Ceazor <> Publius

Ceazor <> Publius

April 25, 2022

0:00 Intro • 0:40 Ceazor's Discovery of Algo-stables • 4:17 What Is A Credit Based Stablecoin and Why Work On One? • 8:35 Publius's Journey In Crypto • 12:33 The Exploit • 17:58 Response to The Exploit • 22:01 The Barn Raise • 36:47 Pre-exploit Pods • 42:53 VC Investment • 44:41 Beanstalk APY • 48:02 Beanstalk Development Progress • 52:01 Barn Raise Questions

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With replacement Bienstock, obviously Publius and Caesar. You two know each other? Howdy. Yes. Yes. Howdy. Howdy. Yes, we do know each other. Thanks for having. I feel I know you a little better. Thanks for having me. Well, I just wanted to coordinate this space so we could talk a little bit about Bienstock and the, you know, the plan moving forward for Bienstock, but also, um.

Yeah, I would love to hear Caesar have, you know, a little bit about about you and how you found Bienstock. And then, you know, I'm really just here to bring this conversation together, and I'll let you guys, you know, don't don't mean to stand in the way of anything. So, Caesar, do you want to. Do you want to take this away?

Yeah, sure. Yeah, sure. So what I was saying before, when you asked me, like, what was one of the videos that I kind of got excited about in, and I said it was something on Binance Smart Chain, and it was called a B dollar. And it was an algo stablecoin. So it was my first venture where I had like enough money that I was willing to risk on something that was like, you know, I had already learned about them and I'd seen the failure of like empty set dollar and other stablecoins how they, you know, they rammed up and then spiraled down to zero and, you know, supposed to stay pegged but never did.

Right. So and but then I was super intrigued with it because of like two major reasons. Like one, of course, you know, like the ability to just print money out of thin air gives you the ability to give people money, a lot of money out of thin air. And I find that to be very interesting, intriguing and actually great for for people, especially new people who are like not, you know, financially secure or, you know, they don't have a whole lot of money to invest in a blue chip or, you know, something that's not going to, you know, go up so fast.

So, you know, the apys can be quite high on these algo stablecoins and so forth. And then the other reason is the fact that it's not backed like having a collateralized stablecoin is great, right? Because it's the trust factor. Is there like people don't need to trust it. They don't need to. It's not backed by faith at all.

It's just, you know, like I can redeem this for my usdc so I know it's okay, right? I know I'm good. I know if it does go to bad, I can actually buy it cheaper and get back my dollar. So, you know, there's there's different use cases for them. Right. And but I really like the fact that, you know, it's decentralized because I kind of do look at the U.S. dollar as as a and it's an algo stablecoin now like it's not backed by gold ICO you know people do say it was backed by infrastructure, by the government, by the military, by these sorts of things, the social structure.

But there's no like gold. I can't go to the bank and say, Hey, I want my gold, I want my diamonds, I want something tangible. So I feel like, you know, the algo stablecoin was something that was interesting to me because it was decentralized, like fully like there's no usdc in the back. There's no way to shut it down.

It's just it is there on the back blockchain. So that was the first project that kind of, you know, really made me interested in crypto. And like, like these, these guys are like printing money and just giving it away to like people who are using this right? And I found that to be very intriguing, very intriguing. And then, you know, a lot of videos later, I came across Bienstock and I found it to be when I first looked at it, I was like, Yeah, this is the same thing.

Like maybe it doesn't have the senior edge, it doesn't have the like the bonds and it doesn't have the the share token that gets all the printing and stuff like that. But it's still kind of, you know, is printing beans out of out of thin air and stuff like that. So this is kind of the first question I have for list is like, why did you guys decide to make a credit based, facts based stablecoin instead of something more like, you know, a collateralized stablecoin or partially collateralized like FRAX or something like that?

And then obviously what makes it what makes the difference between a credit based and a and a algo stablecoin? Like what is this major difference? Like, this is all I'm going to really ask about the process and then we'll get into the stuff more about like the problem and then the bar race and stuff like that. So, so the why, why?

What is a credit based stablecoin and why work on one so fundamentally? And I think the reason we want it to work on a non collateralized stablecoin was because of the problems. So it almost answers itself from your second question, which is the current structure of Defi, whereby the vast majority of stablecoins in defi are collateralized in some capacity means that they have high costs associated with that and the costs are particularly a function of the fact that if you have collateral there are some cost associated with locking up that collateral, particularly if you're going to do it on the scale of billions, tens or hundreds of billions of dollars or more.

The cost of locking up immense amounts of collateral is high and therefore the providers of the collateral to issue stablecoins need some sort of yield to compensate for that opportunity costs. So structurally collateralized stablecoin models make it such that it is very expensive Stablecoins are expensive in defi and having expensive stablecoins makes doing all sorts of things that should be should be possible, like using Augur, for example, or other decentralized prediction.

