Mission DeFi Podcast #2

February 28, 2022


Other Recording



we try to be honest about both our ambitions and the difficult road ahead right the cross chain architecture we were describing is complex so a trillion dollar beanstalk is it you know it's a there's a complex road ahead but at the same time i think you're what you're getting at is exactly why beanstalk farms and beanstalk has had such a high level of success at attracting a plus people and that is it's not just that people want to be a part of something where they're going to make money the big vision is certainly alluring to people and it's alluding to people with big visions of their own and that's part of what's going to make developing beanstalk in a decentralized way possible right and so this is all it's an experiment in terms of the protofoss experiment developing the protophone a truly decentralized way is an experiment this is all a big experiment but at the same time the outcome with which we're all working towards of this experiment is is a very ambitious one [Music] [Applause] [Music] welcome to mission d5 with brad nichol where we explore projects in decentralized finance that are innovating and driving our mission a financial freedom forward thank you for listening if you like what you hear please subscribe rate and review mission d5 and spread the word by posting a tweet to the show all opinions expressed by brad nicolaur's guests are their opinions and do not reflect the opinions of black knox material indicators or any other affiliated organizations you should not treat any opinion expressed by brad nichol or his guests as an inducement to make a particular investment follow a particular strategy or become involved with any project a project being featured on the show is not an endorsement of that project in any way this podcast is for informational purposes only now here's mission defy with brad nickle [Music] i am excited today to welcome back for a second show publius from beanstalk beanstalk is a stablecoin protocol with a really cool tokenomics model that at the time of our first interview you guys were going through a big test on holding the peg because you had just kind of launched and you had some large-scale dumping that occurred and you were really excited about how well the protocol was doing and that a lot that you had designed into this thing was working bublis could you introduce yourself tell us a little bit of your background and if you want to tell us about the team and then let's get into a little bit of an overview of what uh beanstalk is and how it functions awesome thank you for having us so publius is a pseudonym it refers to the founding group of people that were working on beanstalk but you know now beanstalk farms which is a decentralized development organization working to develop beanstalk has over a dozen full-time members some two dozen plus part-time members that are all contributing in various capacities across the stack to develop bean stocks so uh wow has grown immensely since the last time totally dramatic and i mean the most notable thing on that front just the quality of the people like last week we hired a community organizer who's been a long-time member of the community and it's you know this is an example of a position that as things are growing so fast we need people who are competent and understand being stuck and they're currently part-time because they're finishing their phd dissertation and they'll be starting full-time in june once they finish their phd so when we thought of not just the numbers it's it's an amazing group of people that are all thoughtfully curious and working to make beanstalk really an incredible part of the d5 ecosystem one of my favorite things about defy is how often you hear about people that were excited or enthusiastic about a project end up working for the project on a full-time basis and turning it into a profession and that to me is one of the coolest things about it that this meritocracy is happening in projects like yours all over defy and that to me is a really cool thing and to have it all happen via on-chain and off-chain governance but all in a way that's open and through the community endow approval is it's been a little bit of a process to get it up and running but at this point we're we're kind of chugging and it's it's just an amazing thing to be a part of i'm really glad to hear that uh you guys are having that kind of success in recruiting not an easy thing so it's indicative of the quality of the project and the original team and then you know building from within the community that's fantastic to hear give us an overview i don't know if you want to call it an elevator pitch it can go longer than that that's for sure but give us an overview of what beanstalk is what you really see is its purpose and mission and how it functions and how it's able to do what it does as a protocol beanstalk is is an issuer of money for you like it's the the core principle of beanstalk is that it creates financial incentives that coordinate misaligned participants and independent participants in a financial ecosystem but coordinates them because the protocol creates certain incentives that create the behavior that solve tragedy of the commons problems and specifically it does it in a way that is designed to increase decentralization and decreased concentration of ownership over time and in doing so is really designed to distribute the growth in the senior interest distribute the growth in the supply of beans via senior edge to the participants in the ecosystem and so the main differentiator and we can get into how beanstalk actually works between beanstalk and any traditional collateralized stablecoin model or something like terra luna which has had immense success recently is that the specific senior edge model is designed to reward holders of the stable point itself so previously we talked about how collateralized stable point models all come with high borrowing costs or implicit negative carry because of the shortage of supply and in practice what beanstalk does via the silo which is like a bank account or anyone who holds beans or holds uh lp tokens for specific pools that beans trade in can deposit those tokens in the bank in the silo and participate in in future growth of the bean supply and in doing so beans as opposed to every other stable coin which is negative carry and has high borrowing costs beans are positive care and the yield in a protocol needed way that you cannot so to answer a question well how does beanstalk actually do this beanstalk has two different parts of the system it has the field which is the decentralized credit facility and the silo which we were just talking about which is like a decentralized bank account which offers passive interest so beanstalk as opposed