contract unless they're adding it exactly the ratio that the contract currently has of stock to bdv you're forfeiting some some value due to friction and then that value is basically distributed to all of the fungible token holders I think I missed the ratio part I'll have to re-listen to that but thanks for the explanation yeah apologies for not being uh more clear on this no sweat sir thank you Austin um if we could bet on Route about that we won't have a problem with Farmers finding a union to fungible deposits speaking of fungible deposits there was a question on the economics Channel by Casper Publius and his question was or their question was um word fungible deposits compete with demand for beans so let's say now there's someone that wants to buy beans or there's a limited amount of you know uh Capital that wants to buy beans and then they can either buy beans or buy functional deposits do you see that as competing or or what's the net effect to that because the fungible deposited bdb is convertible to deposits demand for beans or demand for the fungible beans it will still result in net demand for beans if if you assume an efficient market so what how that will be reflected in the super short term is unclear in terms of the difference for demand for fungible deposited being some fungible beans but you'd assume that the it would still result in aggregate an overall or a net uh increase in demand for beans whether it's the fungible deposit or pdb or or beans themselves and if we were to give an example um so let's say someone has a functional deposit that they want to sell it they can either sell it to someone who wants to buy a fungible deposit or they would have to you know convert it to beans and sell the beans and then someone wants to buy beans will buy the exact same ingredients that they were sold or just buy the fungible deposit so in effect it's it's the same or as you said you'd assume people who want the fungible deposited bdb would do whichever is cheaper right connect such that the market prices were Trend towards one another okay um yeah if there's a liquid uh particularly if you have liquid stock and Seed or then you can or or even a liquid market for deposits such that you can start to to cover cover your liabilities in a variety of ways is the idea to have the Dow incentivize liquidity for this fungible pdb token uh and if so what asset probably but unclear frankly so and it would probably make the most sense to trade against a non-bean stock asset as opposed to beans but maybe that's not the case I haven't thought about that but it sounds like that would not be part of a bit 24. oh no bib24 is just facilitating the the piping such that the the fungible deposited pdv contract can be deployed separately once that contract is deployed maybe that can be that would be the time at which the the Dow would then whitelist a certain pool or something but first you have to have the token contract got it and and would that part be considered part of Beanstalk that separate contract so uh contracts can only issue one erc20 token so it'll have to be a separate okay um One open question is around governance of that contract uh for example whether that contract should have like a similar governance system to Beanstalk whether to facilitate the for example if the contract was anytime there's a beanstalk governance vote that that contract facilitated voting uh right now the way governance Works particularly on Snapchat uh the there's only the ability to vote uh yes or no and not with a certain percentage of your roots or your stock and if this contract has a bunch of different uh uh members to it effectively that want to vote different ways there might be some additional complexities around facilitating uh the most efficient and decentralized governance through this contract but that's another uh problem that that that will be uh thought through in due time so the point is this fungible uh token contract isn't necessarily going to be ready tomorrow but it's something that's very exciting and should facilitate a lot of cool cool liquidity on top of being stuff thank you fabulous on Austin for this this question right I actually see someone typing questions so just give it a minute and see I have another question if I may go for it right uh so previous you said something that I thought was interesting in that Mark Jeffrey podcast which was that uh money that is convertible to some underlying collateral cannot be a currency and that convertible excuse me convertible money is essentially a note like no new value is created so I had a couple questions uh one how do you define currency and to uh for the US Dollars endogenous value how much of that do you think comes from the government's credit worthiness is a borrower versus uh the government's ability to enforce enforce usage of it as label tender great questions uh first I would maybe as a an adjustment to or an improvement to whatever we said on the Mark Mark Jeffords podcast or Jeffrey podcast is that uh if you have a fractional Reserve that there is some creation of endogenous value in conjunction with uh the exogenous value from from the collateral that there is convertibility to frax would be an example of that but obviously that comes at the risk of a bank run which is exactly where the name comes from it's a run on the bank that has issued these fractional Reserve banked out so that's just a comment we would make uh how to define currency uh I don't know I don't spend my time thinking about things like that uh so with regards to a question about the source of endogenous value for the US dollar I think that's a really interesting question uh and one without an obvious answer or one that we we will know for some time and perhaps Beanstalk will be something that provides evidence to one way or another to answer this question uh but if we're I mean one one thing that's interesting is that the the word Fiat uh effectively means decree or command so your question of you know is the source of the endogenous value the credit or the the requirement to use it uh well the name is that it comes from the requirement to use it uh in practice economically it would it seems to us at least that that a significant portion of the value of the dollar particularly uh the ability to to maintain stable value comes from its credit so the creation of the endogenous value May originally stem from Fiat from the dick the decree that it needs to be used uh but the the credit the a strong functioning ability to borrow from the market uh is in practice what facilitates the government's ability to create stable endogenous value so even if the credit isn't the source of the endogenous value for Fiat in the case of Beanstalk which is value proposition is primarily one of stability uh it probably would come mostly from credit but how that uh as opposed to a some sort of decree from a government to use beans which is unlikely to happen anytime soon uh so uh in the case of Beanstalk it would certainly be from the credit uh but in the case of the dollar it probably started I I mean it's unfair to even say that it started from Fiat uh but it but it's it's clearly it's clearly derived significantly from the credit make sense thanks for pontificating all right thank you Austin uh again for coming up and having these questions I think we are at the end of the equations um actually maybe not as a different one all right we have one more question so volatility and its ability to create oscillating demand okay I'm sorry about that that was that was another comment to a previous question okay I think with that we're at the end of the class probably is once again thank you for taking the time to answering these questions and thank you to everyone in the audience for joining us and see you next week