Markets are really cost ineffective when you consider ten, 12, 14% carrying costs on the stablecoin you're going to use to denominate your your decentralized bets in. And in short, the benefit of switching from collateral to credit is that there is no longer any opportunity cost associated with locking up collateral because there's no collateral. And furthermore, there's a lot of flexibility on how to distribute the senior edge from a non collateralized stablecoin or from a credit based stablecoin.

And that actually facilitates not just having a neutral carry stablecoin but a positive carry one. And so the structure of Defi, if it changes from negative carry stablecoins to positive carry stablecoins we think will be significant. And in short, why did we start working on Bienstock? It was serendipitous timing. We happen to be hanging out around the time that ESD was blowing up in a good way and it was very clear to us that the rest of the market also agreed that a credit based or non collateralized stablecoins were high value in defi and we decided to to throw our hat in the ring, if you will.

When you say the cost of a collateralized station did the two things that come to my mind, maybe you can add to it as this one is over Collateralization like you know, you need more money to print less money, which is obviously not ideal, right? And then the other problem is like, you know, for something like usdc, I assume there's some sort of like fiat fee, you know, like when you go to circle or tether with $1,000,000, they're not going to give you 1 million usdc They would probably give you some fraction, some something less than that.

They would charge you some sort of fee or they would just, you know, you would have to pay them a little bit more than a million or something like that. Is this these are the two costs that you're talking about, especially that over Collateralization? No, I would even make the argument that the just the dollars that are in a bank account somewhere backing us.

DC That's where the cost lies. Like what else could you do with those tens of billions or hundreds of billions of dollars? Lots of different stuff, right? So there's a cost associated with it. Okay, so like an opportunity cost or like a loss opportunity for that capital be used some elsewhere. Okay, onto populace. Okay. Like are you you've been kind of anon for all this time in that you've come out and you given your names and your and brief description of who you guys are and so forth.

But I wanted to have more talk about like your defi history, like you did give a little snippet that you've been you were around during the empty set dollars. So can you give me some other ideas of things that you were playing around with in Defi that really got you guys together and to brought you guys as a team to be like, Yeah, this is cool and let's try to build on this and so forth.

Like, I assume you guys didn't know each other like growing up or something like this and that. So we're friends, you get college, right? So we kind of had our own individual journeys through crypto. Just speaking on my own personal experience, I thought that interacting with and using Makerdao CDP is to mint. I was really like a mind boggling experience and what it facilitated from a thought perspective of what's possible on chain.

If you get the economics right. It was very encouraging. And in short, you know it was a big fan of end user of Makerdao a long time ago, 2017 2018 around that I think 2018 and more recently as it relates to Bienstock, we were watching like hawks and actually, you know, at that point because we had thought we were going to work on a fork talking about it daily together and, you know, playing these protocols together effectively.

ESD, DC, even. TSD Like all of these iterations on ESD, that had slightly different epic times and slightly different parameters, it was just from a data collection perspective, really important and helpful when it, when, when, when then it came to designing a lot of the things that went into Bienstock. So we used a lot of those data points to figure out.

I think there was even like our SD is like some crazy iterations that we watched of ESD play out and all that data was super interesting and helpful. So a little bit of old and a little bit of new for you. So Ken, would you be willing to share like any of the times, any of the protocols that you got wrecked on?

Like did you wear you any SD and ID, you follow that down to the zero or anything like this?

I'm trying to remember. I'm trying to remember which ones were good. I think ESD was profitable. DSD was profitable. DSD was not profitable. And then don't think I participated in R&D, if I recall correctly. So a little bit of up and down. But, you know, it wasn't like it was large dollar value. It was more just to experiment with the protocols.

But nonetheless, you know, very they were like they had very short fuzes. So it was interesting to watch them play out. Yeah, Yeah. They they were pretty short lived as well, some of them, right. The I mostly played with these things on Binance Smart Chain because when I, when they were alive on Ethereum, I couldn't afford the gas, I was just too to small fish, you know, to minnow.

So I was over on Binance smart chain just doing the forks of the forks, you know. And now I got like a little bit wrecked here and there, but nothing like I think overall I made more than I lost because of the just because of the ability to, like, take profits and get out and stuff like that. But onto the exploit.

I don't want to spend a lot of time on what happened, but like just can you give just a quick, quick little just for those people that are here that don't don't know what happened? Like what what happened just very, very simply like to bienstock so and happy to go into it more depth if you'd like. But the short version is that on Sunday, April 17, an attacker was able to take out $1,000,000,000 flash loan and deposit those billion dollars into the silo and acquire a supermajority of stock and use that supermajority of stock to commit a bip, which they they, you know, basically used to maliciously attack the protocol.

