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S1E21: Pod Marketplace V2

Date
October 12, 2022
Timestamps
ā€¢ 0:00 Intro ā€¢ 2:55 Malteasy Introduction ā€¢ 8:55 Community Development of Beanstalk ā€¢ 15:19 The Pod Marketplace ā€¢ 29:14 Pod Marketplace V2
Type
The Bean Pod

Recordings

Transcript

welcome to the bean pod a podcast about decentralized finance and the Beanstalk protocol I'm your host Rex before we get started we always want to remind everyone that on this podcast we are very optimistic about decentralized Finance in general and Beanstalk in particular with that being said three things first always do your own research before you invest in anything especially what we talk about here on the show second while you're doing that research try to find as many well-developed opposing viewpoints as possible to get the best overall picture and Third never ever invest money that you can't afford to lose or at least be without for a while and with that those of you familiar with Beanstalk will know that the method by which Bean Finds Its price and returns to Peg is theoretically straightforward basically when demand and therefore price is high Beanstalk produces more beans to meet that demand and lower price when demand and price are low Beanstalk increases incentives for participants to reduce the bean Supply by lending them to the protocol which brings the price of being back up the instruments that beanstock uses for Lending are called pods after they're created pods like beans can be traded bought and sold but Beanstalk didn't originally have a platform to make these transactions happen folks began buying and selling pods in the Discord server but the process was clunky and the risk of fraud was real in short pods needed a system for Price Discovery and Market clearance in response a small team of our community members developed the Pod Marketplace working alongside our core development team this group created a platform where users could list the number of PODS they were willing to sell where they were in the Pod line how much they would be willing to sell them for Etc potential buyers could search the listings and if all the pieces fit snatch the listed pods up then from the other side potential buyers could lay out the terms under which they'd be interested in buying pods and if a seller saw terms they liked they could fill the order the system became popular especially for people who didn't want to wait until their pods matured it was also popular with folks who wanted to flip pods kind of like someone could flip a house buying it and then reselling it for a profit down the road the first version of the Pod Marketplace was a huge success with millions of dollars in transactions taking place since Inception version 2 which is slated for release in November has a particularly exciting feature upgrade and one of the key V2 developers known as Maltese is with us today Maltese welcome to the podcast thank you Rex great to be here Maltese how about you just give us a little bit of your background and how you became aware of Beanstalk and how you got involved with the project and how you got to to this point yeah sure um yeah so I I kind of got into the whole crypto scene early last year like January of of last year and the way I kind of got into crypto was through this new uh blockchain social media platform called bitcloud at the time not sure if any of you guys have heard of it um but the founder of that of that platform um who goes by the pseudonym uh Diamond hands was actually also the founder of this uh stable coin algorithmic stable coin implementation called basis protocol and so I kind of like got interested in the whole like algorithmic stable coin like area like very sub area of cryptocurrency like kind of early on last year after learning about bitcloud and learning about the founder of big cloud and his background but at this point Beanstalk still didn't exist obviously um so what I was doing um after that was I was basically like running um kind of this centralized uh cryptocurrency exchange um where where we were the first off-ramp essentially for the bitcloud platform and we were off ramping on the bitcloud native currency which was called clout um onto ethereum and uh this project it started off essentially like as a as a hackathon project that me and my my best friend were were working on and it started off like super super well um like we were getting a ton of liquidity a ton of like daily transaction volumes but um at that point like my understanding of like the whole security landscape because I was like a technical founder and I was pretty much um like building all of the back end like myself and having like not a ton of like prior knowledge and experience like Building Systems like that um I wasn't like aware of all of the vulnerabilities that could be possible and we got we got exploited for like a considerable amount of money that we had that we lost and after that point um we kind of had to wind everything down and and and kind of like I was just beginning to get exposed um to the whole crypto landscape as a whole and around this time was when I learned about Olympus Dao so you guys have definitely heard about Olympics yeah so I was a three three year I was a homie back in the day yeah and at that point on like the concept of of Dao's just became super interesting to me um although I never contributed to Olympus um that was like definitely one of my early exposures to the whole like decentralized autonomous world and after that point one of my friends that actually introduced me to Olympus who is also a fellow fellow Omi um kind of like started talking to me about Beanstalk early on um like during September uh of of the same year and I I didn't understand Beanstalk like a crazy amount at first I was just very amused I guess by the the bean Farm taxonomy yeah but I hadn't like looked into it a ton until probably later on in the year when I kind of just started to read the white paper and look into the tech that Beanstalk was using and at this point I was also like learning solidity myself so I was just kind of looking for projects to