to every other the vast majority of other stablecoins to date are all collateralized in some capacity bean stock uses credit its ability to attract lenders to create price stability and so the field the decentralized credit facility is a core component to how beanstalk works and anytime the price of a bean is below its padding of a dollar beanstalk basically attempts to borrow beans from the market in order to reduce the supply and return the price to its point and the last time we spoke it was in the midst of a major debt cycle where beanstalk had to attract a lot of loans in order to remove sufficient beans from the supply to return the price to a dollar but ultimately beanstalk has been able to regularly return the price of a bean to a dollar by issuing sufficient amounts of debt now uh debt in beanstalk and this is unique to beanstalk at least to date is paid out on a first in first out basis and so when you lend beans to beanstalk you receive pods which are the dead asset of beanstalk and the number of everything is farming feet so the number of pods that you receive when you lend beans to beanstalk is based on the weather at the time that you lend beans to beanstalk and because of the first in first out redemption schedule or harvest schedule as we call it in beanstalk if you lend beans to beanstalk right now you go to the back of the line and therefore from an economic incentive perspective if at any given time i feel like the weather and the price uh and the debt level are such that it's attractive for me to lend beans to beanstalk because of the first in first out harvest schedule the incentive is to lend beans to be in stock immediately and therefore from a structural perspective beanstalk can create a more efficient market for debt than uh previous attempts on a debt or you know credit based stablecoin model have have uh succeeded and created so that's the decentralized credit facility and then the silo just to summarize because we said a little bit of it before it's effectively a passive bank account where you can deposit a variety of white listed assets which currently is comprised of beans lp tokens for the bean et una swab v2 pool and lp tokens for the bm3 curve first pool you can deposit any of those assets into the silo in exchange for stock which is the governance token of beanstalk and seeds which yield you more stock over time and stock is what also entitles you to senior it so in addition to participation in governance it's what entitles you to passive interest so you can either lend beans to being stuck in the field or you can deposit beans into the silo but in both cases you're participating in the future growth of beanstalk in various different ways and the different risk profiles and liquidity profiles between the different assets in the silo and the opportunity to land beats in the field helps create a diverse ecosystem which thus far has succeeded in its goal at regularly oscillating the beam price over its bag that's awesome let's do this i think that conceptually the the moving parts of this system sound complex to people at first blush because there are so many pieces here but that's actually what you were just talking about as its advantage because there is this diversity of participation that people can go through in order to earn from the protocol and or borrow from the protocol and earn would you mind walking through maybe potentially at a high level the steps that a user goes through in each of the kind of use cases of participation i think it would be really valuable for people to hear and understand ultimately the website is changing constantly the ui team is pushing updates pretty regularly and so at the risk of the steps being somewhat outdated soon i think maybe the the better way to we can go step by step but there's a lot of complexity here so if anything the the better thing would be to direct you to the how-to guide which could be found on the about page of the website okay you need to gain pretty well and has step-by-step instructions on anything anyone could want to do but i do think your point that walking through kind of the different in practice what it actually feels like to participate in the field for the silo what that actually might be so let's let's take an example of someone who's on ethereum it has e or has usdc or has another currency that trades on uniswap or curve and they're interested in getting exposure to being stuck let's say that the price is below a dollar and beanstalk is looking to borrow beats and the weather right now for reference is almost 65 hundred percent so for every gain that you lend to beanstalk you receive 66 because you're super 65 plus your money back so 66 pockets and let's say that you have two or three aetherium you know this is a theoretical farmer and they want to participate in the field what you can do is on you know the website has a section called the field but what what's in practice happening is you can go from basically any arbitrary asset either through the website or you know via the smart contract you can trade your theory into beans which is the the thing that beanstalk is actually looking to borrow and in doing so when someone purchases the ethereum that's raising that's raising the price of a bean because purchasing a bean raises the price of a bean and then when they lend the bean to beanstalk and through the website you can do it in one step but you can also do multiple steps buying it separately and then lending the piece when you lend the beans to beanstalk beanstalk burns the beans so if we look in practice let's say that beanstalk was trying to remove ten thousand beans from the system and someone now comes and uses three of the original so right now the price is like 2500 so that's 7 500 beans they'll buy on the market they buy the 7 500 beans they lend the beans to beanstalk the beanstalk gives them 66 pods for every bean that they like to be in stock and those pods go to the back of the potline which is currently like million pounds long deep stock has a a lot of debt currently outstanding it's kind of it's been immensely successful at attracting uh a lot of loans over the past couple of months practice what you're doing is you're removing seventy five hundred of the ten thousand beans bean stuff wanted to remove from the supply and in exchange you're now receiving debt which is somewhat illiquid now last time we spoke pods were totally illiquid however about a month ago beanstalk farms proposed a bip which was approved to deploy the farmers market which is a decentralized exchange for pods and it's native to beanstalk and so now there's actually there's a market tab on the website where you can see it with a whole uh a series of orders to buy pods and listings to sell pods and it's you know there's a chart there and