Beanstalk University Class #5
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Beanstalk University Class #5

Date
December 7, 2021
Timestamps
0:00 Intro • 5:00 How do we get back to peg? • 14:43 Do Pods harvest continuously? • 16:05 How often does Season of Plenty happen? • 18:50 How would withdrawal time decreasing affect SOP timer? • 21:00 What would be the purpose of decreasing the withdrawal time? • 23:38 What if you got returns continuously over time from sowing instead? • 32:33 Chicken and egg problem of peg stability vs growing demand • 39:20 Can sowing be considered arbitrage? • 45:00 Did sowers or arbitragers bring the price back up in the first debt cycle? • 49:32 Goals over the next 6 months • 52:53 Harvesting partial plots • 54:47 Can farmers hold up the pod line by not harvesting? • 55:15 How can we make partnerships/integrations easier? • 59:44 If you deposit Curve LP right now do you get Stalk? • 1:00:38 How soon is liquid Stalk and Seed? • 1:03:00 How would liquid Stalk affect governance? • 1:04:20 What happens if you lend out Stalk and try to withdraw? • 1:07:45 Closing remarks
Type
Beanstalk University

Recordings

Notes

We've been sitting below 1 for a fairly long period of time, given the accumulation of soil and length of the pod line as well, could you talk about economics of how the price will be stabilized if we don't get new sowing to the field?

  • At a macro level, Beanstalk issued a ton of debt over the last 2 week growth cycle. Pod line grew from 100M to 360M in that period. Valuation on the debt side has increased over 500M, current pod line values Beanstalk 700M or so. Weather came down and increased back to its highs. Inspiration for BIP 6 is that Beanstalk shouldn't increase the debt by that much during growth cycles, like it did in the last couple weeks. It should deleverage in a more effective fashion in the future.
  • Don't think it's unreasonable to expect extended periods of time below the peg, particularly when BEAN doesn't have that much utility yet. Utility and arbitragers should increase over time. Periods of time like this are where Beanstalk differentiates itself from other failed algo stablecoins. Withdrawals of bean from the silo went down the last couple days. The weather isn't high enough to incentivize sowers when the pod line is so long like it is right now. For all these reasons, we expect it to hang out below a dollar like this. Until weather goes up more.
  • Liquidity and health of the system has increased significantly over the last few weeks. Oscillations at the beginning before there are arbitragers are going to be longer and more violent.
  • Let's say someone sows 1M beans vs 100 beans. Does the former clog up the system? Are plots in distinct chunks?
    • Pods are harvested on a continuous basis.

Seasons of Plenty dynamic: does that happen often?

  • Happens not regularly but when they do they tend to happen a couple times in a row. This happened during the pump and dump in September. That brought bean from $4 back down to $1. The SOP is triggered by 24 seasons of rain. It rains when the price is >$1 and the debt level is less than excessively low (5%). This is Beanstalk's way of deleveraging during periods where it might be susceptible to apes. Makes it unattractive to buy and deposit beans while it's raining. It's like an emergency deleveraging valve in instances where there is way too much demand for bean. It worked effectively during the pump and dump. Without that mechanism Beanstalk would not be around today.

If we changed withdrawal period of 24 hours, would that affect SOP?

  • As the withdrawal time comes down that would affect the SOP timer.
  • SOP timer could be 8 seasons of rain, 16, 24, etc, but it must be lower than the withdrawal lockup to prevent inorganic pumping of the bean price.
  • Currently working on a BIP to lower the withdrawal timer over time.
    • As Beanstalk grows, we can adjust the timer more dynamically. But it was important to have it be long (24 hours) at the infant stages of Beanstalk.
  • When stalk and seeds become tradeable, that will increase stickiness of the silo.

The pod line is long and the time to return is unbounded. What if we had continuous returns, like beginning of the lines gets more, end of line gets less, something like that. It would be less intimidating.

  • One philosophical principle behind the creation of field and silo is how do we create efficient markets for soil and beans. One of main innovations of Beanstalk is the FIFO payout model.
  • I can price the debt very precisely when I'm getting paid from my sow. I can perform some calculation of the risk of Beanstalk never getting to that size. You get a series of incentives that make it clear that if I think the price of bean, weather, current length of the pod line are good conditions, I'm incentivized to sow immediately. Having pods harvest at different rates, it makes it difficult to calculate what your return would be and when it would happen.
  • Dynamic weather + FIFO creates an efficient lending mechanism. Would be hard to create a more efficient market around soil in general.
  • It's better to deposit in the silo when the price of bean is below the peg because you'll get more bean.

Long term growth needs to come from bean utility. Is there a chicken and egg problem where bean needs that external demand to get price stability and vice versa. How long can we go with only increasing weather?

  • That is definitely the chicken and the egg problem. There have been a lot chicken and egg problems that Beanstalk has solved like having 40 people in this class talking about Beanstalk :)! We wanted to bootstrap a community and weren't sure how to do that, but we made it happen and Beanstalk Farms team is growing significantly.
  • George and the team are working on BD + integrations. It's not so trivial to make sure that the integrations we want to focus on are symbiotic to Beanstalk and create utility. It's a little bit of art and a little bit of science to get this flywheel going.
  • It's a question on our minds as well as everyone else and spending a lot of time on integrations.
  • We are considering December infrastructure month at Beanstalk—improving lots of internal processes, particularly in onboarding other protocols and making that very simple for them. We still feel like Beanstalk has a compelling pitch even at 93 cents.
  • Beanstalk has survived longer than any other algo stablecoin attempts.

Do arbitrage opps currently exist when bean is below peg AND debt levels are excessively high?

  • Demand for soil is not arbitrage as defined in the whitepaper. Right now bean is at 93 cents. With a million dollars right now you could put bean in a growth cycle by buying all the beans below a dollar right now. That arb opportunity is distinct from the mechanism Beanstalk uses to bring the price back to a dollar (sowing).
  • Arbs will eventually bring price back to a dollar every season at some point in the future. Lots of people running that arb is what will allow the Beanstalk mechanism to affect the price more meaningfully/efficiently.
  • Coming back to the peg in Sept after the pump and dump was thanks to lenders, not arbitragers. 400 individual lenders lent to Beanstalk during that period. There aren't a lot of lenders at the current weather, which is why the weather is increasing to attract them.
  • After enough oscillations, you would expect that to attract arbitragers.
  • It's times like these where Beanstalk has lived through long periods below a dollar that makes Beanstalk sustainable.