work on and I I just reached out to Publius and uh kind of like other members of the Beanstalk Community like Bean joyer for example who was the uh developer for the smart contracts for uh the Pod Marketplace P1 and yeah Publius and bean joyer um kind of you know really introduced me to the Beanstalk code base and I got involved in a couple small projects um within Beanstalk at that point until we started to like brainstorm about what pod Marketplace V2 could look like um kind of near the start of this year like probably around February and I've been just working on pod Marketplace V2 like independently mostly independently with a lot of like brainstorming and like ideas back and forth with uh bean joyer and bublius and they've been like incredibly incredibly helpful especially because I was I was so I was like definitely a solidity Noob when I started out um writing the V2 of the marketplace and I I think I had to go through like three or four major like rewrites of it um throughout the the course of this year until we we reached the point we are at today love it and that's great uh so something that I want to kind of focus on and make sure to highlight is um that you know this is a community developed project so you know Beanstalk has its team of devs that are like kind of that part of that Core group but both V1 and V2 the Pod Marketplace are things that you know members of our community you know yourself obviously and you mentioned Bean joyer it has said okay there's a there's an opportunity here there's a use case here for this particular set of functions we think we can take this on and you know like you said working closely with Publius have made things happen on top of Beanstalk already and I think of the Pod Marketplace as the first um Can a unique set of additional functionality laid on top of Beanstalk that wasn't from the dev team specifically is that is that correct yeah so I'm not a I'm not totally sure if it's the only aspect of the bean farm that was like kind of developed by the community but I know that it was definitely one of those things that was like super super influenced by like how active of a community Beanstalk actually had managed to to Foster and I think that's like probably one of my my favorite parts of being a bean farmer is like the the crazy community that we have indeed yeah folks that are constantly looking at both the the protocol itself the technical components the economic and financial components and the community community components and saying okay what can we do to make this better and you know part of that is is so consider making suggestions or developing ideas and then there I mean there are other groups of folks now that I mean there's really a growing list of let's say somewhat independent contributors some of whom have become more part of the the core team you know I I think of tbic um you know who really started out just kind of doing independent data analysis and now is has kind of made his way onto the team you know like there are just so many stories of folks that just said I believe in this project I think there are some really good things happening here now what can I do how can I contribute in a way that makes this move forward or work better yeah yeah absolutely and I'd say that I was I was probably one of those people that was really drawn in by like how strong of like an ethos that um I think Publius in the community really fostered around Beanstalk and like just how um sound like the overall um like vision of Beanstalk as a protocol seemed um even if at the time like I didn't um like even even before I fully like kind of got myself into the Beanstalk like culture and like the Beanstalk like ecosystem I was already like kind of um like you could say impressed by like like the kind of activity Beanstalk had going on around it at least in comparison to like some other projects or like other protocols that I've seen in the past like I was really thinking that Beanstalk was one of a kind in a sense yeah I agree and I I would say having a very different background but still seeing you know that similar ethos is really what pulled me in as well you know just saying there are a lot of smart people around here that have very good ideas and that have a genuine desire to see this succeed I mean you know I think I think most folks involved in any project in crypto right now be lying to themselves that they didn't say that there was some aspect of this that you know that was Financial but at the same time to have a group of people that say you know we've see really interesting way of changing how economic systems work there may be a better way to do this through this very unique concept of you know credit based algorithmic stable coins uh I feel like that set the stage for a lot of our really most valuable contributors you know either formally you know through technical contribution or thought contributors or you know business development the wide range you know folks that got involved in the project really see that that ethos of Beanstalk yeah yeah definitely and like the the scope of the problem um that Beanstalk is like trying to solve um like creating a completely decentralized stable coin like that in itself is is like really huge to me at least because like it's a pretty ambitious goal like very ambitious goal I should say of like creating uh better monetary system like in general for like the whole world um like having something that's resistant to not just centralized control but also like you know all the bad things that come with it like hyperinflation creating something that's like more stable more robust than the current monetary system I think that that um ambitious goal that Beanstalk has as a stable coin is is kind of what makes me always like very excited to not just be part of the community but like to work on Beanstalk and like think about problems within Beanstalk and I'm sure it's a big factor for a lot of people indeed so to kind of set the stage for our conversation how would you just talk to us a little bit about the Pod Marketplace itself like what is it why is it important what specific function does