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DAO Weekly Meeting #57

Date
February 2, 2023
Recording
https://www.youtube.com/watch?v=HXKyiu5Q45Y
Timestamps

0:00 Operations update 4:15 Development update 7:03 Design update 13:07 Publius updates

Type
DAO Meeting

Recordings

Meeting Notes

Operations update

  • The budget BIP is live. This will fund Beanstalk Farms for Q1 and Q2. Halborn is no longer offering the seraph product until further notice. There will continue to be Beanstalk Dev Calls for a while

Development update

Design update

  • Working on a new chart using the assets from the Pod Market chart. This chart will be something similar to Pods, the goal for this is to test the scalability of these charts.
  • Working on the UX for how the Farm Balance works in the UI
  • The UI is done for Claim and Do X is done and has been turned over to the Devs

Publius updates

  • The current BIP is an important indicator to see where the DAO with how the development of Beanstalk is going. Publius wants to remind everyone how important these governance decisions are. It is not a good sign that Seraph was shut down right after the Seraph BIP failed. The Beanstalk DAO was going to be their first customer. Publius thinks that now is the time to start building, and we need to build things that are long-term focused. Publius goes on to say if we build proper decentralized products people will come even if the Beanstalk printer is off. When Publius deployed Beanstalk on-chain they thought all Defi needed was the money, but now they think that there is no real economic activity on-chain. This is why Beanstalk Farms and others are working on the stack. Publius thinks the biggest real economic activity is lending and borrowing. Publius thinks that most demand for stablecoins has been speculative. They go on to say it is foolish to just look at the price action and deltaB, instead, they think we need to zoom out and we need to figure out how to bring real economic activity to Beanstalk. Real economic activity in Publius’ eyes is taking a loan to buy a house or taking a loan to start a business. The goal for Beanstalk is to smooth out these cycles and the way to do this is long-term utility-based demand for Bean. Publius thinks these are the conversations the DAO needs to be having. The DAO should also be talking about how to fund and what to fund these projects.

Transcript

All right. I think we can get started. How's it going, guy? Ahmad No complaints. What's. What's latest at your end on the farm? I see that the budget is up for voting. Yeah, exactly. I guess since. Yeah. Update Since the last hour meeting on the proposals, the budget proposal went up. Ah, the budget debate went up yesterday. That is just as a reminder, both a combination of both the Q1 and Q2 budget for Bienstock Farms and since the initial sharing of the draft, the size of the audit fund or the dedicated funds for funding various security audits was increased from 200 to 500 campaigns. That was a decision we made after some discussions about particularly in the context of the budget being extended for over the course of a five month period and, you know, the various audits we want to find across Hobaugh and other auditors, particularly Katrina competitions, things like that. I felt it was prudent to make sure that those weren't going to be running low any time soon. Also, the unfortunately, Halliburton showed some resistance a couple of days ago that they were at least temporarily discontinuing service for their seraph product, which was yeah, extremely disappointing. There are a lot of folks on on both the Bienstock side and the Holborn side that had spent a lot of time on it. So unclear how that proceeds. But at the moment there were a handful of other governance upgrades and amendment amendments that were going to be proposed in the therapist that I think we're going to hold off and probably combine with anything that comes from a lot of the discussions that have been having and the discord around around governance, both in the governance channel and at the discussion that was yesterday that should have been uploaded to anchor. So we'll probably host to another one or two of those. And, you know, perhaps we can put out a back up or something like that with with a couple changes. For example, the stock delegation that was discussed yesterday, among all the other changes that were going to be proposed in the upper OC. And do we have a date on when is the next call that follows from yesterday's or follows on yesterday's? We don't, but we should get one. All right. And I understand that we have a development call as well scheduled today. Yeah. Apologies didn't get to it. Didn't have a chance to announce upper side. But so last Friday we had had what we called being started our dev call number one, which was at the time sort of a brand dump of all the all the things that we intend to work on up in the next couple of quarters. But few of us, you know, BFC folks who our etc. are going to be sitting in here in the barnyard at the top of the hour to talk about sort of figure out all the in-between work. So like, you know, option indexing stuff that needs to be designed for tractor in discussions around where to put the UI for. Well you know, the road map we published a couple of weeks ago is strictly on trend development. And, you know, there's obviously a lot of work to be to be done in the middle and on top. So we're planning on discussing that at the top of the hour here in the Barnyard. Okay. And lastly, with regards to the budget that we have six more days for that. So it ends on February eight, and I see that is, I think, close to 20 million votes so far, unquote, on around 45. One of the sticking. Yeah. Good turnout so far. We'll see how it goes. We'll see how that goes. Anything else? I'll leave it at that. Thanks, Matt. Thank you. Senator, how are things? Are Toyota up to bad mood? Just right now. A message for everybody. The same links to some buyers in the Senate in the In the Barnyard chat. This is kind of a list of stuff that's in flight right now. So first and most importantly, I make clear this on the on the wells front to PR this week. So this aquifer PR, which is basically adding a permissionless registry for wells and then the pumps PR, which is currently pending and we're going to start a team code review of this today pending some final changes from people as quickly as can speak, more maybe to the development process on that front. In a minute. But ultimately trying to drive both of these to be completed by the end of the week and then move those to sort of the secondary wells audit. So as a reminder for the first part of the Wells audit included the core wells code and then the consent product to pricing function and some of the deployment systems. And then this follow up audit, which will be performed by Holborn and probably also one other new auditor that we're working with, hopefully working with will be completed. So it will include the pump that Bienstock will read as well as some of the registry systems which I can talk a bit more about it. If anybody's interested