So in short, there was a lot of sophistication that went into the attack. It was sort of a Trojan horse to some extent because the attack or made it seem like they were trying to donate funds to the Ukraine. In fact, they did end up donating funds to the Ukraine, but they also stole around 76, $77 million from Bienstock.

So I've read a few articles about this in a, you know, some tweets and stuff like that. And the way I understand it, in a little more depth than what you've said was like they they passed, they put a pit, they put two pips in, right. And one of the pips was like, Oh, that was a mistake. Sorry.

And I want this beep to overwrite that bit. But that other beep had had something in there that allowed them to like, you know, use another contract to basically control some to make some choices or something like that. So it's not quite so they deployed two nearly identical pips beep 18 and 19 and beep 18 called an address that at that time had nothing associated with that address.

The beep 19 was identical except it called an address that had at it what was registered effectively as bip 18 dot sole on ether scan whereby it looked like that was code two mint 250,000 beans and donate them to the Ukraine. And so in effect they created what appeared to be, you know, that they made a mistake when they originally proposed BIP 18 and submitted it to the wrong wallet.

And so they re proposed it as however, after 24 hours when they launched the flash loan attack, they simultaneously at the exact same time deployed via create two, which is an OP code that facilitates the deployment of code at a or a contract at a deterministic address. They deployed the malicious code to the previous address that at the time was or prior to that was totally blank and that was what they used to exploit the protocol.

So up until the very moment where the attack happened, you know, it looked like, you know, it was a little strange, but there was nothing, you know, there might have been a yellow flag, but there was there were no red flags up until the actual moment of attack, if that makes sense. Yeah. Yeah, exactly. Because even if somebody went digging in there and they saw that contract and it would be like, oh, that contract leads to nothing.

That agent, that wallet's empty. So it would have to be you would have to have foresight in order to see that that contract will eventually have something to some extent. Right. Let to, to talk a little bit more about the exploit like the money or basically what they exploit did was it emptied all of the silos. Right? So it took all of the LPs out of the silo and then the flash loan, basically the flash loan contract basically sold some of the beans and then dismantled all the LPs and retained sort of the the exploiter, retained some beans, but then took all of those stablecoins that were paired with the beans and bought a bunch

of these. And then tornado Oh, wait, is this is this accurate? So sort of I kind of lost you there just to just to restate it, the what the before the attackers facilitated was the their they could withdraw all of the assets from being stock effectively and so then they were able to take out the liquidity and that facilitated the the withdrawal of all of the value from from being stopped.

They didn't actually mint any extra beans and sell those items against the liquidity. They just pulled out the liquidity, if that makes sense. Yeah, it does. The but did they actually sell any of the beans that they were able to pull out or the amount of beans sitting in their wallet is the entirety of what they were able to pull out the Indian.

I actually don't know the answer to that. Hmm. Okay. We could we could probably look at look at the transaction and figure it out. But yeah, I was just wondering, that's just a question of wonder. It doesn't really make a difference. But yeah, I just wondered. So here's a question. You guys got exploited. Now why not just give up?

Like, why not just be like, Yeah, this is we got exploited, we've got no funding, we've got no money, Let's let's give up. Because you're obviously not giving up now because we'll go out into the barn raising all of this kind of stuff after. But I'm wondering what makes you decide, Let's not give up, let's keep going. Well, you know, would push just push back a little bit there on the personification in the sense that Beanstalk was stolen from and Beanstalk was attacked and Beanstalk is down bad, but Beanstalk is not out.

And ultimately it has nothing to do with us individually. It has everything to do with Beanstalk in the community, around Beanstalk and in practice. I mean, what happened over Sunday and Monday was one of the most inspiring and humbling series of events of our lives, whereby a ton of the contributors and community members that were working on Beanstalk in some capacity City basically just reached out and said, Hey, you know, we love Beanstalk, we're not going anywhere.

And you know, this thing is going to rise back up. And we, you know, how what is there to do other than to, you know, to run with the people. Right. And so we've been incredibly inspired and grateful for the incredible community that has echoed a lot of the sentiments that you were saying, Cesar. But if anything, feel like we've been riding on the backs of and the heart of the community over the past week, because on Sunday when we woke up and saw what happened, it was like, you know, really had our hearts ripped out.

And from an even a logical perspective, Beanstalk hadn't had really any sort of venture backing or traditional backing to date. And the concept that there was some bailout coming along. What we've seen from the Wormhole Hack, for example, just seemed totally impractical and impossible. And so it's like, where does Beanstalk go from here? But it really was one of those incredible things that just people, people very clearly were not willing to let this die and neither are we.