everything so there's actually a way to buy all across the podline instead of getting in the back of the pod land by lending to pied stock as well which is pretty neat that was actually developed almost entirely by the community but probably has had almost nothing to do with that and so when we talk about just really cool stuff happening all across beanstalk like that's that's stuff that really gets us excited you know yeah that's awesome it produces a solution for users that want to advance up that think that there's an opportunity in the market with the pods that are available people that want to liquidate that can do that and it's even cooler than that some of the people working on business development for beanstalk farms are talking to fiat down which is a protocol for loans against the zero coupon bonds which bonds are affect some sort of zero coupon bond another unique because they don't have an expiry they're instead first in first down but the idea is that in the near future or the not too distant future you'll be able to actually borrow against your pods which is also super oh wow wow so you're lending you receive the pods and then you can borrow cash out from the pods so you really don't even have to give up the pods at that point but you can have cash flow from the pods that you owe correct wow okay pose-ability is just the coolest i love that part of the model that's really unique what other use cases are there for the other sides of the equation that was the field so if we shift our attention a little bit to the silo so just to summarize the field low liquidity even though now you can trade your pause on a day but high return currently like a 65 x for every being you went to beanstalk by high risk low liquidity high return that's the profile of the field more or less now the silo is much more liquid and offers a passive return for depositors so let's say instead even though beanstalk wants to attract 10 000 beans of loans instead of lending beans to beanstalk the person with the ethereum wants or liquidity they don't want to commit they want to test it out tests being stuck out and so instead they want exposure to beanstalk's growth through the scila which is again like a passive deposit account it's a relent a bank account and currently you can deposit three different assets into the silo you can deposit beatens you can deposit lp tokens for the being eath eunice swap pool or help p tokens for the beam recurve curve pool and so you can either do this through the website the curve pool isn't entirely integrated into the website yet so some of that you have to do via the curve website but in the case of the uniswap pool or just to possibly feeds in the web in beanstalk you can do that in a single transaction from ethereum via the website and the way that it works is you're effectively kicking your ethereum and in the case of deposited beans you would be buying the beans with ethereum and then depositing the beefs in the silo in exchange for your stock which is the government's tan entitles you to seniority and seeds which entitle you to more stock over time or in the case of depositing unit swap lp tokens which are part b and subtorn ethereum you'd be technically taking your ethereum selling half of it into beans depositing that into the liquidity pool receiving the lp tokens from the liquidity pool and then depositing those liquidity pool tokens in the silo but that can happen all in a single transaction would be in stock on the website which is seriously so you don't have to go back and forth between the swap site and everything else and the lp interface it all happens right there in the interface of the site yeah it's designed you know g5 is complex and not user friendly because the website tries to make things as user friendly as possible now randy we don't think we do the best job of that and beanstalk francis recently had a design team with the component of it really start to step up and re-think how a lot of the silo interface should work to make it a lot more clear on the different actions and the different returns and things like that so we could do a better job of that but that will all happen in your time oh yeah look i mean it's a evolutionary process and when you're creating something like this it's incredibly difficult to understand where um the friction is going to occur for a user and also what what things that you can actually figure out to automate right you come up you start and you launch with all these functional components of an app that you know have to be there in order for people to execute the the protocol the way you envisioned it but you don't know at the beginning all of the things that you can automate and you don't necessarily want to do all of that until you see how users actually interact with it so i i understand completely that it's it's one of those things where you have to constantly evolve and change and i'm sure people in the community are giving you ideas and feedback as well to that point there have been 13 beanstalk improvement proposals proposed to date and 12 of them have passed and so to keep the website and the how-to guide and the about and the white paper all up-to-date and current is a massive undertaking and for the most part beef dot phones has done a good job of that but you know can always do a better job yeah well look i mean it's a never-ending process never-ending and you'll think you have a brilliant idea for making an interface better you'll implement it and nobody will use it so i mean it's it it's just it's one of those ongoing things yeah that's great all right so that's exciting sounds like you guys are out doing or or members of the team or the community are out doing business business development partnering how how's that process been for you guys is that something that members of the team had experience with or is that something you're kind of figuring out as you go so on the one hand the there's a difficult question around what is business development in a decentralized capacity especially on behalf of a protocol right there like bean stuff is an autonomous protocol with an on-chain gap beyond that like it doesn't exist you know like that's the capacity in which it exists so beanstalk farms is this decentralized development organization funded by the beanstalk dow which exists of people that have you know physical persons and so those those people have now been trying to figure out well what's what are the right integrations and the right ways to develop beanstalk via bips and to complement those bips with integrations with other protocols to to have beanstalk become an integral part of d5 and so an example i mean there's you know the fiat down zero coupon bond lending is an example of something that biz dev has been working on and we would it was almost comment