Do you have an idea of how much debt you'd like Beanstalk to have as a % of its market cap?

  • based on the current pod line of 360M, that sort of implies a really high valuation of Beanstalk. Hopefully over the next weeks and months as BIP 6 kicks in, the pod rate should start to come down eventually. There's no way Beanstalk exists if it takes 3 years to pay off the current pod line, in 6 months we should be at a billion plus beans.

Can someone hold up the pod line?

  • No, harvestable pods do not hold up the pod line.

What would help other projects onboard to using and integrating with Beanstalk easier? OHM has a new partnership every 3 days. Would you expect this to be the pace in the next 6 months?

  • Hopefully! Things get interesting and exciting is when stalk and seeds become liquid and tradeable. Those are the assets that become really interesting to incorporate into other protocols because they are yield-generating. Bean deposits get really stick when that happens.
  • We want to really make it easy for other protocols to lend with stalk and seeds.
  • Likely incentivize a Curve pool with gauge

Wen liquid stalk and seed?

  • Worked out the economic details, technical implementation via BIP coming in the near future
  • Shouldn't affect ability to vote

Transcript

you can just mention sort of what's been going on with the the dow and maybe also a little merch update as well as possible especially given it's uh you know class related merch yeah yeah so um a lot of good stuff going on with the dow um i've been um kind of starting a lot of conversations with people uh onboarding people and getting kind of onboarding process going so that's been pretty pretty fun and exciting um one of these is austin our uh intrepid stenographer here um who's been taking notes for all the meetings so you guys can check that out and now the meetings will be recorded so that's good um also people on uh we have a lot of content production stuff coming up um i've been uh uh sort of speaking with and interviewing people and then connecting them with publius so if anyone has interest in uh you know working for the dao or as anything they think they can add just send me a dm and we'll set up a time we can talk and uh and that's that's been really exciting um yeah on the merch end of things i have ordered 12 hats and a couple of uh test t-shirts with the pfps the hats are just that i think everyone kind of saw the logo in the merch section so um the hats are just kind of a generic design uh the mugs can be either be a generic design or have your pfp on it so um let me know we originally said we wanted 30 but um and it was the first people who reached out so right now we have about 10 spoken for so um yeah just go ahead and reach out to me send me a dm say you want it i'll coordinate with you over email and then you can let me know what address you want sent to and we'll get that done um and then we'll probably do another round of merch afterwards too so um there is a snapshot vote up for me as operations manager a role i've kind of been taking on but um obviously we want the support of the dao in that as well so i don't want to take a role that people don't feel like i'm good for so looking forward to seeing voting on that and there's several other snapshot proposals up too so take a look at that jww and where have you been i have a snapshot proposal up um publius can speak to a few more and we have a down meeting on thursday at 8 30. so feel free to drop in there um about all i got for now awesome thank you dumpling what a great update uh and you know it's people like yourselves that are taking the initiative and just stepping up to the plate and starting to add value across the board where it's needed is exactly what we think beanstalk needs at this stage of the game so excited to see you know a couple of the other people that are here are also people we've been talking to about hopefully getting more involved with the dow so uh you know we're we've given people sort of five minutes so i think it's appropriate to get started with more of a class stuff so um you know typically the way we do class is it's similar to an ama where people can just bring their uh you know technical questions their economic questions their philosophical questions and we're happy to answer them and typically we you know we try to go into detail and give people substantive answers you know uh with you know the main difference between this and an ama being we try to keep in mind that the people here are you know largely people that are supporting beanstalk and they're gonna uh take this information then repeat it to others and so we want to you know have an opportunity where people who are looking to be constructive and help beanstalk have an opportunity to you know ask questions they may even be embarrassed to ask and really start to understand it at a deeper level so with that in mind happy to talk about anything and everything and uh you know per usual we've got a dumpling up here you know sometimes the bean merchant also pops up here so that we can get sort of general community source questions based on the chatter and the discord and stuff like that but in general people that are here should feel free to raise your hand at any point and we'll get you up here and you can ask ask your questions so uh with that we'll sort of open up the florida to some questions what's up g dubs hey guys uh still uh just apparently only jumping up on stage but um probably i think one thing that would be great to get your thoughts on a little bit more um as we're looking at kind of pegging the price over the course of the last couple of days you know we've been sitting below uh one for for a pretty long period of time which i think is pretty uncommon since the last that cycle um just given the fact that the pot line is where it's at we're getting the accumulation of soil and i'm not sure how much i haven't seen how many unique sellers that we've had join the protocol over the past you know 24 to 72 hours could you talk a little bit more on the economics of how um the peg will be stabilizing you know if if we're not getting new um sewing happening to the field etc just to get a better feel of um of the rebalancing to peg definitely so there's a couple things that we would look at to sort of understand a where the system is at in real time and where things are heading but uh before we get into the micro data it's important to appreciate that at a macro level in stock issued a ton of debt over the past two week uh growth cycle and so if we go if on the website then we go to field and we go to pods and we go out to like the month view um in stock during the two-week growth cycle uh which lasted if we go out to the price chart um really from like november or let's call it 16th is that first spike up to 1 117 where you started to see more increased minting but we saw from november 17 potline grow from 100 million now to 360 million so if we do the math on the implied valuation of beanstalk and how that has changed over the past two weeks uh that's an increase in 260 million pods which implies you know not even including the fact that the bean supply doubled uh an increase like another 20 million uh we're talking about the valuation on the debt side has increased over 500 million dollars to now your lend to get beanstalk valuing it at 750 million dollars or so and on the one hand therefore it makes a lot of sense that the weather has to readjust again and even though you saw the weather come down during that spike uh in demand it's now started to increase again and is back to sort of its highs and so this is a natural resetting of the weather that we're experiencing um one thing i do think it's important to comment is one of the main inspirations for f6 is that beanstalk shouldn't increase the debt level by that much during periods of excess demand and we feel we feel pretty confident that the next time beanstalk goes through a one or two week that's uh growth cycle uh like it did over the past two weeks uh it will deleverage in a much more effective fashion and at that you know at that point in time we would expect the weather maybe not to have to reset uh so aggressively and then maybe we won't see such extended periods of time below a dollar but at the same time at the macro level i don't think it's unreasonable to expect these types of extended periods of time below a dollar