So, what are we doing here? And there's a lot of it standing on one of these. And they propose a variety of foods to be in stock. which, in my opinion, is the largest upgrade to the tank maintenance model since it has gone live in the sense and adds a whole new dimension to what it means for being soft to maintain that.

And that is worth discussion. So not all of the resources that are outstanding are covered by this discussion because they're not exactly related to this major maintenance upgrade. But, we will I think those are those are going to be discussed here after we have this sort of major paid maintenance discussion. So and Parks knew exactly what to call it.

But we can't be in such a safe space. And the general flow is that we're going gonna think about what being struck is doing from first principles, whether what are the dimensions on which it should be optimizing, trying to understand those dimensions. And we're going to talk about how to instruct some of this in practice, starting with the content maintenance model, then expanding to discussion about the new pact made its model that includes the liquidity to supply ratio and then sort of tying up a bunch of loose ends regarding, related content, so to speak, so related to our seats.

So I see the question, is this a new RC? No, this is just a discussion that sort of explains the intuition behind, most of the significant portion of the outstanding pair of seats. So given the extent to which they change being stock based or a proposed change being staff figure that it would be a good idea to spend the time to write it down and then also spend the time to talk about it.

So that's what we're doing. And Seth, without further ado, let's talk about what the stock is actually doing. And the reason we call it being stop date space is that one way to think about what being stuck is doing from a K minutes perspective is that it is it is operating within some sort of space time itself or time is in seasons in some capacity.

It's say time, it's continuous, but then it's operating in some space with respect to EG. And so by better understanding that the nature of in the future is of this space. In other words, the world in which the stock operates, we can better understand what being stock should be doing and, and, and how these staff should be doing it, given its position within space.

So there's a lot that can be learned about these by understanding the space in which it operates. And that's what we're going to be discussing tonight for some of us are going to read some of this I'm just going to talk about. And so we'll see if people don't like the flow. Feel free to chime in and we can switch it up as well.

And I'm paying attention to the chart after that disaster with the microphone, Charlie. Okay. so what has been stuck doing? Being stuck is trying to maintain track. Peg With respect to what? To price. So at the beginning of each season, the inside of jet there is parameters autonomously. It's an autonomous stablecoin within itself in response to its current state in an attempt to, you know, technically regularly oscillate the price over its value peg indefinitely, which what that really means is maintain the peg for as long as possible, indefinitely.

And, you know, when the stock is doing this, the question is to what extent can it measure its own state and respond to it? And. And obviously, a system as sophisticated as a stablecoin, and particularly a stock has a lot of different moving pieces. So we're going to we're going to talk about a lot of them. But there the two primary questions that that being stuck at back to back mentions are, one, how should be a self classified state at the beginning of the season?

And two, how should I respond to what state at the beginning of each season in an attempt to return to an ideal state? And so to the extent that this discussion is talking about the new stage and the incorporation of the altruists are into the the new payments model after the seed goes live. These are the two questions which our discussion is mostly going to be focused around.

I see a guy typing seven in no good. That's no problem. Cool. Shadow guy for the definition. Yeah. Altruism is liquidity to supply ratio. which we will define. Sure. no question. What, how should you start classified state at the beginning of each season and what are the relevant dimensions on which the adoption evaluates state? What are the important factors?

So to say in an evaluative state, it doesn't matter what day the week it is, probably not so much from a package perspective, what you gather to use to evaluate such current position. Alan Jackson So once we've determined what the axes are, how should we start to think about actually measuring position along chances? What is the data available to be stock that it could use to figure out what its position is?

Then once we understand how to understand where it stops should be, how being stopped should measure its position. Then the question is, well, what are the features of these axes? and then based on we know about the shapes of these axes, the shapes and scales of these apples, we should say, what can we possibly say about the state of the derivatives of position?

So if we know position and we understand the features of these axes, what can we say about more than just position what we say about direction, what can we say about acceleration? And then finally, how should Bienstock actually evaluate its position, direction and acceleration at the beginning of each season in practice? So these are the questions we're going to try to answer around classifying state.

And then the second question now should be and stop respond to it State That's something we'll leave for later on. And maybe it would have been better to have a slide thinking what those questions would be a skip ahead and just go through it briefly. Apologies for doing this a little bit on like, okay, how should you start?

Respond to it, start at the beginning of each year then in an attempt to return to its ideal state. So once we've classified the state and really understand the instruction, really understand its position in the stop space or speed sucks space time, how should we respond? How should act? so the questions to answer on this dimension are, what is the natural flow of state?

So given what we know about what's going on, what is actually happening to being stuck and then to what tools to spin state, how the available to perform. And so what can be done do given what's happened. then we want to understand more deeply how do these tools that has available, how does it actually affect you stuff?

and then finally, how should the instructor use these tools in practice? So this is the framework for the beginning of our discussion, and hopefully it's helpful to provide some sort of framework. And so in all tracking is understood in some context, that Question 1.1 what are the relevant or dimensions on which to evaluate the start state? So in other words, what are the things I see?

Will the doctor share? The doc is public. It was posted in a well, you want the latest version. That's not all the same. They're basically the same and that version's basically the same. okay. So anyways, what this means is how should Bienstock even begin to think about what is important from a tag maintenance perspective? So first off, you start is a stablecoin protocol, and its main purpose is to oscillate the across the indefinitely beyond in price, particularly for non collateralized Stablecoins is very reflexive because when price is greater than its value peg, the systems tend to grow at some sort of inflation reward.

When the price is below peg, there's no reward. So people end. So price seems to be for a lot of reasons, a very important component of payments. Of course. Now the stocks primary maintenance mechanism, up until the system has gone high and the theoretical firm, the theoretical basis for its existence, new standards have to be stablecoin is the field, the credit facility and the ability for being soft to borrow beans at a reasonable interest rate is is obviously essential for the long term health of the system.

And, you know, it's hard to know what is the right metric for debt level per say, which that discussion will happen shortly. But very clearly because being stuck is a debt based system, some sort of notion of the debt level of the system. It is a good idea for being soft to use to determine its health. There is a position in in in in space which is a proxy for its health in the grand scheme of things.