that the best ideas have all come from our community but that was not a connection to fiance from our community beyond that we talk about collateralization and proposability stock which is the governance token is going to become liquid in the not too distant future and beyond that deposits so when you deposit an asset in the silo the deposit itself will also become fungible or semi-fungible 1155 token and therefore you're going to be able to and we're talking to swap dow to have the deposit slips effectively be able to be used as collateral as well so you're going to have a variety of different yield bearing assets within beanstalk that can all be leveraged in effect into other protocols that's fantastic is beanstalk as an autonomous protocol is it already kind of in a permissionless composable format that other projects could be utilizing components of the system today or is is that something that's still a part of the process so the short answer is yes the first there's two there's two ways to think about this one is the silo which is the deposit account is being generalized in the most general sense so you'll be able to have in the near future other yield bearing assets in the silo where you're earning yield from other protocols and being stuck at the same time but already step one in that process occurred maybe a week or so ago with the passage of bib 12 which allowed for the b and three curve lpgs to be added to the silo and now any other token could be added to the silo easily based on a white list and so another bib to incorporate the accounting for other rewards from other protocols that's in the works but the idea is that other protocols are going to be able to very strongly leverage being stock in the not too distant future you can already start to do that another way to answer that is beanstalk was cited for the first time in another product plus white paper something called afrofunniness which is what they're effectively going to be a peg maintenance protocol that other people can invest in and they do peg maintenance for various stable points they are independent from beanstalk but working on creating a decentralized 3 pool on curve with usdv frax and bean and they're going to be doing bean peg maintenance as part of their protocol model and stuff like that is really cool when it comes to like in actually other protocols starting to integrate with beanstalk and use the beanstalk model as part of their own models first of all it's just cool that that's happening obviously and that's what you want to see in d5 is the fact that these protocols are all being utilized but i also think it's an awesome validation when other projects are saying hey we really like what's happening here we want to participate and create something around it it says that people think that what you've done and built is smart and strong and that it has value and they're willing to put some skin in the game and make use of what you guys have created yeah it's encouraging that there's a variety of different protocols that are looking at being stopping the assets within beanstalk and how they can then use them within their protocols so swapped out fiat dao afrofinance like the the the list goes on but those that's exactly the type of start of product market fit which is really cool and exciting so that's it that's a little bit of what business development has been working on in conjunction with the development team obviously sure sure is there a plan are you all going to stay primarily on ethereum mainnet are you also looking at other chains and layers so that's such a complex question because ultimately the goal once you have beanstalk as a credit based stablecoin issuer where people have a high level of desire for beanstalk debt and people have faith in the credit of being stuff you really want to try to leverage that credit history across a variety of different blockchains meaning if you launch a totally new beanstalk fork on avax but it it's unrelated to beanstalk it doesn't actually have any of that credit history you don't transfer that value that experience right there's a strong argument to be made that that's the case right right and the you could argue otherwise but the the point is in practice the the goal is certainly for beanstalk to issue assets on a variety of different chains and allow people to lend beans to beanstalk on a variety of different chains and deposit assets in the silo on a variety of different chains but doing that in a way that doesn't compromise the security and decentralization of beanstalk as a whole is very difficult and technically challenge and so if the goal is for beanstalk to be a major issuer of money on the magnitude of hundreds of billions and trillions of dollars ultimately the bridges that exist are very far from being able to support the type of crosstrain functionality that beanstalk requires and so something like a layer two integration is perhaps easier to do and it may be a little bit more in the short term horizon like the next you know three to six months let's call it but in the meantime the vast majority of focus is on development on ethereum mainnet and the we were just comment that the development on the theory it's happening in conjunction with an immense amount of research and thought on a multi-chain architecture but the multi-chain architecture has to happen in a way that leverages the credit history of beanstalk it doesn't compromise yeah that makes complete sense and and synchronizing that if you're going to maintain the same credit history and if the peg is going to maintain simultaneously across all of those chains i can definitely see how that would be an incredibly complex problem to solve but the beauty of it is once you solve it that's a powerful competitive mode the funny thing is the economics of it are pretty much worked out and as long as you have fungibility across the different chains that you're on where people can arbitrage the price of stock uh based on the expected rewards between different pools and arbitrage the price of beans across different chains the protocol itself doesn't need to handle almost any of that and that's how it can leverage the credit history of beanstalk in a very elegant fashion the problem is ultimately on the bridge of exchanging beans on one chain or stock on one chain for beans or stock on another chain and beyond that how to coordinate loans within the field which are first in first out and how to make sure that the loans and harvests of the redemptions of beans are done in a way that isn't compromised meaning if the bridge that is being used says one chain harvesting a billion beans but that's fake if other chains then say okay well any pods that are you know in front of that front in front of a billion beans and you know they'll harvest that would