especially when a beanstalk doesn't have a lot of utility around it at the moment and b there aren't a ton of arbitragers playing beanstalk at a dollar yet and so over the next couple of weeks and months as beanstalk continues to oscillate above and below a dollar and tighter to a dollar you would expect both of those things to change for there to be an increase in utility and an increase in arbitrage and that will be when you start to see beanstalk trade much tighter to the peg especially on the downside but candidly we feel like this is periods of time like this are where beanstalk actually differentiates itself from other protocols uh like esd and basis that have failed because now when we talk about the micro data if you go to the balances the withdrawals in the withdrawn beams are only about uh 600 000 beans at the moment whereas uh three or four days ago as the growth cycle ended the withdrawals were back over two million and so we've seen sort of a trickle of withdrawals over the past day or two but that's largely slowed down and so the main reason economically we would expect uh to justify the price being below a dollar is that simply the weather is not high enough given the decent increase in the pod line so this is all generally a normal unexpected behavior especially after we saw the price as high as a dollar forty and really extensive periods above a dollar ten uh it makes sense for the price to hang out uh and candidly we were expecting it to hang out uh lower than this uh so not to give price predictions on where we think it was gonna go or where where it was gonna go per se um explicitly but we are we were incredibly enthused by the fact that other than for a couple hours when heath really was at its low um and even then beanstalk experienced a high level of demand um price never dipped really below 88 cents and now one other thing to look at to sort of understand where we're at this mini cycle uh even though it does seem like in general things have turned very positive from a network perspective around beanstalk is the volume and there's actually almost no volume over the past couple days uh with the price below a dollar so there was two to three million dollars of volume every day above a dollar and now only five hundred thousand nine hundred thousand six hundred thousand dollars a volume a day below a dollar and in general that's also an indication to us that there aren't a lot of sellers below a dollar and so in short this is largely a function of an absence of sewers because the weather has to increase and just being stuck did experience a major network effect over the past two weeks and it's both healthy and expected for there to be a little cool often um this is this is very much normal behavior um so that was fantastic thank you so then just to follow it up i mean you're you're thinking then like as the weather increases obviously it's going to be more appetizing for potential sellers to come in despite the length of hotline and then in turn that's going to be one one larger push of how we're gonna um head trend more towards the peg correct and you know separately you know just to give a little context beanstalk is right now it's less than 100 each from the peg and in comparison just to talk about sort of where we were in the past during the last debt cycle beanstalk was hundreds of eth below the peg and the liquidity was a fraction of what it is right now and so when we consider the general health of the system you know we saw one investor put in over 220 each in a day um if one investor did that not only would we be back above peg you know we would be immediately back in that sort of growth cycle that we were in two weeks ago so frankly we don't want there to be a million dollars to come in and then that growth cycle and then immediately after and then immediately after that is how you get endless growth that certainly before bip six wouldn't have been positive and even going forward it's we we still feel it's very healthy to have these short-term cool-offs where the system is able to reset and it's evident that there is a stable price and a clearing at a dollar around a 40 something million in supply and that's meaningful data and then at some point the market should start to start to to grow again from there so this is all part of the process ultimately as beanstalk starts to starts to demonstrate that time below peg is going to get less and less over time so when we when the white paper tries to be very open about this the oscillations especially at the beginning when there's no arbitrage are going to be wider and more violent so this is natural and the only thing that will ultimately bring in herbs is the fact that beanstalk does regularly cross beans over over its pegs so the past couple days uh just the market repricing itself and we think it's it's pretty healthy and the thing that we would look at to indicate that things are are generally pretty healthy is that the withdrawals have continued to to stay relatively uh low in comparison to what they were when there were major outflows a couple days ago that ended the growth cycle great thank you bean boy did you have a question yeah i mean i guess i have a bunch of questions but uh the one i've been thinking about is let's say someone shows like i don't know like a million dollars versus somebody sowed like a million beans or someone who sews like a hundred beans what does the million beans like cause like a blocking effect in the system when it comes to sort of clearing the line like does the pod line get cleared like one bean at a time or like does an entire batch have to be cleared at once it's it's it's on a continuous basis so it's not an entire plot and um you know pods it's not even a whole plot a whole pod it's to the decimal so um that's the short answer it's a continuous harvest yeah okay that makes sense i mean i have like other questions but if anyone else wants to go so bean boy i think the answer would be yeah if the if the million the million beans is right before you and you're the hundred beans you have to wait for the whole million to go through until yours goes through um but it's you know it's really the fairest way right otherwise um it'd get really complicated i think um go ahead and ask one more bean boy and then we'll get tagalo yeah so i was just um i guess like i was reading the white paper and i saw some stuff about like the seasons of plenty dynamic that is that something that happens often it has something to do with the like debt ratio right so the seasons of plenty happen regularly but when they do they have tend to happen uh a couple times in a row so there was only really one week where there were seasons of plenty and that was being stuck was pumped um from like a two million dollar two and a half million dollar market cap to a 40 million dollar market cap and grew to a 25 million bean supply over like a week uh and that that if you look at the all-time price chart uh those seasons of plenty happened when we went from four dollars right back to one uh and then there was like consecutive seasons of plenty almost entirely through the who like the next couple days except for it was one season where there was a price below one and that's then when you saw the price sort of pump for a couple more hours so uh in short the season the plenty is triggered by 24 seasons of rain and it is raining on the bean farm when the price is greater than one and the debt level is less than excessively low which currently is five percent so the bean uh if there was like less than two million pods in the pot line uh and the price was greater than one just on the chronic bean supply then it would be it would be raining and if it rained for 24 consecutive seasons there would be a season of plenty that is effectively beanstalk's way of deleveraging during periods where it might be particularly susceptible to apes trying to pump it because you know a low debt level means that the silo return is going to get particularly juicy so uh the the season of plenty makes it unattractive for anyone to buy and deposit beans while it's raining oh interesting so it's not meant as like a general reward thing it's kind of like a safety rail then for the price right exactly right it's like an emergency deleveraging valve in instances where there is way too much demand for beans yeah all right that makes sense we would just note that it did work incredibly