Right. Being that wants to be close to its ideal state, how far away it is and its momentum towards or away from ideal state. These are things that we're talking about here. So prices doing very important debt level seems to be very important. And those were the two axes on which the original stock model was created. But over time, via the introduction convert and just being started running, it's become very clear, very clear that the liquidity, liquidity levels of the system are very important as well in terms of determining you to help with the conversions in the silo.

There's a lot of change in the in the health of the system as a result of just conversions. And so from this perspective, there seem to be at least three axes on which to evaluate the health of the stocks being structure, overall situation or state. now the question is, should there be any other axis consider and I, I as will become clear on this, discussion, there are other things considered that are sort of secondary peg maintenance, mechanisms like the LP, C distribution, the distribution between various liquidity pools or silo deposits, that's a secondary tenet system, for a secondary dimension of payments.

It doesn't actually affect the price or the down level or the liquidity level, the things that would determine the overall health of being stuff. So the question is, you know, at least in this case, whether it be stocks, liquidity is against E or against USD, the amount of liquidity is the important thing in terms of its overall health.

the distribution of liquidity is more of a secondary component itself. So the question becomes, is there anything that's more important? is there anything that's more important Like that is another primary axis on which to evaluate the stuff. And as of now, there doesn't appear to be any from our perspective. so that gives us three actions and our goal is to dive into these axes and how they mix together and to understand what each stock is actually doing and how it's operating within these dimensions.

in order to regularly price the price or it's going for as long as possible. Okay, So we've got the three dimensions. And the question then becomes, what are the, what are the actual data to use? and you could use a bunch of different things for price, you just use something that measures the price itself. you can measure delta B, well, you could measure Delta V, the amount of V that would have to be bought or sold to determine the price to pay, Delta B as well.

We're more familiar with, but you could denominate things in the value of, say, now the manipulation resistance of these values. that's a separate discussion which will treat lately here. lately, later on. But the actual decision as to what buying stocks should be with respect to price, is that, you know, it's funky in practice in stock measures, Delta B for the most part, sometimes a measure of price, but typically it can just measure.

Got to be it's a delta B is positive. That means price is also greater than B. If it does, the view is negative price of S&P. So to a large extent, being stuck in use Delta B as an indicator for price, but nonetheless, in the grand scheme of things, price is really the thing that matters to being stuck in stock.

Doesn't care about Delta B, being stuck here is about price. It does care about Delta B, but that's more of a derivative of the things that it does care about, like price and liquidity. So on the price axes, bienstock measures, price. And that's what we're going to evaluate in terms of its that dimension. The price dimension. second, we've got the delta, we could use the Delta Supply ratio, which is what we in fact currently uses.

being staff would use the total amount of debt outstanding denominated in beans or V. but of course, you know, larger systems can handle more debt, so it makes sense to denominate the debt or to measure the debt, the debt level, in terms of supply. So using the debt to supply level is probably be in stocks.

Best option as we understand things today. So the the debt to supply ratio in addition to price, those are the two axes that Bienstock uses in the current payments model and hopefully over time, you know, the well, not over time, very soon, hopefully, the third dimension will come into play, which is liquidity level and similar to debt level, we could measure the liquidity to supply ratio, or we could measure the total amount of liquidity and denominated in and, or V and in a similar way, the debt level, the, the larger the system is, the more liquidity it needs to be similarly healthy.

So from that perspective, the liquidity to supply ratio makes the most sense. So before we summarize some finances are a little funky. Okay, why would you say that other secondary components of liquidity or segments are the distribution of liquidity like we were talking about and in the future, potentially a distribution of liabilities, something Star has multiple, assets that it is holding PAG to?

yeah, there can also be a share of the payment system with regards to those liabilities or some share of optimization around managing liabilities in addition to liquidity, which is already sort of a liability management system or anything. So liability management system. And so anyways, where does this leave us? We've got three dimensions on which to measure being price debt level in liquid, and we're going to measure price as a price at that level as debt to supply ratio.

And liquidity level isn't liquidity exploration. What does this look like if we're talking about space? Well, you can think about it, with some sort of zero because they all have a zero. If we look here to the left, the origin, we have a low L2 inside you high up to us are low price, high price here, a low level here.

I love that level. Or you can, you know, if you want to start thinking about things just happening in this this line up to you, it's all you know this is more closer to where this this actually ideal equilibrium at the origin that the insight is trying to move back to the ideal spot here at the origin and practice things don't really fit into this you know, so easily.

It is to visualize. You can sort of arbitrarily say this is where it is, but it's not so easy to visualize as we'll see. So this is this is more of the model in which we'll be working on. Okay. And on .2.3 of an answer, which again, are what are the relevant axes and what is the data do you.

So 1.31 of the features of each relevant axis. So given that this is the the space in which the stock is operating, what can we really learn about this next? What are the features of this space? is it discrete or continuous and based off obviously measures things discretely at the micro level, but does that continuously does it measure up, measure things just continuously?

I classify them as continuously or just really couple different means in this, the shape of each axis. Okay, we'll talk more about this. But basically it is what is the axis look like and how much is it stretched would be scale. so the shape of the axis, the shape of the space tells us a lot about and what being stock is going to experience if it is in that position.

And then that a couple of things to think about and some of this will make more sense in words. Some of it will make more sense in in pictures. I'm just going to talk and we're going to read off of this for some. So what are we talking about when it comes to shooting, though, the position of being stock with regards to each axis?

is going to exhibit some sort of force on itself with respect to position. So just in the case approach, for example, when being stock is at a price that is higher than the higher than its value pattern, there is upward pressure on the stock on the right in terms of price. And the higher that the price goes, the more upward pressure that being stock experience.

And, and so that is, reflexive, that is called reflexivity and reflexivity. It looks like this upside down bull and where if you're trying to bounce a ball on top of here, it tends to just fall off. And even if you get an on top, if it has just a little bit of momentum, it's going to roll back off again.

And, you know, and the case of economics and even the exact theory has lots of data available to and things are very imprecise. So I'm a big fan of the metaphor of trying to find the top of a reflexive system might be in stock, kind to try to keep a ball on a maybe even a small ball on top of on top of here.

Or maybe it's even over here. Over here, with a leaf blower, which is obviously an imperfect way to apply force that has the ability to pay maintenance, to apply force. It's going to, it's going to affect things in ways that it doesn't necessarily want. So it should tread lightly and apply force minimally, but of course, minimize the extent to which you can stop injuries, a death spiral.