on the US, there's one other BIP or protocol upgrade besides the besides the budget prep that's out right now, which is to summarize improvements. We've made some brief factors to this and how one will do a review. There's a link to the three partners there. It's also going to include updated documentation of a lot of the related facets, which is something we've been we've been doing with all upgrades as a part of our effort to make it easier for auditors to to jump in and understand Bienstock as well as from the developers to do this. And then on the UI front, there's two paths out right now related to this claim and do X functionality, which which we read means has been working on as well as some upgrades to the SDK which add things like Sila withdrawals and, and adding the swap functionality to the UI and a couple other things. And then we're also discussing some, some sort of smaller cosmetic upgrades related to charting which will will hopefully implement this this week. If you want to follow along there, check out the UI updates channel. Besides that, just yeah, I mean excited to kind of put keep pushing wells for. Thank you, Chad Switzer brings hammered how's it going going well how are things I sure I'm good yeah I have quite a few updates this week and this week I spent a bunch of my time building a demo. I got first version of a demo for a different market with an asset structure sort of similar to pods, I think I've talked about this in previous weeks, but hopefully this will help us sort of gauge appetite from, you know, other potential consumers of a three dimensional charting interface to display market depth. Happy to dig into that. If anyone has questions and it's sort of a mouthful sort of along those lines, I'm starting to think about the scope of the end state of sort of the UI charting capabilities for markets that wells and tractor intended support and sort of how all of this pod marketplace work fits into sort of the onset of those. And so hopefully we'll we'll be able to converge on scope for that during the dev call today. So, you know, one of the pieces of work that we've been kind of thinking about for the last few weeks and working on is updating the input fields throughout the site to make the source of your balance a little bit more obvious and give the user some more granular control over which assets they're using in a transaction, whether it's your farm balance or your circulating balance. And this work kind of prompted a discussion about the really, really bad user experience of the farm balance right now. So we're starting to talk about it and, you know, hope to sort of make a lot of improvements on how the farm balance fits into the UI in general, but hopefully we can get that to a state where it's a lot more usable. So you have opinions or thoughts there. You know, feel free to DM. Lastly, Chad sort of touched on this, but we've sort of completed a first version of the user interfaces to add claim harvest rents plant and then root to any transaction to save gas. So this this work which will sort of live on each transaction module on the UI, sort of prompted a I don't, I don't know whether to call it revamp but sort of like a discussion on the UI for senior edge and other sort of like, you know, revitalized and seed to see if we can make that feel a little bit more intuitive than they are in their current form. So hopefully reduce some complexity there. Hopefully we'll have an update by the next meeting with with a better experience for for both that additional claim operation and then the sort of base claim operation. So I'm happy to dig into any of that if I ask questions. But that's that's sort of what we've been working on and I have a question to set up. So you said that you're working on a UI for a market that's not the broad market marketplace. That's right. Yeah. Can you give us an example maybe on on what are these markets that we expect them to be out? Yeah. So what are the discussions we've been having is that pods are sort of this really interesting asset because they have this like ordinal structure to them and so the way that the pod marketplace UI is currently designed sort of allows you to inspect the depth of the pod marketplace. Sorry, the way that the UI is currently does that I know it's not live on the site right now, but allows you to sort of like inspect the depth of the pod marketplace along like a curve. So you can imagine the x axis being the number of the pods or the place in line, the Y being the price, and then using color as a z-axis to demonstrate depth. So sort of a thesis here is that there are other assets for some sort of a similar structure. So you can imagine futures, for example, have sort of a similar structure in the sense that they have this ordinal structure based on when they expressed and, you know, hopefully well, at least we've taken a first attempt to try and overlay the color, as does the axis on other futures, specifically Bitcoin futures market and yeah, so the idea here is like maybe there's been some discussion about, you know, this this might be something that's potentially valuable to other users outside of the stock ecosystem and maybe some centralized exchanges, maybe some decentralized exchanges might have a use case for this. And that's just something that we're sort of exploring on on our end of things. So pretty early. But that's that's sort of the the quick summary there. Hopefully that makes sense. Makes sense. And I think it will be more clear when we see it out. So thank you, Steve Forbes, for for answering this. And of course, others have had further questions. Feel free to go and ask it now. Definitely hope to hope to share sort of a demo sometime in the in the next few weeks if if folks are interested in that. I know I am. So whenever something like that is ready, we look forward to it. Sounds good. Thanks a lot. Thank you. Achim. I'll pause here just to see folks who are with us have something that they would like to discuss. As a reminder, the end of this meeting is for the Dow. So even though we go through updates from the firms, the intention officers to discuss any topic that the Dow would like to discuss. So I was here for a bit and then maybe we can chat about what companies okay. Published. Any thoughts on your end made on this? And I want to highlight a couple of things. One, the the bit that is currently live is an important and important indicator of where the Dow is out and how aligned the Dow is with a lot of the development that's happening and things that independent of whether people are supporting or against it, it's very important that people participate in the discussion. So there's been a lot of really fruitful discussion in the The Discord channel about it. And we're just really encourage everyone to, over the next couple of days as the vote is taking place, to continue to participate in the discussion and vote as people feel it's appropriate. Now, do you really want to highlight how important these governance decisions are and think that the fact that Sarah is being shot down by HAL born in the immediate after aftermath of the sorafenib