crash the system right so the technical problem is actually in the security of the messenger when it comes to which beans and stock to burn and mint and more than that which pods can harvest so if anything the goal when designing the cross chain implementation for beanstalk is to make the needs of the bridge as simple as possible meaning just limited to beans stock and the sewing timer potentially and then instead leveraging the the fact that we could deploy a beanstalk contract on each of these chains and have the vast majority of the computation just happen on those chains naturally you know and then then you leverage the composability of each of those trades individually within this larger system that's kind of the overall overarching vision but again to implement that in a way that's technically secure is is non-trivial so it's a very fair problem to think about it to work on and we're we're very grateful to be at a place where this is something that we're spending time thinking about and working on but at the same time it's you know it's not gonna happen today or tomorrow yeah no absolutely i'm trying to think of the name of the bridge on solana that just got exploited similar to what you were just talking yeah or in a similar fashion but you know essentially the the exploiter was was tricking that system into thinking it had more than it had and was able to then on the other side of the bridge take out the ethereum i get a sense that you guys have a big what do they call it a big hairy goal a big vision and that you're very mission based can you talk a little bit about kind of how you guys philosophically are approaching what you're building and why you're building it sure so at the risk of sounding like we're on uh on eight horse which were we don't we're we don't believe we are um if you look at the the creation of something like bitcoin or ethereum and the technology that it they enabled ultimately the goal of that technology is to have open access where anyone in a permissionless way can participate in in the world and from a from a realist perspective you need to be able to participate in in a financial sense in the world and that's really what this technology enables or is the foundation of a whole system with which anyone can participate in and that's been one of one of the things that is missing in order to continue the proliferation of this technology or enable it to proliferate faster and faster is a shortage of stable ones where there's simply not enough collateral to create the trillions of stable points that there is ultimately either currently uh or in the very near future will be demand for and the shortage of supply has resulted in i borrowing costs where most things in d5 aren't cost effective to do because of those high borrowing costs and beyond just the high borrowing costs if you look at the different models through which stable points exist almost none of them are designed to reward the holders of the stable one there's not a lot of product market fit in that capacity and the question becomes from a token economics perspective and that word gets thrown out there a lot and oftentimes is totally but when it comes to designing a token how can you create product market fit for a stable point by a untethering it from collateral requirements and b offering some sort of positive yield on that stable coin in a way that rewards people not disproportionately so if you look at like a traditional seniority model like something like basis for example the holders of the senior ridge token they received the vast majority of upside in the system luna is another terra luna is another example where the holders of luna receive almost all of the upside in the system whereas the terra holders there there's no protocol native way to earn yield from that stable point and so they've created the anchor protocol which in practice does offer some competitive yields for terror holders but this is the key thing those yields are subsidized by the luna holders right and so in practice you have the senior age the seniors being disproportionately rewarded to speculators and then those speculators are all kind of making a small payout as a fraction it's a small fraction of the amount that they're actually making to the stable coin holders to create some facade of utility but in reality there's not actually any product market fit there because the stable point can't be used in a positive carry sense it's just it's just there and so even though eena has done a really cool thing by untethering uh it from the collaborative shortage because luna can float in in value and therefore the amount of collateral that exists to back up era is uncapped and that's an innovation and really cool at the same time the traditional seniority models that have existed in crypto are really not designed to increase decentralization over time or to create utility or product market fit and so when you ask like where from a principal's perspective is this beanstalk designed from the goal in creating the silo one of the questions everyone asked early is you have the the credit facility to create stability but why have the science why have the silo the silo is the utility the goal of generalizing the silo in the coming weeks and months is to allow a variety of unique interesting financial transactions that are sophisticated and customizable to all happen within the silo where you're earning both protocol native interest from beanstalk and potentially from other protocols at the same time and the idea is that all of the sceneries that beanstalk mids half of it goes to paying off debtors depending off pod in the field but the other half is seniors that immediately gets paid out into the silo and that's how you own compound interest via beanstalk and so the idea is that beanstalk is constantly going to be creating new beans that are looking for other protocols that are integrated with the silo to juice their yield and that's where product market fit comes from and so you're no longer going to have just protocols that are lending protocols for example because that that's the solution to the negative carry supply shortage issue but it in a in a world where you have a passive protocol native interest rate that can then be juiced with other protocols there's there's a variety of other unique use cases that potentially open up and so that's that's the way beanstalk has been designed and it's very exciting to be at a place where we're actually talking with other protocols to facilitate a variety of these different integrations to make this a reality that's fantastic and so in in terms of what and i think it's brilliant but in terms of what that means philosophically i'm i'm assuming here that that all means that you really envision beanstalk as a massive massive you know trillion