So understanding this task just really to point that out. But when it comes to shape, you know, the question is, is it like this or is it like this? Is it, is it anti reflexive? So imagine if you set up we're solving an anti reflexive problem and the higher price got the more it just naturally trended back towards and sort of like a collateralized stablecoin that is redeemable as soon as the system works a little bit off peg, there's an arbitration opportunity that sends it right back to panic.

And so this is an anti reflexive system. So think about how much force you would need to actually displace a system like that, assuming that it's actually paralyzed and it's, it's a mess. whereas in the case of Bienstock, it's a highly reflexive system system. So the higher the price gets, the more people want to participate. And that's a lot of the transients and the less healthy and the more people want to dump it.

So Bienstock has a very hard problem to the, the, the triangle stable objects. And so we digress and defer to you on how you want to handle questions. But there are a couple so going to wait for later. I think that totally works as well. sorry, hold on. In the flow did lose track of the the computer answer.

Okay. No. And they it's these two questions that I see so far then a hold off on responding to them just yet. I'm the client. I won't get to them. Okay. then there's a question of scale, which is sort of a way to understand friction. So particularly when it comes to the liquidity levels, a bead shop is going to experience much more volatility in terms of price and debt level at lower liquidity level, whereas in higher illiquidity levels it's harder to be stopped, which means as much price volatility and reflexivity.

So in practice, the distinct, the relationship between shape and scale is deeply, and so understanding reflexivity and volatility and you know, in terms of the analogy, it's like there's some sort of force that means that it's acting on B stock as a result of these stocks position. And then there is some amount of ground that needs to cover distance within space that being stopped will cover as a result of that force.

So the force is represented by the shape and then the distance covered is represented by the scale and then constructs. Task is to come in and apply the right force to sort of counteract or to support the momentum given its position in space. So what's the best way to understand all this stuff? And I think from the ground up.

So let's start with one dimension and then build up to two dimensions and then try to build some intuition for how this all works in three dimensions. But let's start at the bottom. So this is what pace looks like now. This is sort of what we were talking about before, where the further from the home can you see a area, the further from the value tag in either direction, the more force there is acting on being the state of being stock with respect to price in whatever direction.

And so the point is, if we're trying to just understand in a single dimension, given the promise, what is the effect of price on price? These are these arrows represent the effect on the price. Now, in short, if you you can convert the lengths of these forces in this case into the slope. And here and what you get is that, yeah, in two dimensions, even though it's actually still only just price, you get a visual understanding of what price looks like, what the space in view space, the price dimension.

This is some approximation of what it looks like and what is the intuition for why this is what it looks like. Wow, let's just break it down. At V and V, there is no ending, and so there's still some sort of natural downward fraction x stuff there is minting out at a slightly above V at the top of the time and so at some unknown value, the prime the there is sufficient meaning to offset the natural tendency downward or just to sell below ten first, because it's above the it's it's not technically below par itself.

The prime is probably close to up here, but the two separate values then. And the point is that there's downward pressure there. There's no pressure in either direction. There's no force in either direction at the prime. Whereas now if you go greater than the slope tends to increase. And as what this is showing is that as the price gets higher, as the price is higher and higher and higher, there's more reflexivity naturally, with respect to price, the higher the price goes, the more upward pressure.

That means with respect to price. And of course, similarly on the downside, the more the price decreases, the more downside pressure there is with respect to price. So that's where we get this upside down parabola and so don't bullshit, which is of course way more difficult to to evaluate if you're buying stock than if you have something like this.

And okay so and the reason this is gravity is shadow guy, this is gravity here is because if you have the ball here, you've got the the relative effect, the gravity of an on your position on this ball or parabola and maybe a hill is the way to think about it given the slope, given the steepness. So the more steepness, the more the the more quickly the ball's in.

Fall bank down to extremes. So that's what this is trying to demonstrate. Now a couple features on this and then I'll just touch on couple dual is a new parameter introduced in the sixth gauge where with respect to price there's some price that's due to the piece that really doesn't move the price higher than this level. And the stock should be aggressive when the price is higher.

And the price is something that hasn't really discussed to date and so those are the new terms. The when in the document we have consideration of the shape up until the third derivative, which is not just whether or not the the ball is shaped like this, like this upside down if I guess right. So that if you want but also how much is the slope change the rate and the slope and is changing faster or.

Well and then there's the scale. Now the price is just going to tend to be more volatile or when the peak and mean that for a given marginal change in price, if the first change is a thousand of a point on ten to the point, and that's going to be way more impactful and post a P is and here sentiment and the first you get to be the more tactful given partial sense and solution compression on this axis which isn't really shown but that's the is all right so that's price that's one of our three axes.

Now we're going to move to Denver. That level is also reflexive in the sense that at higher debt levels, bienstock requires higher temperatures to attract lenders and therefore there's more debt issuance. So has the debt levels, more debt issuance and a lower gap. So there's still some reflexivity here. However, there's much less reflexivity then with respect to price.

And worse than that, I guess not worse than much worse and I've not certain performance think this is very high is that you start has no idea what are the actual values at which the reflexivity of that level is going to be experienced. Whereas if, if you think about price it's so obvious, right, particularly when it comes to selling V So it is easy to understand where generally the orientation of this the shape is when it comes to the debt level, it's much harder to understand the organization.

Why? Because it's unclear at what debt levels it will really it will really cause a change in the interest rate required for being stock to attract lenders. however, we could still say that at lower debt levels, a marginal change in debt level is likely to have a much larger effect on the debt that needs to pay than the same change in debt level.

A much higher dollar. At some point that may change. It is sort of like a runaway debt level or B just has to be a much higher rate. But the exact strategy is just not to pay that rate. And we now, instead of paying an infinite rate and now with the introduction of conversions, it does need to pay an equity interest rate at all.

And so this is a bit approximate of what debt level looks like. You know, there are some significant points you're talking about and then they're made up. They're just like reference points to better understand the shape of debt level. But there's some point and we don't know if this is an actual reserve here. Yeah. There's some point at which this system is, is so healthy that it's able to issue as much debt as desired at low interest rates.