not passing should be an obviously it's it's not necessarily right to infer that correlation equals causation although they did mention that they were very surprised that the bill didn't pass. And in the context of the fact that they believe being stock was their first client or the Dow would have been their first client, that this likely was a a big deal for them. And the result is that their whole program is now being shut down. So the the Dow does have a lot of power. And I think that it's on all of us collectively as members of the Dow to both participate in high quality discourse and discussion in the case there, it really wasn't any discussion. And then the bit failed and things like that are red flags from our perspective. And then separately, as the Dow, I think, and to the governance call that was referenced earlier in the in the Dow meeting, having these types of calls and ultimately coming to some resolution on how to improve governance in general is very important. And I think that more and more over the next couple of weeks, or I would say more and more think that over the next couple of weeks, I feel it's very important for the Dow to come together and improve the governance situation pretty significantly. Otherwise, I would encourage everyone to participate in the dev calls that are happening. There's a lot of moving parts in the ecosystem in and around the ecosystem, and it's it's important that if not everyone is aligned on what should happen, that at least everyone is participating in the discussion. For everyone that wants to to help out is participating in the discussion so people have a sense of what they should be working on, whether they should be working on it with other members of the Dow or being stock farms and who wants to work on it. This is the time is ripe to innovate and develop really cool technology over the next couple of quarters before the crypto markets turn around. And there's a lot to be done. So passion, a lot of it out in the dev calls, it's really a wonderful experience for us and would just remind or encourage everyone to come and participate and hang out if, if that's something that interests you. On the, the charting library that three red Beans has been talking about want to just emphasize that this is exactly the type of work that, if it's done properly, should both be immediately usable by the bienstock UI for things like the pod marketplace. But more generally as the sophistication in and around beanstalk increases, like there are going to be futures markets for being stock assets, etc., that the work that is being done to build generalized tech is going to reap a ton of rewards both in the immediate future and hopefully the long term. So maintaining a larger view or zoomed out view on what's going on and why building certain things remains incredibly important and to that, to that point, I think that in the context of the discussion around the BIP and funding being stock farms, there's an open question as to how much development should be focused on Beanstalk exclusively, things like governance, things like the gate system, other improvements to peg maintenance versus things in and around the ecosystem that ultimately at least hopefully will lead to utility of being. And this is an important discussion that we should all have collectively, but do want to weigh in and say that independent of whether or not the bean prices regularly oscillating above and below its peg in the grand scheme of things, there is a large fundamental question as to whether the nature of the demand for beans is speculative or utility based. And in the past, because there has not been any use for beans, objectively all of the demand for beans has been speculative. And so there's a really fine line between getting the printer back on and having the system appear to be healthy from speculative demand and having the system running smoothly and oscillating to being priced above and below its peg as a result of utility based demand. And at the moment on this and feel very strongly that the current set of Defi primitives on the market are such that it is almost impossible to imagine any sort of utility based demand for beans, and therefore from our perspective, doing the hard work of building core architecture like wells that should be in the short term immediately help put a bean stock once implemented. But in the grand scheme of things, really should help create the base for which beans can be used upon is really, really important. So just want to want to take a moment to emphasize that in the context of all of this discussion on what to build, how it should be built, who should be building it, how to fund them that if things are not built independent of whether the printer is on and the system is growing, it seems like things are not going to be sustainable and really want to want to emphasize that when we started working on Beanstalk and even when we deployed Bean stock, this is something we've said slowly and in the past, but want to emphasize again, we had the misconception that the only thing that was missing to facilitate the utility of Defi was a competitive money, that there was centralization and carrying cost problems associated with current Stablecoins and that that was holding back the adoption of the tech. At this point, I feel like it's pretty objective that even though bean stock is live and there is the money which is relatively low and volatility and certainly has competitive carrying costs in the grand scheme of things compared to other stablecoins that there's no utility for bean, there's nothing that people are using beans for and therefore it's a reasonable basis, we think, to have that. It's actually the tack the rest of the Tax Act that is preventing the use of beans as money. So a lot of the work that's being done now is being done on the stack around beans or being stock such that hopefully beans can ultimately be used for real economic activity. This is generally, although not explicitly, the lines along which we wrote the the blog post that we published in the beginning of the year, but want to be a little bit more explicit about the fact that in our in our perspective currently there is not the ability to use beans for real economic activity in a censorship resistant fashion, and therefore not really realistic to expect there to be much utility based demand for beans. And if all of the demand for beans, speculative, it's unlikely that the system is going to be able to sustain itself over long periods of time. So this is something that is worth debate and discussion, but think that as people are debating and discussing the problem and in particular in the context of funding the Dow, that it's important to be discussing the substantive issues, which is why aren't beans being used? What would it take for beans to be used and how are we going to get there? So that's those are perhaps the the the right questions to be talking about. And I want to just throw our our $0.02 in to try to guide the discussion closer to those questions. Probably. Would you think or say that Bitcoin has, you know, economic code or utility