effectively during the pump and dump and we're not for that beanstalk would certainly not be around today publicly it's on that note i think i said then if we if you were to change we were to change the uh withdrawal period of 24 hours which i thought was something that came during the ama but maybe i misunderstood um of withdrawals from the from the silo to 24-hour period would that then impact the season of plenty or maybe i maybe as the withdrawal time comes down that would have to also impact the season of plenty timer right okay so just for reference um just for completion and then gala go ahead is the season of plenty timer of 24 seasons of rain is at the current upper limit which is the withdrawal time so the season of plenty timer can be eight seasons of rain or 16 seasons of rain it just has to be less than or equal to the withdrawal timer and the reason for that is it basically prevents uh just straight our bots from uh from participating in inorganically pumping beanstalk when the price is greater than one because it basically means that they cannot withdraw and sell above one and so there's no opportunity for them to buy above one deposit collect interest and sell above one so instead they like implicitly you know that you're gonna have to sell below one because it'll happen after the season of plenty and therefore it's a much less attractive to just our beanstalk so all of this is designed to limit the amount of inorganic demand beanstalk experiences when the price is greater than one and the debt level is low because again beanstalk doesn't want people that just want to pump it beanstalk wants long-term investors and long-term sellers and it doesn't people that are just going to pump and dump stock are not people like that's not capital beanstalk wants to attract so these are incentive mechanisms designed to disincentivize sort of ape capital sorry just on that note then what would be the incentive of uh reducing the withdrawal timer um below the 24 hours oh the point is that we would have to lower the season of plenty timer in line with that so as the withdrawal time comes down so too will the season a plenty timer like if if if one thing that we're thinking we're currently working on a bit that one of the things that bib will do is lower the withdrawal time and to lower it over time right so maybe like twice a week it'll lower it by one season a couple weeks down to something like 12 or 16 seasons and then every week it'll lower it another season down to four or something and then from there the point is the season aplenty timer would just have to decrease in tandem down to four um and then i think any further decrease in withdrawal time below four seasons would require some additional tweaks to the silo incentives but in order to get beanstalk down to either um you know one season meaning you could withdraw at the beginning of the next season uh or no no withdrawal timer at all we are considering you know further minor tweaks to the behavioral incentives here and again um as beanstalk grows it does allow us a little bit more opportunity to adjust the mechanism here whereas when beanstalk was in its infantile state having a strict withdrawal time of 24 seasons was much more meaningful than what beanstalk it's operating at scale so lowering the withdrawal time over the next couple months gradually um will increase utility while beanstalk continues to grow and demonstrate demonstrate itself so there's less of a need for strict rules on that front and just lastly before we let you go ahead gallo we would comment that when stock and seeds become tradable that will also increase the stickiness of deposits in the silo and that will also uh like further allow or further reduce the friction when it comes to decreasing the withdrawal timer so lots of interrelated things happening here but they're all you know they're all generally with happening in mind with how can we answering the question of how do we increase utility and how can we keep increasing stability while increasing utility so uh enough said on that front for now so gallo sorry to make you wait so long but go ahead yeah no problem thank you um so i've been thinking about like the plot line being large and um the time that you have to wait to get your your return right uh not not bounded and um i was thinking like if you considered making the department the returns for people that are in the potline being you know not like you have to wait for your turn to get everything but more like a continuous return so if you're in front of the line you get more and if you're at the end of the line you get less but everybody gets something so that you know everybody feels like they're getting a little bit of return it's a little less intimidating to go in and and you know thinking that maybe we're gonna wait for a year or two right to get to get your uh your investment back so and we understand did you think about this uh design approach and would you consider a proposal along that those lines so in general one of the philosophical principles around the creation of both the silo and the field is how do we create efficient markets how do we create an efficient market for soil and how do we create an efficient market for beans and one of the innovations of beanstalk is the first in first out uh payment model and not to say that it's um we have to keep it because it's an innovation but just to to kind of juxtapose your proposal against the first in first out mechanism and how it may uh have different incentives or different effects on investor behavior than uh desired is currently if i'm going to lend beans to beanstalk under the first and first down mechanism i can price the debt uh very specifically because i know what i'm valuing beanstalk at when i get paid off there's an implied market cap of what the value of beanstalk is when i'm getting paid off so i know my return and i can form some sort of calculation of the risk of what is the chances that beanstalk never gets to that size and that's a pretty simple calculation uh frankly when you also add on to that the fact that the growth of the pod line is uh somewhat continuous meaning every person is lending after somebody else so if i'm lending right now at a given price i'm lending it very close to the last price that the last person lent beanstalk and so when you put those two together and then you combine it with the first and first down harvest schedule what you create is a series of incentives that basically make it efficient behavior such that if i think that right now based on the current weather the current price of beans uh and the current length of the pod line i think it's a good time to lend to beanstalk i am incentivized to do that immediately again when we talk about creating an efficient market that's the important part that i'm incentivized to do it immediately whereas a harvest schedule where pods harvest at all points in the line but harvest at a different rate makes it basically impossible to calculate what your actual return and how over what period of time you can expect to get that return because one of the main things that will influence your return is how many other people lend to beanstalk and how quickly the pod line grows and that's already a similar dynamic to the silo and we don't want the field and the silo to have exactly the same dynamics but furthermore the nature of the silo makes it so that the rate at which your return in the silo is getting diluted is much less than in a scenario where as the weather increases and the pause at the end of the line per bean sown or increasing um now you have like very perverse incentives for people that lent earlier are sort of getting screwed because the weather is starting to increase and therefore people that are lending less money to beanstalk later on which again is worse behavior than people lending more money to be in stock earlier at a lower weather are starting to get a disproportionate return so as soon as you start to price pod harvests based on your place in line now that factors into the like the weather in two places and you start to lose the effect of the first in first out harvest schedule and its creation of an efficient market so when we think about how how beanstalk succeeds and how it actually creates uh an efficient price discovery on the bean and soil markets um changes to the hot harvest schedule away from first in first