It's just that the debt level really doesn't increase quickly. So even when the price decreases in stock interest issue as much debt at once at very low interest rates and therefore the debt levels just not going to increase, frankly, once you get above the debt level, is going to start to increase more quickly until you get to B, which is the point at which the debt level is healthy.

But it's it's unhealthy enough that it becomes harder if you're going this direction are easier if you go in this direction to attract means. And so at this point, you actually see an increase in the interest rate and damage to pan and and it is in the reflexivity. And so here you have downward force. There's some point in which the force actually changes and you are that now being stopped for the marginal change in increases in debt level.

Yes that is having a a harder time, which is always the case, which is sort of the thing that makes showing this value a little bit difficult, is that it's unclear at what value this actually changes for the dollar. We don't we don't know in practice what are the levels of which that the debt level changing really affects the the relationship between the interest rate means that has to pay.

And so that's an it's a little bit unclear. Should it be flatter, should the current be a little bit more to the left, a little bit more of global conflict? The reason that it's spread, Charlotte is from the right is because the as the temperature gets higher and higher as we've experienced, the becomes a point where the marginal increase in debt level doesn't really affect as much.

The temperature at which feeds that needs to issue things and therefore the temperature, the debt level is less reflexive with respect to itself, a much higher debt levels. But of course there is a there is a point at which there is real, real significant reflexivity demonstrated or where the small marginal change in debt level results in a really significant change in the positive force on debt itself.

And now last and at least is altruism, the liquidity to supply reaction. Now the interesting thing is that the ultimate R is flat, meaning that the higher or lower liquidity levels and being stuck well doesn't really have anything to say with regards to higher level. So what's up Harry welcome. I'm Jones. Maybe come up here Sam and anyways, the algebras are is flat then like the previous two dimensions.

And what this basically means is that for a given change in the, in the outward sorry, in the level of liquidity, there is no real change in the force acting on the quantity level with respect to the higher liquidity levels don't really get higher since lower levels don't get a lot of attention. However, there has been a significant change in the sense of I'm being stuck with this fact.

Our students are at lower certainty because at the lower liquidity levels, the funding level changes very closely. I would also change very quickly. But the point is that the direction in which the liquidity changes is neutral with respect to liquidity so that's why it's flat. So the scale is represent, you know, sort of demonstrate that at lower. I was for a given, you know, force applied, more distance will be covered in space in practice and that's what this compression over here shows.

And at very high liquidity levels, there's just less of a significant change. in the footage and you could argue that it should be constant because the given change in the change liquidity a fixed amount. But when it comes to the health of being stock in particular, there's a lot more volatility between 0.1 and 0.1 Jun zero five versus 8.18.8.2.

An 8.5. so and it's also much harder for Beechcraft to go from 8.5 to sometimes it takes more force. okay. Yeah. And big liquidity running out the door traders small participants also not that are sure but now you're talking about like momentum so just eating a drink. Well the reality is that that would likely come out in the form of price.

Right So a decrease in liquidity levels by a constant price and that's not necessarily going to lead to lower liquidity, email it to lower prices. But but it's just as likely at lower the three levels, assuming all else is equal for the liquidity level to increase or decrease from there. I think as opposed to price and debt level with current global, there's less of an excess.

Maybe there's an argument to me that should have a slide that you add, but it, it should be much less than the debt level or the price. And as we'll see, as things start to be combined, there's natural curvature introduced anyway, as and along the lines that you're talking about, Erin. Mary And Okay, so now that I'm now that we've talked about the shape and scale, at least briefly of each axis, I guess we didn't talk about the scale of the debt level, but it's hard to know what it actually looks like.

So, yeah, we're just going to pass over, even though it is treated with the stock in it. And now let's talk about direction and acceleration. So given the shape and scale, what can say more about if we now position along an axis? What can we say about the movement of being stopped and is it one one axis at a time?

So we show a price when P is greater than V, the forces is positive. So it's heading O and it's down, it's heading which of the intended S&P comfortably and and then in terms of acceleration are the more p increases above V prime are the more positive force. So there's acceleration when you have CTF, you can see that there's a more and more downward force and actually being applied.

So what is this about for debt level similar although we don't know the shape, but there's some point B at which point greater than there's a proportion more and more upward force and downward force, right? So net positive upward force and downward force. And similarly in accelerates that we don't really know the shape of this axis, not nearly as much as price.

And then outputs are because it's flat. There's no directional force here. So so what we've got the shape and the scale we've got there, the direction accelerate and how does that help us? Well, if we understand things in one dimension, we can put them together in two dimensions and three dimensions, and then we we've come to some sort of understanding of what's actually going on.

So the first thing we're going to do is we're going to talk about price and data and we're going to try to treat price and that level and stomach fully well, because that's one of the current campaigns. So let's see if I understanding the shape scale, the reaction, salvation of price and debt level, if we can if we can understand how the stock currently works.

And then from there we can try to expand it and understand some of the changes that are being proposed. And then also understand, of course, the major change to the technique of this model model. Okay, So question 1.43 stated is given the shape and scale of each axis, what can be in stock? Infer the state of needs done in terms of derivatives position, so direction.

So now we determine one dimension, but now we're going to try to do in two dimensions. And so the questions to think about in order to answer this larger question are as follows You want to understand the interplay between prices at that level. So we want to understand and is price active differently upon itself at various debt levels?

How does debt level at different times of at various prices? What is the shape and scale of the two dimensional price and down level? And then given the shape, it's the other two dimensional space price and that level watching it for about stock stop state in terms of derivatives of positions and direction and acceleration. So can we take the exercise that we just did a one dimensional and then sort of stitch together the spaces into two dimensions?

Now on this little sloppiness, if we can fix this itself and give. But we persist yet for again, what are the effects of debt level on price? So how does price act differently at different outlets? Now let's just think think about this intuitive At lower debt levels, it's much easier for the inside is healthier for us, it's much easier for being stock's price to pop.

There's less debt, there's lots of new harvest happening over the harvest that are happening may be newer, so they're less likely to sell versus reinvest. So it's much easier for the price to pop out when there's lower debt, but then it's much harder for the price to dump very low. And this system is healthy. You can, in theory issue debt that higher than higher debt levels.

It's much harder for the price to pop because there's so much debt outstanding. Debt starts to be paid back. People can be skeptical and it's much easier for the system to enter a death spiral with the price plummeting. So that's reflected in this. This is our diagram and this is your watching interventions, which I think is much more easy to visualize something like this.