that is used or it's also most speculative today? I think that in a lot of developing countries or countries where there high levels of inflation, as Bitcoin has clearly demonstrated, real world utility also for cross-border payments. But the the question as we see it is how to facilitate a and a base layer of technology that beans can be used on that can facilitate not just P2P payments but general economic activity in a competitive fashion to current centralized alternatives. So if you think about what that means in practice, it's the the question has to be answered in the context of how does the economy work today? And that's a perhaps as big as a question as you can ask. But the the basic starting point, we would argue, is that the majority of economic activity comes from trading and lending. And if you look at the current protocols, the facility trading and lending on Etherium are on any chain for that matter. They are dramatically uncompetitive with the centralized alternatives that the majority of economic activity happens on at the moment. And so if we I think to your question made, there is maybe a happy middle ground or maybe just a starting point where beans can be used for pure P2P payments as a as a currency without any sort of more sophisticated economic activity happening on top of it. And this is really a strategy question what to optimize for and what to optimize around and how time. I'm sorry about the noise about timelines factored into into that. So there is an argument to be made that there should be more work done trying to facilitate the use of beans for the adoption of beans as a as a currency, a medium of exchange and store of value for P2P transactions, but would would maybe push back on on that a little bit just from a what to optimize on perspective in the sense that particularly given that bienstock which just exploded and it's a very new currency it seems like at the margin, it's not going to be immediately competitive with something like Bitcoin or ether for P2P payments and it's probably more reasonable for as being stock starts to accumulate. A India factor or generate a all-india fact around being live for an extended period of time that other types of economic activity can can start to lose business. And in particular, I think that a low volatility positive carry asset is optimal for particularly a lending activity and so independent of being stock being traded as a medium of exchange in Defi and beyond over the next couple of years, I think that the real place where if we think about the adoption of real economic activity or the transition of real economic activity on chain or onto decentralized primitives, that's only really going to happen when the activity can happen in a way that is either dramatically economically competitive with current solutions and or and it's unclear whether it's and or the stack on which the economic activity can happen is totally permissionless and decentralized and censorship resistant. And given that, at least it seems like we're 5 to 10 years away from having a totally censorship resistant tech stack that beans or ether or any other decentralized currency can be used on. It seems like in the short term, the way to generate utility based demand for beans is to focus on the use cases that beans are likely to be very competitive in. And so sophisticated financial activity being denominated in beans because they are low volatility and positive carry is a very interesting thing that I think more discussion should be had about. But from our perspective, it's it's probably the lowest hanging fruit in terms of likely to generate utility based demand for beans. But it's worth acknowledging it's actually not that low hanging theory. If the current defi protocols were sufficient, then it would it would just be there for the taking. It would just require the deployment of a factory contracts that are already live or the use of factory contracts that are already live. But unfortunately, as we were saying earlier, it doesn't appear to us that there is the tech stack necessary to facilitate that, that real economic activity or use of beans in practice. So work on wells as a dex to trade and work on, I guess you could call it like a loan factory. Those are those are the projects that are being worked on that we are most excited about in terms of their ability to contribute to utility based demand for beans. But building this tech and in particular building it the right way where once it's implemented, it doesn't need to be reimplemented again and again and it's maximally composable and generalized does not happen overnight. And so there's a lot of really, really great work in our opinion, that is happening at the moment. To get to a point where there is utility based demand for beans, but it really it is worth saying that independent of whether people are buying Bitcoin to use it as a peer to peer cash system or using it to speculate that at this point it's not a 100% speculation driven and it probably took a couple of years at a minimum for demand for BTC to get to a point where it wasn't almost 100% speculative. And so there is is to be made that just focus on the speculative demand for now and the rest will sort itself out. But from a a long term sustainability perspective, don't think that that makes the most sense. So sorry for the long winded answer there, but I think it's a very interesting question. Thank you. Thank you. Publius and Albion, share some thoughts and I'm going to try to summarize what they said. So they're saying is that they think Polybius is a future where stables, being one of them, can compete with the real world. So it's setting a benchmark for the future. They're wondering what about now? And in their comparison, they're comparing it against facts used to use to see and die, for example. And they say the these coins to an extent today, you can say that they do have utility, but they didn't need any of the tech stack that, you know, Bienstock is trying to build around it. Do you have an explanation? How did they find utility without needing any authentic? I would would ask what I mean. I would ask, what is the utility that is really being talked about here? And I would argue that close to 100% of the historical demand for Stablecoins has been to speculate. So even if the demand for the STABLECOIN itself is not necessarily speculative demand because of the collateralized nature of the stablecoins, what the stablecoins are being demanded for is still speculation. So we would push back on the concept that there is effectively any sort of real economic activity happening on chain at the. And just to jump in here, I think one kind of data point that kind of backs up what Publius is saying is you go on all day and, you know, borrow interest rates to borrow. Usdc Dai FRAX are all around 3%, you know, with a traditional financial bank right now, someone could deposit dollars and receive an interest rate of around three and a half percent, if not more. You know, the federal interest rate is in the mid fours. So on chain interest rates are still significantly lower than interest rates for