Yeah, it's awesome. Yeah, you can clearly see it like I was in the war room there and it was a pretty big war room for full of community members and it wasn't run by the the team, so to speak. It wasn't like the team like, hey, let's everybody get together. I'm calling everybody that you can. It was like a community groan, like war room full of like ideas.

And I saw you. I knew you guys were there. At least some of you, but you weren't like you were kind of just absorbing it and just, like, taking in like, what was did the enthusiasm in the the go getting this of this community to want bienstock to keep going. And I found that to be inspiring. Like I've been in a few war rooms and I've been around a few like hacks that have been pretty big and devastating.

And it's not something that's easy for a team to take. Like it's not about like your money. It's about, you know, you feel the weight on your shoulders, right, of something like this that comes down. Right? So I found it to be pretty inspiring to to this community how they came together. They were brainstorming so many ideas and just everybody just, you know, respectfully, like, you know, talking about like, what can we do?

What can we do? How can we keep this going? How can we fix this? And of course, like everybody does have their own like incentivization, you know, that they do have and everybody wants their money back, of course. But like at the same time, people can also just take the loss and go on. Right. Like that's also possible.

Right. So, I mean, I'm with you on that and I do. I do see that. So let's move on to the the barn race and let's talk about that a little bit. Like I read through the article that you guys posted on the blog. And I notice that there are two phases. So when I was talking and when I was in the war room and I was listening to, this wasn't part of it, but there's these two phases.

So let's talk about phase one. Like what is phase one of the barn race? So it's funny, right? You keep saying, you guys, and I think this really does go speak to speaking how how, how involved we are at the ad this time was basically almost entirely uninvolved in the posting of the thing, but nonetheless can certainly speak to it.

But, you know, I just I think it's worth highlighting because of how awesome it is that, you know, there are so many different people doing different stuff at this point. But nonetheless. So if we what is the barn raised? And as you said, there's two phases to the barn race itself. We tend to think about it as having three parts to it.

But the first part is the barn race itself, and it does have two phases. So from our perspective, it's a little bit easier to think about the the first part in the context of the second part. So there will be a three day sewing period whereby for those of you that are not familiar with the in stocks model, sewing is lending to the protocol.

So over a three day period people will be able to lend to Bienstock and the amount of soil, the amount of dollars that are value that Beanstalk is willing to borrow is going to be around $7,677 million value to try to recuperate up to 100% of the funds that were stolen. And over those three days, people can lend up to the 77 million to be in stock.

The whether the interest rate on those loans is going to start at 20% and increase 1% every 10 minutes for three days and to like 452%. And in short, as is the case with normally bean stock pods, the pods receive for participating in the Padres will be paid back on a first in first out basis. However, unlike normal circumstances, this the barn raised pods will not go to the back of the pod line and instead they will be part of a new barn raised pod bond, which will start at zero and will receive a third of all new bean mints until until it's been fully paid back.

And so phase two of the barn raised is the three day sowing period. Now, phase one prior to it is to try to answer the question of how should the market price the the barn race, which is very difficult to do. There will be a seven day bidding period under this proposal whereby people can bid an amount and then a whether an interest rate and what what there will be a bonus for for bidding earlier effectively to encourage participation in the bidding process.

And the concept is that during the three day selling period, let's say you bid at 100% whenever the weather gets to 100% during the three day selling period, assuming that there is still soil remaining, then your bid will clear effectively and you'll get in line. So that's that's how the barn race works. Okay. Now I've got a couple of questions on that.

I had assumed that the bidding period was to mitigate some some of the time zone advantage to to certain people. You know, like if you if you were to launch it right now, different people could participate and other people could not. So that's what I kind of assumed that the bidding period was for, and it might still have that positive effect.

But I do like the idea that like that you're able to set the perimeters of the pods that you're willing to accept, Right? So what does the UI kind of look like? Like is it going to be basically like, I'm willing to give $1,000 and at a 100% interest rate and then basically that'll just happen and all of your pods will be at 100%, all a thousand pods or whatever it is.

Or will they be like the first one, 2,000%, the second one's 1,001%, and kind of like a normal weather type thing. Well, so your bid will be for a fixed weather. So they would all clear at the same weather. Now, I don't think you'll be able to bid 1,000% because it'll be capped at whatever that maxes 452%. But in theory, you know that you could bid whatever you wanted.

Now, the the idea of the time zone, it's interesting, frankly, I hadn't really considered that. But it obviously, you know, literally helps some people. Yeah. So the sowing period is like, what's the word I'm looking for based on the fact that there's not enough bids, Like if there are $75 million worth of bids, then there needs to be no sewing period.