Or you can sort of see that the lower debt levels, there's much more of a tendency towards a very and I promise and it's always been such a great approach, a low price rise at low debt levels and especially a high debt down here. It's very easy for a low job and low debt levels. It's it's much easier for the price increase as an identical suspension.

And then there's obviously some sort of neutral, neutral debt level. And here that is sort of the central shows that are that we are looking at a little bit before seven. That is sort of the cheap US price. What does price to look like? What is the force of present itself and different? Yeah, now we switch it around at different debt levels.

It's just been at different prices. And is debt level now Of course when the price is greater then it's tied to the establishment. So the debt level decreases and when the price is less than the inside, it's borrowing needs. And so the debt level interests. So we didn't really understand the shape of debt level to begin with per say.

But we do understand that a really high prices, the debt level comes down at a very low prices, the debt level and increases and there's a sort of a question here that why does this not like this? Why isn't just straight down and just to explain it firstly, it is that this is expressing that higher prices, the shape of debt level with respect to itself is still reflects there is still some price excuse me, it's not some debt level.

I would say that the total force on debt levels still are not positive in that respect. Again, and however, that force is going to be very small if it's there, whereas the vast majority of the time it's going to be a debt, but it's still there. So it's not it would be crisis to second, what is this of like stretched out something like this.

You can see again, low prices and it's much easier for the debt level to increase. You know, from the crisis. It's about the debt level. So the question is we have this just spaces. Can we stitch them together to understand the two dimensional space? So we have these two spaces. But the problem is that there actually is not a lot to the price you have to do your price, period.

So what are we going to rotate? So you rotate a negative are low down, low down. I go, I can go hiking. Motoring is low price, I price high price a lot and better than just the options that you can see that the shape also lines up to some extent where a high debt go and low price. It's a there's a curvature back to a lower and lower levels of high prices and I should say at a high price as high debt levels, low prices.

There's a tendency downward and it's low down levels, high prices, there's a tendency upward and on the actual in the other forms, and it's actually the same trend illustrated here. And so we we can somewhat intuitively ditch the stance together. This is what we get. So here we see the very low of a line and this quarter almost subsample.

It's the other moments around the sandwich and I'm sorry about that. I great I'm glad to zooming in I'll try to zoom in if it's if it's not clear, you know what I mean? But remember, there's also the the pdaf and the whole even and wonderful. Okay. So this is the stitched together space. Now, the the features of here we're talking about here at a very low price.

The system is never going to have an increasing debt level. So here in practice, even though you still have this reflexivity now that you actually merge the spaces, we do have that trend that you're talking about before because the debt level is never increasing and the price is low and in fact it's never increasing. And the prices there are a little bit, but it it's also not going to decrease, but it's neutral.

It's only going to start to decrease at higher prices. That's reflected in these orange and red ones. And whereas price and you do have some sort of still reflexivity maintain that there is debt levels, even though I don't know, because it's much more of a tendency towards a low price and at low levels who had low debt levels as much of a tendency to hybrids.

But the really interesting thing is that you can see the sort of these two holes that the system falls into and you would say, well, what's the big problem with falling into this hole Back here? We have very low debt and I've got a very high price. Sounds like jubilee. You know, I'm sure Harry Smith would be very happy if we're hanging out over here.

Lots of minting and no debt. But of course, the amount of force to take the system out of here, we're almost certainly just so steep and deep. We're almost certainly force being stuck over here into a debt cycle with low price and high debt, which is, of course, what we've experienced in the past right now. And this system pumps it.

Of course, that's and actually this is shown this is the system clearly has a tendency to pump. I don't see it up. And it's good to know that the intuitive understanding for how this that the spaces merged together really does show that inflation this is what this diagram looks like in two dimensions. We can see the tendency towards the horse.

And here we just turned it so you could see this, you know, the tendency towards the same horse. There's an orientation of the same axes. there's a lot shift people are for later. And this is a more formal discussion of the shape and scale of the moment. We just had a direction acceleration. But the point is, I think quite clear if you're over here heading down here in a natural accelerating game here.

Over here. Natural. Accelerating, Yes, quickly. So the cool thing about understand this is very clear what's happened in such a when the price is higher than the prime, it falls into this song when the price is higher than lower than before and also do this. And now, of course, we're waiting here with a high price. So it's relatively, you know, non reflexive, but the system's basically hanging out here, right?

It's going up. So it's got a little bit of an uphill climb in respect to that one. It's just hanging the that's it's experiencing that. But it's, of course, liable to fall here. Dog falling off. And so that's what's going to happen. The first step down here hasn't really got period that's it's got okay now that we feel like we got to 1.4 sufficient like what's going on in two dimensions how should we start actually evaluating position, direction and acceleration at the beginning of each season?

In fact, it's because it's kind of it's got to act at the beginning of each season and sell meetings back and so first is the question of time. Should it measure more than one season? Should it matter just the previous season? But given as we're seeing, there's a lot of complexity here, I think that the general preference should be to keep things simple as possible.

Therefore, it's not being sort of just responding to its previous season as opposed to an extended period of time seems to be the most intuitive, but of course a more sophisticated. I mean, that's not a after more time, but not if you hit that immediate that that would be at least significant thing. So how should you start to measure price?

I as we were talking about earlier, BIENSTOCK uses Delta B generally as a proxy for price. Currently it does entirely, but because now we have Q, which is then the price is too high. And of course being so does have to check the price and the other B as positive. So there is now some mentioned time in which case the ancient uses the time needed price in the same time where the values that are used to calculate.

Dr. B And then it evaluates pressure to keep and not only goes into effect and it goes down, then views are currently used as the the rate. You can make an argument that it should use the deferred as well because that's debt. However that that stock has never been upgraded to include debt in the end to include fertilizer excuse me in the debt level calculation.

Just because of that, there's nobody that's very different that by the time all deferred is ready to still be just excessively high. So it just seems like that work that doesn't get any. So that's why that has been working to date as far as actually. So the point is being stopped. You just the Padre directors have done well, even of course included for it would be more perfect.