the real world. U.S. dollar kind of signaling that, you know, the demand for on chain stablecoins is still significantly less than the demand for the US dollar. And interest rates are highly cyclical. They go way up when there's a boom. And now that we're in a bear market, there's actually no demand to use the stablecoins for anything whatsoever. So the the point is that, you know, while there has been a $100 billion plus in demand for Stablecoins to date, it is all speculative in nature. Yeah, I think some of that can be reflected as you look into the market cap of these coins. So you see them that they're really up, you know, as as you expect or as the rest of the market rallies and then you'll see them dropping as that and a big part of it, as what we mentioned, is that there is an economic cost of selling opportunity cost. So what are you holding on to and when you can take them elsewhere? That may not only be the only reason. I mean, people may need, you know, money elsewhere and this is why they're taking them off option. But the trend that you would see is the same. Now, why do each of these coins have different sizes or market caps? That's just a of different different question. Also, do you think it's really important to how being stock has performed in various market conditions? During the last bull market being stock was incredibly for speculation purposes with other stablecoins during the bear market, you could make an argument that being stock has been less competitive than other stablecoins because it's at $0.94. But we would argue given the non collateralized nature of the protocol, that's pretty good. And so the idea that beans cannot currently compete with other stablecoins based on what they're they're currently being used for, we think is wrong. I would argue that the stylo, particularly a silo where there is a a system implemented, can facilitate dramatically outcomes and outcomes for competition. I don't know what the word is at beans outcompeting other stablecoins in terms of demand, speculate, whip and think that it's highly likely that a gauge system is implemented before the next bull market comes around. A lot of work is being done on an updated version of the Silo that should facilitate the implementation of a gauge system ultimately. But the point is again, that if the demand for beans during the next bull market is 100% speculative based and not utility based, that that will likely lead to a dramatic underperformance of beans stock during the next bear market. And so it may be it may sound foolish or sound ridiculous to be thinking multiple market cycles ahead, but that is ultimately the way that Beanstalk needs to operate. And therefore, it is important that the Dow is also thinking over those time periods and to to focus solely on the next couple of months. And in particular, it seems like the rhetoric in the discussion in the Dow is to prevent the price of bean from going down further or to prevent more deaths from selling to focus on the price action or the Delta B over the next two, three, six, nine months during the bear market to us seems seems much more foolish than zooming out and trying to figure out over a two or three, four or five year time horizon how we are collectively going to get Beanstalk to a place where it is. It is largely, largely sustainable, and that will only be the case if there is significant utility based demand relative to speculative demand for being. I have a question on some of these that I think the hold down here is on board when we talk about being stock needing utility beings, needing utility. And up until now, I thought I knew what that meant. But you said something earlier which kind of threw my world upside down. You said that you don't think the current stablecoins out there frax usdc you asset dai you don't believe those have utility. So I think our definition, while at least yours and mine are not aligned to what utility means and I'm going to suspect other people and might be in the same camp if, if you don't think the current stablecoins have utility, what do you mean by utility? So there is utility, but the utility is exclusively for speculation. So yeah, when I'm when I'm holding stablecoins because I'm waiting the bear market out, I wouldn't think I'm speculating or if I'm using a stablecoin to, to buy something because that's just what I can buy with it that doesn't feel like speculating or when I'm sending a stablecoin to, to somebody across the world because it's just an easy way to send dollars to them and then they can do something with. It that doesn't feel like speculating. So would would kind of push back on that and ask what what data suggests that there's a significant amount of payments happening in Stablecoins at the moment. And it seems like if you look at the demand for Stablecoins over extended periods of time, that the demand and use of the current stablecoins that exist is generally for looping and leveraging. And if you but I'd also push back on the contention that holding stablecoins during the the bear market is a use case that beans has failed to fulfill. So maybe, maybe the the payment rails is one one instance where you could say, yeah, Usdc has slightly better use for payments than beans does at the moment. I think that I think that that's like the Fiat on off ramp is a gargantuan problem that has to be answered at scale and therefore is not something that is, is the low hanging fruit at all. And it's probably a loss leader when it comes to the implementation of Fiat on and off ramp. But I don't want to get too lost in those we use. But the the point is that if you look at what and again would would reference the interest rates various defi lending protocols as the main reference here. If you look at the demand for stablecoins over time and also the supply of stablecoins, that's another data point that it is highly correlated with the general market and when the when the market is going up. But the main use case for stablecoins is for leverage and for speculation. So holding the stablecoins during a bear market as a store of value is is one thing and don't want to discount that too much. Although as previous was saying earlier, the interest rates on ARB right now are lower than the federal funds rate, so it's actually probably not the best place to be holding your money at the moment, but nonetheless, to try to give you a substantive answer as to what real economic activity would look like from our perspective. Is somebody buying a house or somebody borrowing money to open up a business. The the concept that the activity that is happening on chain is almost exclusively borrowing and trading to speculate on the prices of other assets as opposed to the creation of businesses that are actually creating value in serving customers would probably be the main distinction or bifurcation. So do you think that the reason that you can't buy a house on chain or whatever, you know, the other examples, do you think that's because of the underlying technology or, you know, I would have thought it's just because the blockchain really just hasn't reached its critical adoption