out not to say that we're intent on sticking to it but um i i think it would be very hard to create a system that would create a more efficient market around the soil around soil in general thank you for at least specific not to say that it's difficult to create a more efficient market around soil we're always trying to do that i just don't think that this solution is is going to achieve that just to be clear like we don't think current model is the best it can be we're always trying to improve it further also uh gallow just in thinking about that the exact reason why you're not lending you know why why you're saying why you're having some doubts about lending to beanstalk is is just because it's up front about how long it's going to be you know if under your your way it's a little more opaque right like if you think oh i'll get a little bit but then i'll get a little bit later and i'm not really sure how much i'll get we don't want people lending to the protocol who don't really understand you know that seems like that could cause problems just with that um you know we want to be we want to be clear about you know how many pods have to clear until you get paid and that way people can make a rational decision right yeah just wondering like what were the turnoffs um and yeah because it's just that you know i did land shipping and i already harvested and i have more coming but right now when i look at the line i'm intimidated right because it can take a year it can take two years and it's like i'm not sure exactly how how to to measure that time and i think that's something that might be a common problem right people are looking at it and say hey how long is this gonna take right how can i measure this one of the thing we would just add is that um the type of exposure that you're describing turning the field into is almost exactly the silo and you know people buying beans below a dollar and depositing in the in the silo is better for them than buying them above a dollar and depositing them in the silo because you get stock and seeds based on the beans you deposit so for every u.s dollar of value you pass it into beanstalk like it's better to deposit below one and therefore there are similar incentives around you know better returns when the price is below and deposit in the silo so if you're looking for that type of exposure where you get interest every season uh you know that's already available and depositing beans in the silo has the same effect on the price in the short term as does selling beans so um to some extent that mechanism is already a part of being stocked okay uh being billionaire you're up next uh yeah hi um pulis i've heard you talked before about how long-term growth needs to come from demand for beans utility as a stable coin i'm wondering if there's a risk of a sort of chicken and egg problem where beanstalk needs that external demand to achieve price stability but also needs to maintain price stability to generate that external demand and kind of how long can bean stock sort of balance supply and demand today kind of using only weather without that utility or how do we resolve that kind of chicken egg problem and getting people to use bean as a stable coin oh hey that is the chicken and the egg problem and we're not shying away from it and endedly there have been a couple other chicken and the egg problems around beanstalk which somehow there are now chickens and eggs and one of them is reflected by the fact that there are 30 to 30 people uh in this class yeah more than that 37 36 people in this class right now talking about beanstalk and when we started we were like how do we get people to care about bean stuff without just going to vcs and trying to you know we wanted to bootstrap a real community how do we do that and it's you know it's been a lot of work but in general if you ask how how we're gonna make that happen the short answer is beanstalk farms is growing aggressively so dumpling is now hopefully going to be operations manager uh austin is is joining the team in a part-time capacity we're hoping to grow that over time there's lots of uh developers now joining beanstalk farms across the stack that are going to allow um as we have you know or integrations organized with various protocols that coded up in an efficient fashion across the stack um george b uh you know is is leading a lot of business development and he's going to hopefully take on a further increased role going forward so um there's a lot of work that is happening to start to do that but the short answer is there's a lot more work that needs to happen and specifically it's not so trivial especially in the early days to make sure that the integrations that we are focusing on specifically not to say that it's you know any integration isn't great right now that's like anyone should who wants to start using beans we encourage them to but specifically when we talk about the integrations we want to focus on on the beanstalk farms level it's essential that they are symbiotic uh to being stuck and create utility uh and so it's not just that beanstalk can help a protocol in the short term it's that the underlying dynamics of the protocols we're integrating with are not going to be short-term demand and then large chunks of supply coming due at least in the short term right like over time as there are larger arbitragers and a much more efficient market for soil i think that changes in the amount of different integrations p and stock can support goes up dramatically but in the short term it is uh it is a little bit of an art and a little bit of science and um you know we've been talking to community members like mr manifold about um and mcbenolds and others about uh curve integrations and the like and how how that would work and how to structure them such that they have symbiotic effects on being stuck and aren't just um you know helping another protocol obviously we wouldn't be able to help curve at this size but um we have a lot that we could we think would benefit beanstalk by starting to integrate with curve and i think once we have a curve pull even if it's unincentivized uh you're going to see a lot less periods of time with the price significantly below 1 um just because of the ability to arbitrage against the curve pool so uh this is all very exciting um but there is a lot of work to be done on that front and in general we would say uh your question is a question on our minds uh and on everyone's minds and we're we're spending a lot of time trying to figure it out and then start to get those live and we're having a lot of those conversations and we would just encourage you know everyone if they think of other integrations or protocols that might want to start using beans uh to connect us and in general just sort of one last point is over the next month we're sort of considering december like infrastructure month on on beanstalk farms we're trying to get the hiring process set up we're trying to get the onboarding process set up uh that's another thing that we can start to get set up is this this infrastructure around creating utility and getting other protocols to integrate bean stock and making that very simple for them so lots of different stuff we can start to do uh make that smoother and easier but in general you're totally right that step one is getting stuck to continue to oscillate above a dollar and below a dollar and you know at 93 cents it's a little bit of a harder pitch than a dollar at a dollar a three but um you know candidly we still feel like it's a very compelling pitch even at 93 cents or around here for sure okay yeah thank you for the answer we would just comment like psd and the like have never had these extended periods below a dollar that they returned from and the fact that being stuck was i mean as low as 24 cents and spent a month basically entirely below a dollar um but there's no history with any of those other staple attempts from algo stable attempts anything like that and this little dip over the past week is nothing but a fuel for the fire of of proof of the concept of the model and we're very excited so whenever the weather does rise to the appropriate level to track sufficient demand for soil such that the price goes back above a dollar um you know we think it's just going to be back in action and hopefully with the soil changes from dip six being stuck will deleverage much more effectively what's up