Correct? Well, if there were bids greater than the total amount of soil, you would still expect the selling period to happen, because it's a question of what is the most efficient price for being stocks, that it can clear all of the soil at effectively. So there is a case where the sowing period doesn't last three days, but there's no case where there's no selling period.

Okay, I see. Because if everybody bids like, let's say they're willing to accept a thousand or 100% and the soil turns on it 0%. So then there will be a time between zero and 100 where people can start to 20. PETTITTE Yes, exactly. Okay. Okay. Okay. Okay. I get it. I get it. Now, let's say it's a ten day barn race, right?

Why not have the barn race just go forever like the sowing period? Why does the sowing period have to stop? Why can't it just go until the 75 million is achieved? Yeah, it's a great question. So there's there's a couple of things here. One is philosophically, stock has to move forward. It's impossible to now get people to start lending to bean stock and just have this perpetual thing going on until it's felt.

That's a crazy proposition to ask people to participate in at the beginning. The second thing is from a structural perspective, the the barn raise has two other phases. One is upon completion of the the barn raise based on the percentage of the total soil that was available that was sown Beanstalk will scale. So let's say 50% of the soil was sown.

Beanstalk will then scale by 50%, meaning all of the beans, the stock, the seeds, the BDB, the pods, everything will get halved, such that the state of the system is exactly the same as the state of the system prior to the attack just scaled down. And so the would in this context, the concept of having a perpetual fundraiser is very unattractive because then, you know, it basically limits the time at which this can happen.

And just as well, you know, now there's just a waiting game. And furthermore, from an economics perspective, if it's unclear what the max weather is at some point and how much time there is, you know, you do lose some some some of the time preference here that there's an opportunity because of the amount of attention that bean stock has in front of it.

So for a lot of different reasons, I think it just makes sense to try to capitalize in the short term. Yeah, I guess that makes sense. Like it would be pointless to even talk about a haircut if it could so forever, right? There would be no haircut. There would be never the recovery haircut. Right. So let's move on.

But it's also unclear how how long it would take or how Beanstalk would actually restart. So a lot of different things are unclear. So let's move over to like the people who were like the victims of the the exploit and how are they going to recover it like you did. Explain it, But maybe we can really reiterate. It's clear this is really the third part of the barn race or the third the third thing.

So in addition to the the scaling whereby let's say you had 1000 beans deposited in the silo with a thousand stock on top of that, you would now have an if the if it was scaled by 50%, 500 beans and 500 stock. Right. So there is, there is that haircut or scale. However, the the money that is being lent to bean stock is effectively being used to recapitalize the people that had their assets stolen.

And therefore it's it's unlikely for lenders to be comfortable giving the money to the to the people that were stolen from without without some sort of guarantee that they're not going to immediately run for the hills. Because, let's be honest, these are a lot of people that just had all this money that was stolen from them. If it's given back to them, are going to want to leave as soon as humanly possible.

And so the third stage is a vesting schedule whereby let's say you get 500 beans in your 500 stock. If you want to withdraw your 500 beans from the silo and sell them, you you have to there's a vesting schedule whereby you will will have to forfeit the person like you can only claim the percentage of assets based on the pot, the barn raised pod mine that has harvested.

So I didn't say that very well. The percentage of the the 500 beans that you have in the silo you will be able to claim at any point in time is a function of the percent of the barn raised pod line that is harvested. So if the silo deposits or the bean holder, 100% of the money that has led to bean stock during this crisis has been paid back, they don't take any sort of additional haircut or forfeit.

However, if they claim and want to want to exit when only 30% of the barn raised pipeline has been paid back, they're only eligible for 30% of their assets under this proposal and would have to forfeit their rights to the rest of them. And that then creates an incentive for others who are also waiting to wait longer because it's, you know, it's a game of chicken where if people leave, then the people that stay benefit.

So that's the third part of the structure that's designed to align the interest between the people that are lending to the protocol and the people that are having their assets recapitalized. Okay, It makes sense. Basically, the people who were exploited have to in order to get back all of the funds possible. Like if you guys raised 75 million in order to get back all of the funds possible, they have to wait until all of the pods in the barn race have been hatched.

Right. So that leads me on to the next next kind of question about this is when does the hatching start? Like, are you guys going to produce liquidity pools at the end of the bidding cycle? And then the sowing period is going to actually require the buying of beans. So then pushing the pig up and then pods will start hatching?

Or is it going to are you guys going to create the liquidity pool after the sowing ten period, The day sowing period, and then further after that, that's when the beans can start to print. So again, I'm going to push back on the you guys. Yeah, I'm sorry. I'm sorry. The community. I'm sorry. I keep saying when I say you guys will would call it the beans stock, not populace.