inflection point, really, Right. How do you know that? And how do you know that in three years everyone will have a wallet on their, you know, phone and you'll be able to buy a house with FRAX, even though FRAX will have or Usdc, even though those guys won't have this technology to to support these other use cases that you mentioned. So first, once the tech is built, everyone will be able to use it. So there's nothing to say that fracture usdc also won't be able to use the tack that the Dow is currently built. Just as a caveat. But the the big point is that if you if you if you zoom in and try to think about what whether the problem is just lack of adoption of blockchain technology or it's not ready and just write it off as that, we would say that that's not a real answer. The blockchain is not ready for a variety of reasons, and you could argue that it's the scalability or the, the privacy or the, the, the cost to use the network for transactions, which are certainly issues. But that's, that's a that's only one half of the coin. The other half of the coin that is that even if we assume that all of those problems are fixed, we don't see realistically the blockchain still being used for economic activity. And so we're happy to talk about what might need to get built in order to get to that point. But just want to go back to the point we made earlier about how we we had a total misconception on this front when we started working on Bienstock, which is that everything else was ready for real economic activity, and the only thing that was missing was a competitive currency to perform that real economic activity in. And at this point it has become very clear to us that no matter how perfect we collectively try to make the Bienstock stability model itself, that it will also not. There's no amount of work on Beanstalk itself that can get us to a point where beams will be used on the blockchain for real economic activity. Unfortunately, improvements to beanstalk itself, we don't think can get us there because the rest of the tech stack simply isn't there yet and so there are then becomes an optimization question. Does it make sense to first exclusively work on improving stock to get it as good as it can be before changing focus and then seeing if no one else has built the tech that is necessary to facilitate it being to be used for real economic activity. Then to start to do that. We don't think that's the optimal way to do things. And I think it's not the optimal way to do things, particularly in the context of what else is going on. And if you if you look at what any of the other leading defi protocols are working on and you consider what they're working on in the context of the theoretical problems that need to be solved in order to facilitate real economic activity. There's basically no progress happening at all. And so I think if we assume work on Beanstalk for a year, get it to a place where it's basically perfect and then hopefully the rest of Defi will be right in step or in ten, getting to a place where it can be used in tandem with Beanstalk, I think that will be disastrous and prove to be totally wrong. And the point therefore is that it is really important to think about well, and this was one of the reasons why we wrote the blog post in early January, was to try to communicate a lot of the theoretical problems that need to be addressed by DEFCON and talked substantively about the fact that none of those problems are currently being solved by any of the other leading projects out there. And therefore it is important to on it is important to us as a DAO. It should be important to us as a Dao to go out and build that tech, because if not, whenever the next bull market comes around and there's a ton of speculative demand for beans in the system is going to be printing, it's unlikely to be able to turn any of that speculative demand into utility based demand, and that would be a big problem, not during the bull market when things are going great, but it'll be a big problem during the bear market, when now there's a dramatic downturn in demand for beans and from a from a if you look at the whole history of GameStop, there is some natural cyclicality to the way it works where. When the price is above its peg in its printing, there are some people that simply do not leave the system until the printing is stopped and then they leave the system and the price goes below its peg. And at some point at least so far, the price has bottomed out and then it returns to its peg and the system repeats itself. The real goal in the grand scheme of things would be to try to smooth out those oscillations as much as possible. There's a question as to time versus magnitude in terms of deviations from PEG, but the goal of being stock and therefore the goal of the Dow should really to smooth out those oscillations as much as possible and feel like very clearly the answer to how to smooth out those cycles is to create long term demand for being. And while there certainly is long term speculative demand for beans, I think that at the margin, long term utility base demand for beans is much, much better and healthier for the system and sustainable. So then the question really does become how do we get to a point where there is utility based demand for beans and that's that the I mean, these are the types of productive discussions that the Dow should really be engaging in rigorously, and these discussions should guide what is being funded in particular and how how it's being funded. But the the point that we want to make is that this discussion hasn't really been happening and we are happy to participate in the discussion, but really don't want to be required to lead the discussion constantly and feel like it's important that these types of questions that are very clearly top of mind for so many people that they are raising their voices and making it known that there is some lack of clarity or lack of alignment on what the questions are, what the answers to the questions are, etc.. But, you know, just speaking candidly, it does feel a little bit like at the moment it's on us as progress to come and talk to everyone about what the problems and solutions are and that that doesn't bode particularly well for the the decentralization or long term sustainability of beans stock that that the these discussions are really almost exclusively being led by us. So I want to give a huge shout out to Alba and for raising their voice and and participating in the discussion. And we would emphasize how important we feel it is for more people to do the same. Thanks for that. But just to push back just a smidge here, we when you have the perspective that you guys are the only ones talking about this, I see it a little bit differently. Right. I think the core issue that I'm just now starting to kind of get a glimpse of is that there's two definitions of utility. And up until today, I didn't really grasp that. Right. Because if we look at utility by the definition of what a normal defined user like myself would would define utility as, I would say, FRAX as utility, USDC has utility, all those current stablecoins