evan hey um so interesting discussions so far and i kind of have a two-part question depending on how you answer the first part so my first part is do arbitrage we like that that's a good that's a good uh it's a conditional question yeah so do arbitrage opportunities currently exist for when being is below peg and when debt levels are excessively high because um my understanding from the white paper is that as long as the debt levels are not excessively high the pods essentially act as an arbitrage um a delayed arbitrage where you get paid out in the credit but given that the pod levels are so high it no longer um it doesn't seem to be functioning you know it doesn't seem to like be able to function as that kind of arbitrage that i was originally thinking so uh demand for soil is not arbitrage um as defined in the white paper uh and we don't really explicitly define arbitrage i guess in the white paper but you would think about the way we would think about it is um right now the price is at 93 cents but anyone who wants to start doing bean orb has a reasonable expectation that you know they're monitoring the system they realize right now for a million dollars or so like you can basically put beanstalk back in a growth cycle and for a million and a half dollars almost definitely because there's just not that much supply at the moment and the point is the arb opportunity right now is to buy beans below a dollar and then as the growth cycle starts to start you sell beans above a dollar and so the arbitrage opportunity is to buy low and sell high that arbitrage opportunity is distinct from the actual mechanism that beanstalk uses to return the price to a dollar but we would note that like the main point of highlighting arbitrages in the white paper specifically that all bean stock can do is cause like large oscillations above and below a dollar it's very difficult to have a mechanism like this that is able to by itself return the price to a dollar every season when you have periods where there's excess supply and there's just not enough demand at that personal supply at a dollar you're going to have periods of time where the price is below a dollar the way that those periods of time decrease and those oscillations come to basically zero for most periods of time it's when arbitragers look at being stuck and say yeah like looks like it's going to be back above a dollar at some point in the next week to two weeks i can buy it up to a dollar with an average price of 96 cents and hopefully i can sell it at an average price of a dollar too therefore i'm turning you know an eight or nine percent profit um in a week or two so for running that arbitrage back and forth above and below a dollar is what will ultimately create that stability and lots of people running that arbitrage above and below a dollar is what will create a competitive market for bean stability and over time that's what will then allow the mechanism to start to work in a more efficient fashion as well but we would we would note that the mechanism is much more of a reactive slow and steady response to the market uh mainly so that beanstalk cannot be easily manipulated and largely it relies on arbitragers that are just independent market participants to buy and sell beans back to a dollar uh in order to make their own profit but but also helping be in stock at the same time okay um cool and then so the second part of my question i guess is then um since there isn't that kind of a hard arbitrage opportunity and the oscillations of the peg is dependent on the growth of the uh or like these arbitrages to come in and to buy being in hopes of the uh arbitrage to be successful um it you know it doesn't seem like you seem too concerned that there just isn't going to be any more arbitragers coming because certainly you know uh between lenders and arbitragers right so at the current weather and podline aren't a lot of lenders um but once the weather rises to attract lenders then it doesn't matter whether or not there are arbitrages like lenders are distinct actors than arbitragers or they may be the same actor but from an economic perspective you would consider their behavior differently and right now beanstalk is ripe for arbitrage of the type that we described where you can buy it at 93 cents up to a dollar for an average price of below 97 cents uh 96.71 would be your average price and you know we're basically now saying the price is above a dollar you can then take those beans and sell them above a dollar so now you're collecting the spread between buying them below a dollar and selling them above a dollar that's live right now the absence of arbitragers doing that is why we have a period of time where the price is below a dollar but that is separate from the absence of lenders which is another reason why beans is below a dollar at the moment so there's an absence of arbitragers and an absence of lenders and the presence of either arbitragers or lenders would bring the price back to a dollar okay yeah yeah and so um the absence of lenders um kind of is a result of the pod line being so long and so the weather is supposed to increase the apy of the pod line and incentivize more people to um go in um i'm not um so i guess i understand that portion it's the arbitrage portion it's the kind of the spontaneous the arbitragers will come and they will see an opportunity and they will uh decide that this is a good arbitrage play and that the price of bean is going to go eventually up and um you know it's very impressive that the price of bean was able to rebound after that uh huge dip and those multiple yeah just all of those dips uh towards the end of uh yeah end of september beginning middle of october and to be able to maintain the peg and that was the result of arbitragers coming in i guess and that was the result of lenders just to be clear that okay almost all lenders and that's why so just a great chart if you go to field and you go to sewers and you go to all time if you look at how beanstalk actually recovered from mid-september to middle of october like 400 individual uh lenders your unique wallets lent to beanstalk and so it was a the ability to attract a diverse set of lenders that led to the price returning to one and if you look at where we're at just over the past week or so in this chart there haven't been a lot of new lenders and that's one of the main reasons why the price now has below one is because there aren't a lot of lenders at the current weather which is fine so accordingly beanstalk has started to raise the weather again and the arbitragers like i understand the protocol can um only really focus on the lending portion but i guess the arbitragers will just kind of come in and you know because i'm just uh i guess my concern is that exactly the weather and the pods that doesn't become sustainable in people's minds and they don't really see that as an option and so then the only option left is the arbitrage and um yeah so i guess they they're just going to come in from whatever and from like the community growing and putting more outreach out to other communities and you know explaining what this is because a lot of people don't even know you know let alone that this exists people don't even understand how all of it works because it's so entirely new and so i guess the arbitrages will just kind of come in spontaneously so over time as beanstalk continues to oscillate above and below a dollar that will will hopefully be the inspiration for some people to start performing that arbitrage so there's no saying how many more times beanstalk needs to run above and below a dollar but at some point you would expect that to happen and then from there beans are going to be much more stable but candidly once that happens you know whenever you run out of our money and there's too many sellers and then you have a dip below one for the first time in a while like it's times like these where beanstalk has lived through periods where you have a price below a dollar that makes this long term sustainable okay cool thanks this is you know i i get it a lot of people are new um and it might be a little nerve-wracking like we haven't printed in a couple days what's going on is this okay this is all very healthy now we try to be as open and honest about this steps as well and so we would we would comment that if b6 had been implemented a month ago before the beans beanstalk really started