dollar participant in the financial markets someday that's the goal awesome uh you know it's funny you you said something about people necessary might potentially take that the wrong way but i i actually think that i think humans are are more inclined to want to support projects that have a big vision and are driving to something much bigger it it takes the whole it extracts away the whole idea of yes i want to make money or yes i want to participate and makes it i'm now a part of something that could be much more significant for for humans in general and for defy at least so i i actually think it's a it's a positive for most people well and we try to be honest about both our ambitions and the difficult road ahead right the crosstrain architecture we were describing is complex so a trillion dollar beanstalk is it you know it's a there's a complex road ahead but at the same time i think you're what you're hint what you're getting at is is exactly why beanstalk farms and beanstalk has had such a high level of success at attracting 80 plus people and that is it's not just that people want to be a part of something where they're going to make money they the big vision is certainly alluring to people and it's alluding to people with big visions of their own and that's part of what's going to make developing beanstalk in in a decentralized way possible right and so this is all it's an experiment in terms of the protofalse experiment developing the protophonic truly decentralized ways of experiment this is all a big experiment but at the same time the the outcome with which we're all working towards of this experiment is is a very ambitious one yeah that's that's fantastic again i think it's an absolute plus and a positive i assume ui you and i will have similar viewpoints on this but i mean your goal i would assume that part of the goal is that beanstalk and beans replace things like usdc i i see usdc usdt centralized coins like that as especially ones with you know blacklist capabilities as a as an extreme danger to the entire d5 ecosystem do you do you kind of share a similar viewpoint on that well i certainly show the viewpoint that they're danger i don't i don't think replace is the right word okay beanstalk ultimately is able to derive its egg for a dollar through other centralized collateralized statement points like usdc and teb and it does so by comparing in the case of usdc the being easy unit swap ratio with the usdc ratio and can therefore derive the price of a b relative to usdc and you beanstalk leverages the fact that there are centralized collateralized stable ones that offer convertibility to to derive a price for a dollar on cheating and furthermore if we think about where traditional finances is headed i don't think that usdc is going to disappear but the use cases with which it is used for are likely going to change dramatically and the current reliance of d5 on centralized stable points that is ultimately going to change and so where we believe beings fit into that is being again because of that product market fit created by the silo being a really interesting opportunity for people that are currently holding stable points and doing some version of guild farming but are looking for something that is not if not either zero sum or negative sum right right no it makes complete sense my my my concerns about it are the dependency that so many protocols have relative to usdc that that regulatory action could actually significantly impact the entire ecosystem but i i think that approach makes sense that that thought about it makes sense the key question is whether a protocol can get if they're if if a contract is blacklisted exactly in stock is specifically designed stuff that that is uh if not impossible but nearly impossible and in the case that it would happen being stock could very quickly pivot and so that's ultimately what the beam stock is immune in the case of the unisof practice unless circle blacklisted the usdc unisrab v2 pool which is like at that point they're just you know setting fire to their whole business exactly so so if that's the ball game you know beanstalk will handle it but the idea is like those are the those are the scenarios with which it's like okay they're just building full full kamikaze here that that would probably be the only case where i think some protocols that are even decentralized like beanstalk have a little bit of in your gut but you're totally right that in the case of just a like simple blacklisting there are lots of proto you know not necessarily the usdc pool but which is core to their their business model but just blacklisting other smart contracts yeah there are lots of contracts that are much more vulnerable to that type of attack and i think the question around the question around the ecosystem shifting to more decentralized alternatives as well what ultimately what ultimately is the structure from a security and an economics perspective of those alternatives and luna and terror are interesting but they're issued on their own blockchain right and so you'd certainly lose some of that composability that's native to ethereum if you're issuing assets natively on aetherium so there's there's give and take from a technical perspective and an economic perspective even within protocols that have worked around the collateral issue makes sense when did you guys start remind me when you started building this thanksgiving of 2020. wow okay so you've put in some serious amounts of work into this and the launch was when the protocol was deployed on the ethereum maintenance on august 6 2021 so a little under seven months ago that's so that stability is pretty amazing in that time frame what what things about doing this and it could be anything it can be uh development community were there things that surprised you because they were more difficult they went really well i mean what in terms of your expectations were there things that you had to take a reset on because you didn't quite expect them as you approached building and then launching this thing well on the one and beyond the protocol has benefited tremendously from a variety of different bean stocking proofing proposals that have been made since its inception and so the idea that everything has been foreseen you know that's an impossible thing to convey at the same time i think the general functioning of the protocol has been within the range of expectation and certainly in real time with the current bips that are live things have behaved more or less but reasonably according to our shorter term expectations and and the long term things are working pretty well with you know that's just on the protocol side of things with that said i think there are a couple things that are particularly surprising one is that the the protocol itself has