Okay, we'll call that. Okay. When I say you guys, I mean important distinction. You're right. You're right. But but the concept is that the the protocol doesn't really have any beans to sell. And the normal concept of the the protocol can measure based on the price of a bean and the liquidity in the pools. How many beans it needs to borrow is fundamentally different than the current problem.

Even stock needs to recapitalize liquidity pools. There are no liquidity ports at the moment. And so instead of the normal buying and so in beans, stock is likely in the in a classic fundraiser structure, which is something the stock has done before except SOS in other stablecoins effectively, if that makes sense. Yeah. So just to be to be very clear here, you're the liquidity pool is likely to be created after the ten days and then because that won't be in there's no liquidity pool so there isn't even a bean token at the moment.

The token itself is corrupted. So whenever bean stock is unpaused, that will be when there is a new liquidity pool, a new bean token, that will all happen at the unpause effectively. Okay. Okay. Yeah. Yeah. Here's some more. There are there are two types of people who were exploited. There were people who had, well, maybe you can call it three, but let's call it to the people who were in the silo who had basically had beans or supplied usdc or stablecoins of some sort and were in the silo earning return on investment, right?

Earning. AP Why? And then there are also the people who had sold and were holding pot. Right now the question becomes based on those pod holders, why not? Instead of giving them back their pods, why not give them back their initial investment? Because some pods were sold at like 6,000%, whether Right, 6,000% ROI. So instead of giving them back 6,000% ROI, why not just give them back the initial money that was put into those pods?

Well, there's a lot of different things that in theory you could do the the goal at a high level, Bienstock wants to minimize as much of its debt. It's not going to honor, in theory, it would like to honor 100% of its debt. So the concept is what's a reasonable proposition to lenders that are going to come on now and reasonable to old lenders and current stockholders.

Right. So there it's there's a lot of different ways to go about it. But in short, the haircut that's proposed whereby if only 50% of the funds are recovered, all of the pods will get cut in half. That will more than halve the return of every pod as compared to its basis effectively. And so there is an argument to be made that at this point in time any pod in the pod line has a pretty low basis in beans.

But, you know, from a theoretical perspective, Bienstock should still want to minimize as much of the bean, the pods it's not going to honor and therefore taking a very aggressive stance on a pod haircut of negating all of the upside and returning just the basis. I think that would be very, very, very aggressive. So it's possible, but probably not necessary and very aggressive given the resources we still have here.

I'm sorry. Yes, you did. I needed my mike and talked to it for a minute and a half anyhow. So back to it. So also the other idea is that like the it would increase the amount of money that is required in the in the barn race if you're paying the pod holders as well because right now you're only you only need to worry about recapitalizing the lost money that was in the silo.

If you're also I would disagree with that because the pods don't require any recapitalization and still a few drop. So the only assets that really need to be recapitalized are the liquidity pools. Right. So whether or not the amount of haircut that that the pod holders take actually has no effect on the value of capital. The stock needs to it needs to try to acquire it.

No, I know what I meant. What I meant was if you were to give them back their initial investment, then you would need to race that initial investment on top of what was in the silo. Oh, but no one would ever want to do that. No one's going to let to be like, That's just crazy. I think it's also important to note that like the pods that are the old pods, the exploited pods or whatever, the old pods, they're not they won't get that vesting haircut because they're behind the the barn pod line.

Right. So there's there's two things that one, there's a haircut, right? There's the haircut and then there's the besting. So the pods will be haircut. Assuming the full amount of soil is not shown. But then the question of vesting is slightly different, whereby the pod line is going to receive a third of all new payments going forward. So in short, it will be a see a decreased payout to the to the old pod line and further dilution on that front.

But then under the current plan, when the pods harvest, then there won't be a second additional vesting schedule. On top of that. All right. All right. I get it. So that takes me to my next question of the 3030, can you tell me if this is what being staff wants to do or not or is like as soon as the the fundraise is done, the barn raises done, the barn pods are at the front of the line, and then people start sewing or buying beans.

Beans goes above pig and then it starts burning. Who gets the first three beans? One bean goes to the old pod line, one bean goes to the new pod line, one bean goes to stockholders. Okay. And the people who. So the person who has the old pod gets his bean, it goes into the silo because that's just normally happens, right?

So then if he tries to pull out or they could try to get here, they know the concept is the assets that were there's going to be something called a ripening contract or whatever in theory whereby the assets that will be whitelisted in the silo so are let's say there's only one LP token. When it starts, there will be beans, there will be the LP token, then there will be unripe ind beans and unripe and LP tokens.