And so being value is the debt level and classifies it as very low, low, high or high, depending on its reference to, you know, these three points. Yeah you start your upper the the tricky part as we as we were discussing is that we have no idea where A, B and C on practice is to setting. Yeah. A longer term stronger number is very much more hard.

Some say the triangle is quite difficult like this. Now I'm turning towards the lower side is safer. I but it's unclear how how those should be set. And right now it doesn't seem to be the most important thing to figure out when at some point you start to spend more time with the. Okay, so given the summary of analyzing them in one dimension, each one about two dimensions, and it's the composite of the two.

So we have two cases for price rating and for case for war in the future, while the third is for price and now the question as well. Bienstock is evaluating its position, direction and acceleration. Well, with respect to what? So there's ideal level step, right? The star, the optimal debt level or price comparison, the debt, Abdulmutallab, I should say, which is regularly with this, the price in particular apostrophe, but also from stopping with down to and for a number of examples just on this was V and it's it's now letting didn't and so it's doing okay given that the price is the main thing that it's focus on it's it's an okay but first down

here on the resource ideal equilibrium this price will be it wants to be fair equilibrium price for the passage of stability. It would be not just for price to be a V and there having to be a star, but you'd also meet demand for oil to be steady. Why is this? It's because demand for soil is really a proxy to be studied, to understand its health and its momentum, and in particular, B stock's ability to issue debt, to respond to the market.

So many bids, it's always a quick response to price when the price is too high but can actually affect the market by borrowing from the market. So to be safe actually at that price by borrowing from market. So that's the main indicator for the instability to apply force as needed to the system. And so that's the the other indicator here.

And so what that is doing in order to try and get how do we leverage is precisely at that level and for us leading us the star and the soil being steady and well, let's do it. It tries to understand well, what is its direction. We understood that the stock is naturally falling into these two holes. So when we stop is when the price is greater than one.

As we are saying, the direction is always here. And when when the price is less than one, it's less than that. I think it's always in this direction. And we you know, ideally for lubricants to be somewhere, we're seeing in some here. So the question is what is being such direction with regards to idea of delivery? And eventually you would say it's sort of moving towards it here and then away from it here, then towards the gear here.

But it's really naturally accelerating away from it, accelerating towards a semi, etc., etc.. But through using demand for soil, through his, you start measuring that ability to apply force, particularly in this direction. It just means that from always through maintaining by force in this direction, being stuck in measure whether or not it's accelerating or decelerating in these directions.

So that's generally how the campaign in its works is. There's two prices for debt levels and then three measurements demand for soil. And that's where the current 24 cases come from, where it's either accelerating, steady or decelerating based on demand for soil towards or away from ideal equilibrium, based on the direction that is implied from the price in the dollar.

So that's how the current system is measured. That's how the shop measures what's going on and basically, before we move on to talking about how this works for the other dimensions, that it's probably a good idea to sort of pause and talk about how we stop actually in practice classifies state, classifies what's going on, and then response to state intuitive actions before we move on to three.

So let's see the question here. So before we move on to the US sort of response, let's let's see what passive assets I thought the debt level seems to increase the most when the price is below one, but there is enough feed in the system, the people actions. So a debt of someone is it's more likely to increase at 9890 is captured by the model.

I lost track of the axes. Well the axes are price and debt level and these diagrams but the point is your question is really trying to get at the shape of the debt level and saying the relationship between price and debt and that so is the debt level more likely to increase at $0.98 than $0.90? The debt of all can only decrease both of those prices, however, is likely to decrease.

It can only increase at those prices. However, it is likely to increase more. Sure, it may be more this likely not yet formalized. It concerns me, but the point is that the of the way that the system will issue debt is that at $0.90 you will have to issue much more debt. The debt level will have to increase much more in order to detect.

So that's really what this is like, that the effect of price on debt level is that it will have to at $0.90 being stopped off to issue much more debt in order to have that, which is a question just waiting for it to respond perhaps to a modeling or whether the lending actually occurred. No, it does not. And that's where demand for soil comes into play.

But that should start to measurement with respect to. But the point is that the model is accounting for this in the sense that it is showing that at look at lower prices, the debt level is more likely to increase and more likely to increase faster with respect to it itself. Sure, you can have the situation where there is no demand for soil, but without the silo that would typically be a situation where the system are just falling collapse.

So it's only due to the efficacy of the at this point that that's not the case. All right. That's fashion prices at equilibrium price because there is no net in there's no positive force. So. Right. Yes, that's exactly right. Through these measures, no positive force. There's some negative force because there's no magic happens to people like women here.

There's some opportunity reduction. So if the prime looks at the risk representative of what is in front of the risk free rate, probably somewhere about. All right, let's get into what business is actually doing in its current peg. Mean and small. So we revisit these four questions. Response State one What is the natural flow of state given its position?

So what's happening to be stuck in this two dimensional state to work towards us needs to have available to perform maintenance. Three What have these effects position and then how much of these which are used is true. So natural flow press comes down. This is sort of talking about what we what we said earlier on. When the price is above the debt level, there's this tendency upward and with the prices, there's pressures up in the reflexive.

There's a tendency toward in terms of price, but there's also a tendency downward in terms of down in the United, essentially more to the left. But this was all the diagram you can dig. But the point is that at some point you get over here and then you collapse, system collapses, then there ends up being in spiral, then it's over here.

And then for most of it, most of the system around here and now what can be start actually do within this space? Well, it can mean beans. It can be soil and it can change the temperature. And because price is the most important thing to pay me in this model, building means in living soil is currently independent of the debt.

And so we start uses the term weighted average debt to be to determine how many beans or how much. So to bid. So if the stuff is average enough here, it figures out one of the estimated beans to be sold to and that limits those beans reserves to if it's here and it needs not just selling beans you bought at the margins or turn to price if there's some sort.

And one one interesting with the discussion is that it multiply by some sort of scale or that based on the debt level the level and you probably know and we talked about that a little bit in here somewhere and the general gist of it is that if you don't over and the instrument for all, you're going to end getting that you're taking intermediate higher.

You're you're also in a creative continuum. Then the system's going to not return to payments. So it's a lose lose. And there's also a couple other reasons which are defined later. Yeah, but I have one at time, so don't we just want to just I mean, I could talk for hours forever and ever down this, you know, we spent so much time thinking about all this stuff and talking about it.