been resilient to issues that if you know lasted for an extended period of time would have killed it because of the flexibility of the governance things have been able to for example pick 9 radically changed the amount of soil that was available and since then the pod rate the debt level is basically flattened which from a macro perspective is a really key metric to the long-term success of the protocol and so there are certain things like that where it's like it's just surprising to me that the protocol was able to be so wrought right to have so many things in it that needed to be fixed and are still or it's still working that's amazing yeah that is cool the the the other thing that we've already mentioned this but it's really on a daily basis eye opening is the quality of people that want to work on beans up and are working on beast and that to be surrounded especially you know you start something anonymously you can't even tell your friends like that's that's a pretty lonely place to start yeah and to now be just just one part of a community that loves this thing just as much as we do like bad that's just such an incredible part of the human experience we've been lucky to be a part of and did not see coming you know that was not on the list of the computer scientists expectations when starting a protocol was like oh my god we're going to make all these friends who still don't know who we are or you know it's like i don't care totally yeah that's i that's i you have to ask me on whether they don't care i'm sure they all like to throw his bus in their balls about that uh it was actually the first beanstalk meetup held at e denver last week which is super cool and a couple of them were joking that anyone that was there that like didn't know beanstalker was pretending to not understand being stuck they thought it was prudence [Laughter] just little stuff like that but you guys were there in dark hoodies and dark shades taken out in the corner is it what they were thinking yeah it's it gets back to the idea so all you know that's where it's like we're just enjoying we're really enjoying the community and the fact that other people are starting to not just see the vision but say like i'm gonna quit my real job or i'm gonna drop out of my phd program or i'm gonna you know at least start part-time and all those things are happening regularly and just go all in on green stuff and that's i mean what do what an incredible thing to be a part of yeah that's amazing and and look i think i think that happens for a couple of reasons at least the the caliber of people that are joining right as i you know when i look at projects i look to see what the the conversations are like in the community and when there's bitching and moaning and complaining and devs do something and all the typical you see in a lot of these communities to me it's a sign that that this isn't necessarily something that has fostered analytical or intelligent or goal motivated thinking and when you look at projects like yours and you hear the kinds of people that are are diving into it and are excited about it i think it's a symptom of the fact that this thing is so powerful but you also you're you all probably as the founders your approach to this that number one you want it decentralized but number two you understand the nature of the experiment enough to know that things are going to change and that you'd rather have the wisdom of the community help you make those changes then just try to do them all by yourself the the the vast majority of the ideas for integrations and largely the success of the protocol could be attributed not to us but to the commuter and that's you know that's the best part yeah that's fantastic that's that's a really that's a really nice story and it it's cool that people can actually dive into this thing see it in action and become a part of that what you're telling right because it's going to be a constantly evolving growing and changing thing that's great what besides kind of this very complex problem of of handling cross-slash multi-chain bridging are there other things that are currently um actively being worked on that you could talk about that that are coming for the protocol yeah so there's a wide variety of upgrades both on and off chain to be in stock that are being worked on by beanstalk farms feedstock farms recently published like a six-month road map i'm celebrating six months of beanstalk and looking ahead at the next six months and there's a variety of different things from a middleweight an open source middleware suite to support easy integrations and development on top of beanstalk to an open source branding and style guide and a totally new brand identity uh which is i think much needed you know we're more certainly not uh brand experts or have any real design sense any but the whole website's gonna get a nice ux overhaul and ui overall and that's in addition to as we've been talking about a variety of continuous update upgrades to the beanstalk protocol to allow it to really seamlessly integrate with with with the rest of the ethereum ecosystem and ultimately dfi at large so this is just hopefully the beginning of a wide variety of different developments happening and you know very excited to be a part of that you know it's interesting that the both all of those sound exciting but the the interesting thing on the brand identity side is i i think that's actually going to be a very interesting task for the for the community to solve because there is something inherently approachable about what you guys have now it it feels very tactile it feels very much i want to figure this out and use it very friendly slightly cartoonish but not too much that it doesn't feel serious enough and i certainly understand with kind of the overall vision that you have for the protocol that it also becomes a very serious and important thing but i think it's going to be a really delicate balance for you guys that that's going to be a really interesting thing to watch and see what comes out of out of the community from that between cilla and corydos we sail yeah yeah that's so that's interesting wow okay so are there do you think there's a time when you all as members of publius or or founder publius founders is there a time where you're just kind of sitting back and assuming a role of you know why sage advising everyone into the community but this thing is just rolling on its own or do you really see yourself personally um pretty hands-on for for quite a while to come so certainly the former is the goal but even more than that the real goal is for the protocol not to need regular maintenance or upgrades so the six-month roadmap does a pretty good job of laying out what the upgrades to the ethereum maintenance implementation of beanstalk need to be and beyond