And the concept is if your pods harvest and you deposit them into the silo, you're depositing beans, not unripe and beans. Unripe and beans would be the beans that are subject to the vesting schedule. Got it? Got it. Okay. Now, is there any reason why, like the the community has not gone with any VCs or was did none come up out of it or did you guys is there some sort of explanation why there wasn't just we didn't just get a bunch of VCs you're talking about when when beans are launched or now.

Right now, Yeah, right now. Like, like instead of doing a barn race, why not just ask VCs to, like, hey, you know, give us $75 million and we go like, like, what's the reason for there not being a VC? Well, there's a couple things. One, yeah, there's still something to be said for If there was an offer made to the Dow to try to take all or most of the barn raise, that would be something the Dow should consider.

Why that hasn't happened? You know, there's a lot of reasons in theory, from our expectation and our conversations, it seems like there's a lot of, you know, venture capital that is inclined to participate in the barn raise, but not on the scale of, you know, the full round, let's call it. And so that's one of the nice things about the structure of the barn race is you do get the best of both worlds.

Yeah, I see. It's also a good too, because then, like the people who were exploited, they can, if they choose to, they can double down. They're not like basically you're not selling the protocol to the VCs, basically to have the pods for the rest for for the first bit. So I like that. That did a what else? Okay, this is a little this is kind of my last question, and it's about this.

The the protocol is, is a is generally is is the future of beanstalk being for most defi protocols they have a tapering of API like API goes up and as TVL grows API goes down and nuts for different reasons. Right. It might be because of tokens per second, right. But it's also because of like demand, right. Like especially with something like beanstalk, like beanstalk demand has to stay high in order for the API to stay as high as it was.

Pretty exploit like I've been in business up for quite some time now money inside it was like 20 30% or something. And then all of a sudden they went 60 and 100, 128, 200, 300. It just ramped up very quickly. Right. And that's because of demand, right? The payout is going up, up, up, up. Do you think that Beanstalk will be able to maintain some high API for a long period of time, or is it more likely that it's going to go ramp up and then go to something like 15, 20% or even something lower, like five or 10%?

I know it's impossible for you to know for sure, but like what are some expectations of people? Like when, when will the TVL be so high that it will be really hard to maintain a high API in in like just it's an opinion, right. I get it's your opinion that I'm asking for. Well, the main question is about scale and time horizon between here and true scale that you're talking about.

The theoretical scale, there's likely to be periods of high APIs and zero APIs in the silo. Realistically, at least on being senior rich. Now there's always stock APIs, but that's different Now when it comes to at scale, you might expect that the the silo APIs and this is like at true scale, something like the silo is to represent the, the actual rate of inflation or something like that.

But it's unclear. It's, it's unclear what what the system would settle to at, you know, hundreds of billions or trillions of dollars of TVL. But between now and then, you're likely going to have periods of time where there's very high APIs and very low APIs. Yeah, of course, of course. And like it's impossible to say, like it's just, you know, people will ask, you know, like, like if I, if I invest in this, like what?

When will I get my money back? And that's a question that is very hard to answer because it depends on, like you said, like on scaling, on inflation, on maybe we can I like to, to think of it as demand, like places to put beans where people don't sell them. People don't want to sell the beans so that the price stays above peg and the printer keeps printing.

Right? So I think this is kind of a difficult one for people to like, kind of visualize that there's there's no answer to this question. Like you can't say for sure that, you know, it will br at this much for this low. Like it's just not a question that can be answered right? But maybe we can look at the former roadmap like what were some of the things that you guys were working on?

And again, you guys, I mean, Bienstock in general, all of you guys and what were some of the things that were being worked on prior to the exploit that had to go into the back burner or put on to the side and that might come back soon after the barn raise. So from a development perspective of obviously the security attack on the governance is a real hit.

You know, and and it and it stinks. But the long and the short of it is the upcoming development plans were focused around the generalized silo with generalized converged generalized minting and the being farm. And we expect that the relaunched version of Beanstalk will include all of that. So long story short, there's obviously some delay associated now with the audits and stuff, but at a high level, feel like the the development timeline isn't crippled by this.

You know, if if it's maybe pushed back to three months. But it's things are still full steam ahead and there's a variety of different developers that continue to work full steam ahead on Beanstalk despite the tenuous circumstances. Yeah, of course, of course. Like, I'm not expecting, like, you know, second week there to be like new, new, new powers and stuff like new updates and stuff like this.

But like one of the things that I was looking forward to in the silo was like the ability for the silo to deploy LPs to convicts to farm CRB and CBCs. So like this is not off the table, right? Like the exploit does not stop that from happening. Right. It's just a question of when it'll happen. Exactly. So like these are the kinds of like goodies like that I'm, I was looking for like something specific like that.