So, yeah, don't try to keep it somewhat brief, although understand we've been going for 90 minutes or I'm not even a third of the way through the document. So what can be so you it can be beans, it can be soil and it can change the temperature and the residues. And then it also can sell beans on the open market via something with the which just here it can sort of return its position back to the value peg pay off of its debt.

So it's right back here. And then by paying off all the debt, I so we're going to pay there's some sort of natural been forced to send it back over here. So instead of being over here the floods are this there's no you can't be over here. You got to stay over here. And so that's that's like the, you know, that's what the flood is due.

And the flood initially when it has that means this is a recent force for here of with a downward force. But that's a response to the fact that there was just the initial flood. But after that, it just sort of returns it back here. And then the system can just sort of flow naturally. It's unclear what didn't flood at some point.

It's sort of certain to trickle out here. So that level shouldn't be instruments, oil on it to change the temperature and it can repeat itself. How should it do this? Well, it depends how these tools affect its position along. Exactly. So we've been stuck. Is applying that leaf blower. What is the direction of the force and the strength of the force of that leaf blower in the instep and fundamentally, it's a design principle.

And each time you start midstream, it pays off debt. Samuel Where the price decreases through maintain the down level also decreases and vice versa. The price increases through the issuance of doubt that that level increases. So the I and correlation between it usually between the effect of these two tools and the price in the dam and raising the temperature needs to be in structural addition more again I to raise down to be by the same amount and lowering the temperature means it's one issue less than sort a change in the you know change in the amount of beans or changing amount of soil need to change the amount of force with respect to price.

And the change in the the and I guess also with respect to debt level. So because it's along these axes, but in changing the temperatures sort of to an extent and that is the slope of the axis. So you have these green lines that are sort of showing the trade off between price debt level. And the point is the more beans and the more soil, the more force along these lines that apply to the red force.

And then the higher the temperature, the the the the more upward force and it's usually as the temperature goes up, the the there is more debt issuance being issued. So there's more pressure. This rate, the slope has to the slope has to come down. So. All right. I see a couple questions coming up. Given that the debt issue and even their high interest rates, so this is not the other all that is the whole that is we're covering a lot of ground to be too strange.

That's this all this is the high debt. And as you say, at that level, it's to have debt level, low priced is higher than level or price this fall. And that will thus not be possible. To use a metric of health, the velocity must demonstrate that, sure, but that is downstream of the lifting and it's not the action, the supply.

And it's another valuable thing to consider. But at the end of the day should be stop really be changing what it's doing because like changing the amount of debt the extent that recently that's more of a question of like the get the fact the things in over. It's not that I'm not saying that it's a bad metric to use, but for the time being it's better to keep things much simpler.

I know, but in theory, you know, measuring the rate, you know, at the time over which, you know, if things continue being stop, we'll pay off debt. You know, that's not an thing for a to measure, but probably at the most basic level, take for it to measure it isn't cheap. Okay. Well, we were so that's cool. Decreasing the temperature would basically increase the slope.

So the less of a trade off increase in the temperature, more slope, more of a trade. We have one really interesting question is should we do something more or less aggressive at raising the temperature? What is close to a death spiral here? Now? I would argue that the thing to do is to be less aggressive because raising the the the the the temperature puts more force this way, which to me is sort of going with the tide.

The the the thing to do is you're to have to be aggressive and say it's just not going to issue more debt at higher rates. So it should really be, you know, less aggressive and raise your temperature, which is more aggressive, I think, in the grand scheme of things and try to move the directional force this way. So whether that means lowering the temperature and clear, but I definitely don't think increasing the temperature margin and their debt levels is necessarily the most productive, particularly with what we're seeing right now.

For example, as an interesting topic of discussion and precedent sets. But that means I'm going to long, which is also going to be spent lot of this. Sure. But if it's going to issue down an infinite debt interest rate, it's going to collapse. So there's just a tradeoff. And interesting angle as well. Depending on the level of fluidity, maybe you can just incentivize converts that a very address you trade off.

It's just there between the and the field being used for packages. Okay. So given what we know about price debt level and the fact that means I could collapse, what do we want the for supply to sort of like. Right. This is what we want. We want once the force is being applied, this is the new net effect on the system.

But it's a low price and a low debt level sort of naturally comes up slowly when it's at a higher debt level. This is more aggressive and not over. Issuing debt is the cause of high prices. With the debt. Now I'm going to price. I mean, if you really want to prevent it from entering a flood, then that's what transit is worth supposed to be.

All I see lots of chatter and shit. Okay, so before we jump back to the payments response and let's let's see what the gangs that. Okay, causing that, I thought the debt levels used to increase the most in the price is below one. There's action, but there's enough in the system. I'd be like, we already talking about that.

Sorry, this is quotes. This was confusing. All we answered All. All right. Never mind. I don't know. I just want something that I think I lost the screen to lose the screen. I think I've had locked. Yeah. You're just unsure. Sorry. My answer stick capturing how much you don't. There's also the two questions from earlier that you were a weight on all the Lydian and around mirror is this back.

Yes we're going yeah we're going to get to both of these but if I don't get to them I'll probably get to the first one today. And the second one we may have to get to them. Okay. We'll see and approach key people. Here's another two. Absolutely. And perhaps we just ask everyone to see just see the circles looks good, right?

Okay. So what is being stuck actually doing when Delta B is positive? It's voluntary means when a delta be a negative, it's meeting soil. Both times we've got a delta B when the delta B is negative excuse me with the WB is positive, the beans are still made. Some beans be able to measure demand for soil and then it changes the next temperature based on position direction acceleration.

So I'm sure we lost the fair amount of time to understand what in God's name is going on in the charts and the white paper graphics about temperature. But this is basically what it's saying is for given that level and a given position, it should be direction and acceleration in addition to position at that level of price. This just demonstrates our directional acceleration as well as the change in and the chart.

Or alternatively, given the debt level and the price level and price and change demand for soil, what is the conditions? And they're matched up. Now one thing that's very interesting is that based on the study, it makes sense to actually change the maximum temperature change to be more aggressive at lower debt levels. Right. Applying more and more force here to try to get up a price here and take the chance what what the system can't when it has low debt.