that it's unclear what actually needs to change and so the goal is to get bee's talk to a place where for the most part it's running fully autonomous and that is the goal and so at that point in time we would certainly see us we do see ourselves being much more hands off and more than that you know at that point beyond business development and continued integrations and and supporting all those integrations via a maintained user interface like the goal is for the protocol to become less and less mutable over time so certainly that's that's the goal yeah so you're approaching this that the goal is i i think is something that becomes if not radically at least significantly decentralized um i i would assume that from the from the perspective of tweaking the algorithm of the models that happen in there that there'd be some modularization of the functions so that that's something the community could still work with but you you would assume that the underlying base concepts and functions of the system are out there functioning on their own without being changed yeah the goal is for for beanstalk to be architected in a way that's both gas efficient and really flexible to be used and integrated with and within a variety of other protocols so the goal is to leverage the composable nature of ethereum in a variety of new ways like odds becoming ccbs and you know we were very excited by all these different ideas because again most of them are not arts they're things that have been proposed by the community to create utility and new innovation so that's that's the coolest part that's great i i i often wonder when i look at protocols like yours if if there's a day when when an interface by the project is no longer necessary i i don't think that's necessarily realistic but i i i like to think about the composable nature of these things getting to the point where so much of the function and the integrations happen that other people are creating on top of it in a majority of the interaction because something that's not even requiring an interface by the originating protocol yeah i think ultimately the goal is to always have a way to interact with beanstalk in a simple way open sourced and available to everyone and there could be not money user interfaces in the process of being open sourced but the i think you're totally right the goal is for a lot of that interaction to start happening either in autonomous fashions with other smart contracts or being abstracted through other protocols as well yeah and i think that's something that a a majority of the users in d5 and and certainly the people outside of d5 don't still comprehend what's coming from the perspective of that and and to me that's that's probably one of the most exciting things about working in this space what is there anything else that we haven't talked about today about what's happening now where things are going or even what the experience has been like do you have you have thoughts for people somebody that may be you know teaming up with a couple of folks to to create something new in the space that people should be thinking about my thought would be to to balance making sure that you're you know what you're doing with being willing to kind of innovate and with beanstalk both upon deployment and since deployment we've been very much innovating walls figuring things out and that's a function of a lot of new opportunities that have presented themselves and so it's a question of what how soon should we pursue legible stock versus fungible deposits and how does that relate to different integrations and now that this integration is happening how can we leverage that further so it's that all can happen though because beanstalk was designed via core principles and the those principles that we started with which are designed to create products marketed fit it's ultimately at least in our belief why beanstalk has succeeded thus far and so the it's not necessarily advice but the through our experience the real learning thing has been to make sure that you have the the core piece figured out and then the rest you got to be ready to innovate and change but if the core is good that's that's that's probably enough to get started uh that's definitely advice and it's great advice i i think that's i think a lot gets cobbled together without thinking about the core of what's going to have to drive and run this run something for the long haul so that the the innovation or the experimentation on top of it is easier to do and more secure and stable so i think that's great how can people get involved with being stock as a user and and in in the community where should they where should they go to reach out to you guys so the discord is the main place where all the fun and community and development is happening so you can access the discord from the beanstalk forms twitter from the bean.money website you can probably search being stuff on discord but that's that's where all the fun is happening so if you if you're interested in learning more becoming a part of the community that's definitely the place to hang out cool is there any particular types of talents that you guys are looking for currently besides i assume you're always looking for developers but any any other people that you're you really are always looking for developers always looking for i mean honestly just smart curious people so if you're smart and curious you know there's likely something that we we need we need help on at this point in time because there's so many different things we're trying to accomplish in a short period of time i always ask this for every episode you answered it once last time but i think are there are there projects or people that you've gotten to know or know about in in the time since we last spoke that you are that you think are doing some really cool and innovative things or that you've gained a lot of respect for yeah i would just shout out tally wallet who's build a decentralized a truly decentralized wallet and working to do that uh step by step and that's that's not a non-trivial process but a necessary part of the big ecosystem here and we're we're excited to have beanstalk farms working on an integration with tally wallet into the money interface so that people can start using cali wallet with beanstalk so that that's we definitely give them a shout out oh i'll have to check it out because i've never i've never looked at tally wallet i definitely want to check that out thanks that's great that's great well probably thank you so much uh for your time thank you for creating a project with strong fundamentals and it's awesome to see that such a an amazing community is growing up around it and innovating hand-in-hand with you guys i appreciate your time on the show today man it's our pleasure thank you for having