to grow and have periods above one uh the pod line would be probably 120 million or so maximum so hopefully going forward there will be much less uh much less growth in the pop line during periods of excess demand for soil so uh that was largely just an inefficiency in in the model and we're seeing that reflected in a slight deviation in the price below a dollar now because the weather has to increase but again in the long run we think this is probably very healthy for being stock regardless not to say that it's not good that it was fixed okay cool yeah that makes a lot more sense now thanks i have a question for you uh like given the length of the pod line and like with the length of the pod line do you have an anticipation like say six months from now um where as far as a percentage of you know the amount of beans out there versus the length of the pot line do you have an idea of um you know where you would like it to be as far as like uh how much debt you'd like bean stock to have as a percentage of its market cap so i mean currently the like those are explicitly defined as like the optimal debt level which is 15 but um based on the current pod line you know of 360 million uh that sort of implies a really high valuation of bean stock um when we might have like a below optimal potline or pod rate which is perfectly fine but keeping in mind like the next six months or so um it would basically say that hopefully over the next couple weeks and months as beanstalk continues to growth go through you know its growth cycle and we start to see that play out more and the effects of big bf6 take place where the pod line isn't growing uh once once we we have no available soil you know we should see the pod the pod rates start to come down aggressively so maybe we we get to like a 500 or 700 million odd line um but that should should happen as beanstalk rose to a couple hundred million dollars as well and so you're gonna see the pod rate come down into the low hundreds over time and then from there you know at some point you will start to see beanstalk enter a further growth cycle from there and really pop largely due to the fact that it has paid off most of its debt um at that point you would maybe it's hard to say whether we'll see a reset of the web like the pod pod line to zero which would be sort of crazy uh but but and candidly guys all of this is going to play out over the next year regardless like there's no scenario in which stock isn't chugging through all the pods and it's still alive in a year so just based on the speed the crypto moves and the rate that beanstalk is growing like all of this is going to play out in the next six months to a year and even if you're lending to being stock right now this is not people are talking about two three years down the road there's no way that bean stock exists in three years if it hasn't paid off all these pods you know in the next couple months which again i think it's very doable like this is the next six months beanstalk should definitely be a billion plus beans so this is all this is why we're talking about integrations and stuff so seriously because we do want to start to increase utility and not not copy a project that a billion beans that are all a dollar no one wants to use them so this is an important and important part of the process yep that makes a lot of sense um alrighty what else do we have uh okay can i just ask one quick question again yeah correct yeah so just to follow up on the harvestable pod portion i think just to really tease out the final details on that so uh puglius let's say i have 10k and uh uh harvestable plot and dumpling has 100k and i put mine in just before him um the it sounds like the pods become harvestable like down to the decimal but it won't be the case that i can harvest my full plot of 10k pods uh until the entire plot is accessible correct no that's also not correct so if if your 10 if like you have a 10k plot and half of it harvests you can harvest them and then you know you'll you'll just have a remaining plot with the other 5k correct things and then obviously since dumplings still behind me he's gonna have to wait till all those 10k and then i get mine and he'll start to get his okay makes sense thank you correct you know the main point here is uh and especially like one of the things we're working on for bip7 which we will put a draft of a proposal at some point once we have have it more fully fleshed out but one of the things we intend to include is partial claims um so even if you have like larger plots and some like half of it is claimable or harvestable you don't have to be so all of it or you don't have to lp all of it you can do parts you know and you have much more customizability as well i think i think snake should go because i already asked a question i'm just up here again because i thought no one else had any questions but he should go first sure go ahead snake environment a friendly environment guys this is awesome love it thank you and uh sorry if it's been asked so can someone effectively like hold up the pod line if they want to uh no so the pods harvest independent of whether the people in front of you have have harvested their pods if that makes sense so there's no way to hold up the potline perfectly clear thank you so you mentioned a little towards the beginning about how uh some new developers have come on board and that i think you were working on uh making the integration process easier um and i was kind of curious if you could shed some more light on what the you know from a technical perspective what um what how can you make the integrations easier and you know how does that look for partnerships as well i mean obviously that's good for potential partnerships because like olympus pro for example they've had um in the third 90 days that they have been serviced they have been able to have a partnership with a new protocol on average once every three days and so if do you see being able to have that kind of infrastructure to pump out integrations like that in the uh next like six months i guess hopefully definitely so where do things get particularly interesting and complex but also get exciting as [ __ ] sorry we shouldn't curse but that just shows how excited we are about this stuff is uh it slipped out is when stock and seeds become liquid and tradable those are the assets that become really interesting for people to incorporate in other protocols because they are yield like bearing assets and accordingly once stock and seeds get incorporated into other protocols being deposits get really sticky independent of how low the withdrawal timer is and the complication around stock and seeds becoming liquid though is if i wanna like add my stock to a lending pool for example uh the way beanstalk distributes rewards is that if i have seeds in that you know in a lending pool that lending pool will start to accrue my stock that lending pool when it accrues my stock then will start to accrue my beans that i earn from stock as well um well that those seeds won't like you'll have to farm your stock right because it's grown stock but the point is you're now receiving these assets that would be entitled to if they were your seeds but while they're sitting in a lending protocol nobody owns them and or technically it would be owned like the way beanstalk considers it is that it would be owned by the lending protocol contract with which you've deposited your seeds in and so what we want to do is we want to make it really easy for sending protocols to integrate stock and seeds for example by giving them sort of factory uh contracts to deploy to handle um like basically allowing people to go through this contract which will do the accounting for the distribution of beans stock and seeds as appropriate even while you're integrating with other smart contracts so that's really where the complications are introduced and where having like a robust um development infrastructure to make it trivial for any project to integrate stock and seeds stuff like that is what might be a little more technically challenging and over the next couple months we hope to get ready uh as we prepare for starving seeds to become liquid again that's like something that we could do over the next couple weeks if anything it's sort of like a real trick up being stock sleeve and we feel like once stuck in seats go liquid things are gonna start to be much much