they have utility. So by that definition, by that metric, just for clarity, what is that? What is that utility? Could you just define that? That's not relevant for this point? Let me I'll come back to that. But I just want to make the higher level point here. Right. I think people have been discussing or attempting to discuss how bienstock gains that kind of utility. So when we when people think that that's the goal to be like a FRAX or a DAI or Usdc, they'd say, Hey, those guys are where they are because things like partnerships and business development and basically people using them and protocols, accepting them and protocols using those things as their treasury. And the only way to do that is through like marketing and putting the word out and business development and blah, blah, blah, blah, blah. I mean, we've all seen how many people have asked for business dev and that kind of stuff. But what I'm seeing from from you guys is that you have a sort of different definition of utility that goes far beyond what FRAX is. And dies and USD CS are doing today. Right? So I think there's a gap there. I think there's a gap in understanding and and I know you just gave an explanation now, but even I'm still not quite clear that gap still exists for me, right? In terms of what goal you're, you're seeing that that being staff needs to reach that is different than these other ones and why those other ones will fail at reaching that goal and basically that vision is missing. Right? So the Dow doesn't see what you're seeing. So they're not talking about it. Right. So if you see something and if you're if you have the vision of of something that that only you can see, then I would argue that it's it's your job to kind of talk about it and make us all see that. I appreciate that very much. And to that to that point will try to more actively participate in the discussion. I just want to want to highlight that we are constantly trying to figure out how not to take over the discussion entirely and feel like it is really important that the Dow, the Dow facilitates a lot of discussion independent of us. But to your point that at the moment there seems to be a significant dissonance between our opinions or what we're thinking about and what the Dow is focused on. But that is a major sign that we in fact, do need to change, changed what or how we are communicating to some extent and don't you know, we don't say that lightly, so I appreciate the feedback very much. What is the utility that you think FRAX and Usdc have at the moment other than speculating? Well, you know, I thought I knew what the definition of these things were. Apparently I don't. But like I said, it's it's basically what everybody else uses it for. I don't have a good definition, but but which is what? What is it being used for? Well, one example just because it's fresh for me, Temple uses FRAX as their treasury, meaning that if you want to buy temple tokens, you have to buy FRAX too, because that's the only way you can buy temple tokens. That's one example, right? You USD DC. I mean it's one of the most ubiquitous coins out there. It's got a market cap for a reason, right? When you say speculation, as as I forget how you define it, something to do with like leveraging and something related to leverage is betting or betting on the price action of something just like trading on the price of other cryptocurrencies or other assets like using it as a medium of exchange. Right. I'm willing to buy convex because I'm going to speculate on COMEX, but I'm not speculating on you see, I'm just using use DC as a medium of of exchange between two other things. Sure. But this is this is actually a great distinction we're getting demand in that case is to speculate on something else, which isn't necessarily a bad thing. But we would argue that all of those use cases beans can generally also fail. Now, the problem currently is that most of DEFI doesn't support 1150 fives. So the economics of the incentive, it's a beanstalk can't actually map to a lot of those other use cases. So from that perspective in the short term, this is why it makes sense to have a beanstalk native decks and a beanstalk native lending protocol such that even these speculative or ultimately speculative use cases for beans can actually happen. Whereas during the last bull market you couldn't really use beans other than within the system itself. So there isn't there is a there is some short term optimization happening here in terms of at least getting to a point where the speculative base demand or speculative base utility for other stablecoins can also be experienced by beans. And that's that's all well and good. But really do want to emphasize that in the grand scheme of things, demand to speculate is highly cyclical. I guess you could make an argument that as its demand for real economic activity, because real economic activity is somewhat cyclical but think that they're cyclical by dramatically different orders of magnitude. So the concept is that if the entire demand for beans is to speculate on on other stuff during a bull market, that that's all well and good. But during a bear market, it's during a bear market, it's not going to be so good for the protocol. So the concept is that in the short term there can be optimization around speculative utility for beans, but we really do need to have support for deposits at that point. And that's a lot of the work that is being done at the moment in terms of the decks and the loan factory, etc.. Hey, I have a quick question. Panelist Uh, you mentioned that the the interest rate on of a is lower for Stablecoins is lower than the federal funds funds rate right now. And so I was just confused was that point to sort of indicate that there's less demand to sort of borrow stablecoins for speculative utility, speculative based utility and like this, you know, sort of macroeconomic condition and the inverse also being true, you know, in a bull market that there's a lot of demand to borrow stablecoins for speculative base activity because it's the interest rate is so much higher to borrow the stablecoins than the the federal funds rate is. Is that right? And I understand that correctly, or am I missing something there generally? Yes. The concept is that the fact that the interest rates on STABLECOINS at the moment is lower than the interest rates on the on is lower than the federal funds rate. And when you think about the federal funds rate, it's like the risk free rate of return on dollars. The concept is that the fact that you can borrow dollars on chain more cheaply than the federal funds rate, in theory, you'd expect that as proven as was saying, there's some arbitrage there where you can borrow funds at 3% and then lend them out at the risk free rate for four and a half percent. And quite the spread there. But the fact that that isn't happening is indicative of the fact that the the the two economies are basically entirely separated and that there is no real economic activity happening on chain through which that arbitrage can actually take place. Yeah, that's super interesting. Thanks. But also, I think just