Sure do what it can to just get here as opposed to slow rolling it. And then the system can really have a four hour form. So going aggressively with this temperature here and then be less aggressive at raising temperature or you rise right now it is the opposite. It's more aggressive at risk. Damodaran last year, so I need to think about is whether this other future work on this stuff, at how to measure ABC, how to set your lower start.

You not with regards to agency and measuring acceleration of price in addition to, the acceleration of Delta B and the, the acceleration of the system interacts at that level with demand for soil we currently use. we don't do that for price. So should we use some measure of, you know, acceleration or health for price, you know, other than just the position of opportunity, measuring demand for soil is something that's always very complicated.

We didn't talk about that today, but it's covered in the document. how is it? Q And whether there's an opposite natural, opposite of Q is a good topic of discussion. Research for the future something that's come to mind is a metal flood, and the system really won't let the system flow about. Q So don't just automatically sell them.

How we can distribute to people couldn't even and auto as the the liquidity in and sense that LP tokens or deposits it's like a instead of selling out of the system just that you know whereas within the flow the sort of like removes from the system like some sort of like auto compounding flood that that could in essence do.

And you know, I think the most interesting, although difficult, is we have this model for two holes and right now the stock is measuring things with respect, direction, acceleration and that the ideal equilibrium here. But the question is, should I be measuring things? Yeah, sure. We have a tool versus a single point that makes sense, but that's a very complicated discussion.

So that's just that's the current state of the the discussion about this is hot. Maybe it should work like that, but it's okay. So with with all this in mind, this is sort of how bootstrap currently works. All this we just take this analysis that we did in two dimensions and you know the discussion about how it's not responded to and used it to its tools to effect the force in the right way, apply force with the lawnmower, the right way to change position as best as you can.

Yeah, we can use the same strategy to now try to expand things to three dimensions. Now, of course, three dimensions are much harder to visualize. If you give alignment, we can measure visualizing things in one extra dimension. So the shape of the system, a two dimensions, is that this is shown in three dimensions international covenant. Two dimensions. To show three dimensions you would require for dimensions.

This obviously not really visually intuitive. So we're just going to have to use our brains and our imagination for that. So that's what we will do next. I see we have a couple more questions here. If you flip the temperature down some one that caused the interest rate to eventually converge at zero and that's it. So that being said, is solely reliant on converting the hey, well, the temperature would it would at this proposed flip would be in that etc. so raising the temperature, it's just raising the temperature more aggressively at lower down levels and less aggressively at higher down.

But it's still raising the temperature. So it's not saying don't raise the temperature is raising it slow. And then next question, re not raising temp when that level is super high, you have to put some other level like in, I guess there would be an additional incentive to convert. Exac. That's exactly right. So in those cases, perhaps feedstock could more aggressively incentivize converts before it tries to increase the debt level aggressively.

So it now has multiple dimensions of levers on which it can operate. So this is now we can get into, you know, the other two dimensions which feedstocks are operating and you know, how Bienstock responds to. Now, I, you know, just personally, like I said, I could talk about this forever. I think maybe it makes more sense to sort of see a variety of questions now and try to wrap it up at the top of that more before that and then resume this tomorrow and sort of begin the discussion with the price times debt level, two dimensional space, and then reach to the debt level and Sydney as the price and put it in level,

then the debt level, maturity level and then all three of them together in each structures new response to it under the Gage system. And then probably we'll probably need a third day to talk about all the other related stuff and the other issues that are unrelated. So if people are cool in having a third day of class and instead of this going on for another hour and a half, that's probably better.

So if people have questions, feel free to drop them. I'll hang up for a minute or two. And if there are no students, yeah, we can do that, which does resume tomorrow. But obviously there's a lot of content. Maybe tomorrow at the beginning of class, there can be a period of time for people that ask questions when they've reviewed this, then it's a lot for the convert changes.

Look at the generalized convert. There would be I mean, there's a lot of content about that in this document, so feel free to review it is the tab current on to how would you prefer increase at a slower rate than it currently does. Yes the tempest junior high and yes is increasing each of that. So I guess it's one thing that the study clearly demonstrates is that at this point in the day space and raising the temperature is actually counterproductive because it would it would basically point orient the force, the leaf blower more in this direction as opposed to in this direction.

So, yeah, lower temperature, it's definitely a given that there is no demand for soil. So whenever there is research, you know, it's probably going to come in and if it comes in at this rate can come in in the lower probably. So are we nearing a death spiral and

everything is in the eye of the beholder in stock has done pretty well over the past couple months with significant downside price volatility.

And what we would change so unlikely

I see someone still typing so let's see if it put anything in the chat for us to talk about.

then the future world session. That laughing engines attack meetings mechanism. Let's paint menus relative to the two halls. How are they working freely in the shape of things? I guess my question is, how do we find out where the tipping point for all traction when really no.

And I guess the point is like right now everything is like, well, I think compared to ideal equilibrium, what is the direction acceleration, respect to the what? What I was like. Maybe you could say another way of thinking about the same exact information is what is its position, direction, acceleration and respect that you also. And so it's just another way to think about the response.

And if that makes sense, it doesn't nothing really changes percent. It's just another way to think about things.

I guess my question is how do you find out what the tipping points for your charts are in practice? That's it. We get down in practice and our intuition, like the change in, you know, the interest rate necessary between either, you know, a thousand debt level on a 2,000% debt level versus a 0% interest rate and a 100% interest rate.

Hard to see exactly about those changes, but, you know, probably 1,000% above 20%. That system just it has a really high down. The exact interest rate isn't necessarily the most important. Have you thought about ways to add utility to Pod's debt so that there would be a demand for your respective mandate to pay back? Now, having spent too much time on that, having

margin is a buzzword, Could I help then?

Point is any data better use? We don't really have any data for something like this.

Still real typing obviously doesn't make for a great audio content. We want to be respectful of the person typing the question. no they're not. All right so we'll probably rocketeer for today.

same time tomorrow place. I guess the only wrinkle is, you know, they got jury duty tomorrow. So I think what we're going to start is in time. But for this case, I got to start a little bit later, but looking forward to continuing this discussion in two and three dimensions of how people found the software and education on the spam.

Awesome. Thanks, Ben. While trying to post some announcement of how far in the dock we are and our new plan probably having at least a couple more of these over the next couple of days. Thanks. I run. I've got on.