Like what kind of things might, might have been happening right now if there was no exploit, you know, last last week or so. Now I know it's not one might be the best example. Cesar. Mm hmm. Okay. Okay. Yeah, that's good. That's good. I don't really have any more questions, I think. I think maybe we can, dumpling. Maybe you can.

Some people from the audience, if they have any questions. And if not, then we can say our goodbyes. Well, unless you guys want to say anything else. Sure thing. I would just say, Cesar, that I really appreciate. You know, you mentioned the the war room there that we had, you know, on on Sunday. And I really appreciated you being there and lending your, you know, your support and and just being, you know, an adult in the room.

I just feel like I really appreciated you hopping in there and and yeah, I just wanted to say that and, um, your video being the initial way that I, that I found being stocks are just you know that your videos really do you know I think have a wide reach and and really appreciate appreciate that so yeah well go ahead open up for questions if folks have questions you can raise your hand I'll give it a minute and know people have to figure that out.

And if not, no worries. We're doing pretty daily events, so we'll have something up tomorrow, probably a AMA in our Discord. So you can look for that. We're doing those typically in the evening Eastern time. But okay, if there are no questions, then we have we got we got one question there. It's like I, uh. Ismael? Hello? Can you hear me?

Hello? Yes, well, I just have a quick question regarding the, uh, in the proposal, I saw that there was something about a bonus, so I just wanted to know what and, and it said, like, still requires some details to be worked out. So I just wanted to know what's the deal with that And if we have any more update on it with the bonus.

Yes. Okay. So, so don't actually have one think that that there was some decision that was going to be made on it today, but I'm not privy to it at the moment. So I think that the the questions were around the slope, the amount of the bonus and around whether to have it be on the principal or on the whether and I think it was people were leaning towards the weather.

So the concept is that means that let's say the bonus, I think this is the in theory what people are thinking with, but nothing's final. It'll start at 21% on the first day and decrease until 0% at the end of the bidding period. And if you if your bid clears during the sowing period, whatever, your bonuses will get added to the weather.

So if your bid is 100% and you got a 21% bonus, you get 121%, whether for something. Okay, cool. That makes sense. Thank you.

And bringing up Birdie Barty, the soil sniper, at a quick question around So next week when the bond raise begins, do we have any sort of campaign marketing campaign? I know that there have been some discussions around PR reaching out to all the journalists that have covered the hack itself to, you know, tell them the next part, the story.

But do we have anyone working on some sort of like bigger sort of communications and explaining the benefits and why this is such a great opportunity for people to get in? Because I want to know what I can start copying and pirating and I can say I like get behind that message and that vision as well. The short answer is yes.

I think there's a lot of different materials being put together. If you ask in the Discord, I'm sure people can direct you towards them. Don't know the best place to find them. But the the long and the short of it is there's a lot of different stuff. And we're also trying to talk to some of those journals we interviewed with The Wall Street Journal over the weekend.

So they're, in theory, going to be writing about the barn raisers. So that's pretty cool. And, you know, hope to hope to have a lot of different eyes and ears on this in a lot of different ways. And I think people are working pretty hard to make that happen. Amazing. Thank you. I'm very excited to snipe some soil again soon.

Thanks, buddy. Okay, I got one more here.

Crypto punker. Yeah. Hi. Just a quick question on the bidding process. If I don't bid in the initial phase, I might automatically locked out out of phase two. Or could I just jump in at phase two and enter? No, there's. There's nothing that precludes you from from participating in the showing period. Okay. So do I have to look at phase one, kind of like a, I don't know, a committed, soft sounding?

Well, it's not a soft, you know, the cap. If you bid the only way your your capital won't be lent to bienstock is if there's not enough soil. By the time at the sowing period, your your bid would clear if that makes sense. But yeah, not sure if you define that as softer. I you know, that's how it works.

I used the word committed because I could can come up with that with a different kind of terminology. So last question makes more space for other people. So technically I can put in a distinct bid at the, at the, at the far end. And when we move to phase two, I can automatically crank that in. Like I could go from 450 to, I don't know, 22% immediately, right?

The only downside being the loss of the bonus and obviously the the interest. Is that correct? Correct. Okay. That answers all my questions. Thank you. Oh, maybe one last one. Theoretically. Just for my good. I'm sorry. I got to go. Okay. I'm sorry. Oh, yeah. Sorry. This is. We did schedule one hour and probably a a call. No problem.

I appreciate so sorry. And to eight fold as well, but we'll we can take it forward. You can. We can take your question tomorrow. Thanks so much to Cesar Publius and everyone for coming out. But, uh. Yeah, sorry, guys. We only booked an hour for this, so do appreciate it. And we'll see you all soon.