thinking out loud, Albion's feedback is perhaps indicative that our our the way that we talk about things for the more time can often lead to it seeming like there is no focus on the short term. But just want to emphasize that all of the there's just a constant balance between building short term solutions and building solutions that should be sustainable or viable in the long term. And at the moment, the like. Just to give an example of the trade offs order for the beanstalk native interest rate to really be able to be used in Defi even for speculation, you have to be able to use deposits in lending protocols and index protocols and for better or worse, definitely runs on the ERC 20 standard at the moment and there isn't support for 1155 or not much else really. And I mean there is some support for 721 but the concept is that even if deposits were implemented according to the 1155 standard, it really wouldn't help with adoption because the rest of the defi stack doesn't really support them. And then the question becomes how best to add support for deposit funding. So on the one hand, there have been there's an argument to be made to to, to just for your curve and try to make it such that it can be used for deposits in some capacity and fee for existing tech, make slight tweaks and hope it's good enough for the short term. But on the other hand, again, given the longer for the zoomed out perspective that we are coming at this from, with the goal of ultimately trying to facilitate real economic activity, we believe that there is larger work that needs to be done at the DEX layer and at the lending layer, such that the question then becomes does it make sense to do exclusively the short term focused work or does it make sense to try to thread the needle and start working on the bigger projects, like a fully functioning dex that can compete with sci fi but at the same time start to offer utility to bienstock or value to Bienstock over the short to medium term, let's call it. And so if we if we take wells as an example, the the base implementation of wells is ultimately going to be a constant product being used for that certainly could have been done with some minor modifications to Uniswap. But the point is that the work that has been done thus far on wells really should provide the basis for a variety of different, really cool stuff over the next couple of years. And so the question really and it's the question that has to be answered in the macro context that cannot be answered in the in the micro context, because there will always be something in the short term that has to get done. The question is, are we building stuff that is aligned with the long term goal to facilitate real economic activity, or are we just playing whack a mole and trying to solve the problem of the day with the the simplest way, that way the way to solve the problem? And there are tradeoffs. Wells has taken a lot longer than I think any of us thought it was going to take. But it's also becoming a really important piece of technology that we think over the next couple of months should be upgraded to a point where it becomes a core piece of defi infrastructure. So does that help? Bienstock Maybe not explicitly, but it certainly does implicitly if you consider that at the moment beans really can't even be used for speculative purposes in Defi and you consider that there's no real economic activity happening. So it's really all about this, the lens or the zoom at which we are considering problems and the trade offs we're collectively willing to make around fixing, fixing problems. In the short term, beans is at 90%. Should we all turn our attention to repairing the system, developing a gauge system, changing the incentives around the seeds for BTB? Or is $0.94 okay enough for us to continue working on all the other stuff? And there's there's an element of real, real time optimization here, which is to say that what may make sense today may not make sense tomorrow. But I think to Albion's point, there is generally a lack of consensus on what makes sense, and there may even be a lack of consensus on what we're talking about, what we're actually discussing. So I feel like these conversations are incredibly valuable. Okay. I see there are a few maybe discussions of such discussions and the pioneer chap, one of them may be what Backus said or has been mentioned with others where they said that just holding, you know, stables I guess on chain is some form of utility. That may be the case, just given that not everyone holds you as this is able to exchange it. You know, so really it's not it's not everyone has the you know, it's not easy for them to keep on switching on and off chain. So even though there is an opportunity, of course, and we have highlighted that there is an opportunity because people still hold, you know, stables on chain much I think was had a few questions on the on the ability to arbitrage between you know borrowing cheaper on channel than depositing it somewhere off chain and in theory well you know that may be true again that there may be some difficulties to do it in practice such that that most and all of these rates are variable. So it's not like you can you know, when you when you when you arbitrage you even want to audit given that you're still able to do that. And by that I mean you borrow use at end and switch it and go there. There is still some sort of speculation here. Plus you don't know what would happen with the would be with the rates as they change so that I'll pause here and see if others have anything else that they want to want to join on or add to the discussion. Otherwise, I think we we may be moving to the development call. Does that kind of guide mental search now or does due to start whenever it makes sense to? Okay. Will pause the discussion. Yeah. Will pause here a bit and see if we you know, we want to continue this discussion. Otherwise, when a all of us go to the development club with that, I think we can conclude the meeting. As a reminder, we're discussing many things. I think one of the main things that we are active with discussing is governance. We had a call yesterday. I think the recording will be up or is already up on on anchor. Otherwise it is a discussion that was still going and I'm having to and we will have more meetings too to continue. You know what we think can be improved and governance otherwise the there is a bit the slides and that's the budget proposal. There's seven more days left or six more days actually. So it's end on February 8th. So I would encourage everyone who hasn't voted to vote and also have voted to, you know, talk to other farmers that other farmers encourage them as well to participate and actively. But otherwise, we will end this call here. Thank you all for joining us. And we'll be moving to the to the development court. I think the development code will have it at the barn of barn here or at the barnyard guy, correct? Yeah. We'll stick around here. All right. Okay. I'll I'll end it here. And then I guess I had a chat. Maybe you can you can lead the development code or anyone else. Thank you, guys. Thanks.