more uh sticky real stable like it's gonna look like much more of a complex ecosystem and so on the one hand you might say like let's just get that running asap but on the other hand because the bean excuse me stock and seeds are going to trade against bean um until we have real utility for bean uh you don't really have a major dampening effect from stock and seeds um other than its effect on uh withdrawals and stickiness in the silos so again chicken in the egg but we're excited about how stocking seeds are going to add value to the to the ecosystem so if you have a curve pool technically and it's not incentivized is it still uh is a stock still growing in that then well um no because currently the only way that you can earn stock on liquidity is if you deposit a uniswap lp token in the silo and if the curve pool we're thinking that the way we'll probably incentivize a curve pool is with gauge um we don't need to at least immediately have it so that you can deposit the lp tokens for the being three curve pool in the silo that's something that can be added in the future if necessary but we think through things like vodium and we've been talking to like mcp notes about stuff like this for guidance uh we think that there are much more cost effective ways to have liquidity added to the curve pool okay cool cool so uh i was wondering you mentioned stock and seed being liquid is that like an upcoming bip or like i i know this was mentioned before so i was just wondering like what the status it's not like it's not in the oven but it's you know it's the dough is rising in the fridge or something okay all right that makes sense because bips are like the code is basically done and it's like a github pull request right exactly so bibs are formal like actual requests and changes to the code that we want to make um and typically what we've been doing especially for the past couple bits is we've been making proposals or drafts of the good proposal which is a written version of the bip uh informally a couple days before for some comments and feedback stock and seeds you know before we even get to like making a proposal you have to work out the economics of it and then the technical details then you have to actually write the code so we're sort of at the stage on the stock and seeds front where we feel like we've worked out the economic details and um especially now that the beanstalk farms development capabilities on the back end uh have really started to grow uh hopefully in the next couple weeks we'll start to be able to develop uh devote some resources to working on making stock and seeds liquid and then our hope is to get more of these bits developed uh in advance and then be able to sort of deploy them at the appropriate time and have them ready in advance whereas to date we've been sort of writing them in real time and then once they're ready to go we propose them so this is all becoming a little bit more uh organized uh and there's a more of a process getting set up across across the board across the stack across the the farm here uh every axis you want to think about it like i said december is a little bit of infrastructure week so uh all just uh all just getting started and very encouraged by the progress thus far so um don't want to keep everyone too too long so we've been going basically an hour since we started uh if there's any sort of final lingering questions feel free to i'm in and otherwise uh thank you everyone for coming and we look forward to you know to continue the discussion uh in the discord and in class next week and and elsewhere hey publishers have a quick follow-up on liquid uh stock specifically i'm curious how that plays in with governance rights and what implications that has um yeah this is another thing like when it when i have my stock and i have it out in a lending protocol unless it's being loaned out uh can i still vote right these are part of the integrations that we want to have a factory contract that makes that stuff very easy to do and uh that's part of the process that we need to implement on the technical side of things but in general a stock being liquid will not affect your ability to vote unless you're you like sell your stock or you if you deposit it in another smart contract if that smart contract has an integrated bean stock then you won't be able to vote and so that's why it's so important for us to have like easy factory contracts that allow people to integrate stock and seeds into their protocols so i guess like one last question is if i'm not mistaken you basically forfeit stock and seed that accrue in the silo if you withdraw beans right correct so if you were to be able to like give all of your stock to a lending protocol you would be unable to withdraw exactly like once that's currently it's just at the protocol level like it it's just an internal date like your wallet has an internal state you just have to burn the appropriate amount of stock and seeds and that's updated whereas when those are liquid if you don't have the sufficient amount of stock and seeds and silo beans to burn for your withdrawal you just won't be able to withdraw you'll have to go on the open market and buy it or or get them somehow okay interesting yeah i'm personally very excited for the i guess i feel like there's gonna be a lot of very complicated like economic tricks you can pull if stock and seeds are liquid like yeah for example stockpiling like a huge quantity of seeds just to like farm stock really fast or something there are so many fun things that open up like frankly one of the beauties of this it's complex but it's also like a very nice ecosystem when it's functioning and it's in its in its full capacity it it allows for people to get exactly the type of exposure that they want to the protocol and it also allows for like unique new complex derivatives to be built on top of beanstalk and that is what allows it to become the basis of all of d5 whereas something like fey and frax are not meant for that they can't handle like large derivatives built on top beanstalk can because of like when you have a liquid market of stock and seeds and you don't just have derivatives built on top of beans you have them for stock and seeds you're going to have like really sophisticated arbitrages managing these these assets and markets in a way that creates real stability over long periods of time and then at the micro level the hope is that the weather is able to adjust uh during periods where there isn't a sufficient orb to to create those longer term oscillations above and below one so this is this is a very young ecosystem again being stuck is still in what we would describe as an infantile uh state or an infant state and uh you know there's a lot of you know puberty is a long way away even and that's going to be a fun period of time so it's like this this thing has so much room to grow and we're just excited you know you talk about the complex economics problems like register so we feel so lucky to wake up every day and get to work on those complex economic problems so we're having a blast and we're incredibly grateful for active community that's forming around beanstalk okay well i think that's a a nice wrap if there are no lingering questions i checked the uh the classroom board and no one had really written any questions there either so um anyone who's interested i was gonna start a twitter spaces so we can uh hop on there and uh have a quick chat i will also note that we just had one of the biggest trades on the nfts uh someone bought a cool diamond bean for .694 eath which is about 3000 bucks so that's pretty cool um whoa that's a steal one of them went for like an eath a couple a couple days ago i didn't it was that was a duo package a couple days ago so you got two you've got to assume it's for the diamond right yeah but it's uh pretty good pretty cool to see yeah that one was a steal um fun stuff i need to get my mfts out of the protocol i have seven sitting in there but like like gas is just like 300.00 like middle of the night yeah you can do an email uh email alert when gas is low do it like eath gas station all right guys uh well thanks for coming out we have the um the dow meeting on thursday at 8 30. uh so please come there and uh yeah if you're at all interested in working for beanstalk uh shoot me a dm and we'll set up a time we'll chat figure out a good spot for you thank you everyone take care