it offer to people that are participating in Beanstalk yeah so uh the Pod Marketplace uh right now is basically a decentralized way to exchange pods which as we all know is the native debt asset that Beanstalk has and the reason the that pod that the Pod Marketplace was introduced is kind of to facilitate like more liquidity around pods and to find like a better process for for Price Discovery around the debt asset um and we we felt like it was a pretty important step in the evolution of Beanstalk as a protocol to bring as much utility as we could around pods and pod Marketplace is definitely something that adds a lot of utility and added benefit to pods aside from just being the native debt asset so I feel like the the Pod Marketplace is almost a formalization in certain ways of things were happening like in Discord and through DMs like people were starting you know Beanstalk started to ramp up and the Pod line started to grow it seemed like folks were reaching out to each other saying hey you know I've got 20 000 Pods at this space in line is anybody interested in buying the minimum it seems like the Pod Marketplace was a way to start to formalize that correct yeah essentially so now basically instead of you know requiring like some sort of party that you have to trust in order to proceed with your exchange of PODS you can just do it in a trustless way through the Pod Marketplace so it's a it's a great benefit and now I mean the as the pod Marketplace has evolved I mean I feel like the real early versions were were very simple essentially just a listing service and then eventually the um the UI started to get built out and and we started to see the uh the the graph screen get built to offer some visualization as it's happening more transactions are happening as well and and people are starting to utilize a service the it seems like now we're in a in a place where individuals have the ability to to do a couple functions and they can list pods that they're interested in selling you can also list um a desire to purchase correct yeah um exactly so right now you can actually create pod listings so that's essentially when you're you want to sell a plot that you own for a certain price and you can also specify a minimum place in line that the Pod listing will sell at so if for example you have a listing at 10 million place online and you you don't want that listing to be active anymore after it gets to let's say 9 million the listing will just expire it will become essentially inactive after that and there's also pod orders where you can create essentially a bid to ask for Pods at a specific price point I should note that this is that main limitation with the Pod marketplace right now is that the price that you set your listings to sell at and the price that you set your orders to buy at is a static single price for the entirety of the the Pod line which is kind of a limitation because um so because the Pod line is something that kind of carries value with it at carries a different value at different places in the Pod line you ideally want to have a way of specifying a variety or a set of prices that you would buy it for example for a pod order rather than a single static price yeah so if I if I've got pods that I'm looking to sell I know that as the Pod line continues to churn the theoretical value of those pods changes they theoretically become worth more as they get closer to the front of the line and so what you're saying is they're you know we there's functionality around trying to manage this problem of the change in value of PODS over time right yeah exactly so if you had a pod listing um that was statically priced and it moved up in the Pod line you'd you'd ideally as you said you'd want to change the value of those pods and you'd want that to be reflected in the Pod listing um so to do that right now you basically have to first of all cancel the Pod listing and then create a new one which is just two on-chain transactions that you know carry with it um gas costs of the ethereum ethereum network and the friction of actually having to do those actions and and that's that's kind of like the main friction the the main point of friction that um we wanted to address um in respect to pod listings and for pod orders it's a it's a it's slightly different um because you're essentially asking to buy pods from like a whole range like you can specify um the maximum place in line which your pod order is willing to buy Pods at and um you can also specify a single a single price per pot for that entire pod range now let's say you wanted to buy Pods at a multitude of different places in line across the Pod line and let's say you you wanted to assign a different value to each of those places in the Pod line you'd essentially have to create a set of orders like a multitude of orders and you'd have to lock in beans into each of those individual orders which is I would say like an even bigger point of friction because you're essentially locking away liquidity and having to you know create more more than a single transactions to to do what should essentially be done in a single transaction gotcha so now managing that is that part of V2 or is that a function of version one yeah so um in V2 what we're proposing is essentially making the price per pod um as a function of the place in the Pod line that that individual pod is at um so if you were to create a bid so if you're trying to create a pod order you could essentially Define a curve so a pricing curve that um you'd pay you'd pay um so the order would pay for pods according to what the price is defined to be at the place of lot at the place in line that the order is being filled at according to the pricing curve yeah yeah so as as the the place as the pods move in line theoretically they would change the value of that that that pause value would change in conjunction with its place in line along the curve correct exactly yes all right so that's it's a more Dynamic pricing function with a little bit a little bit greater um let's say uh more precise control by the seller or buyer yeah exactly and you can also actually make it as precise or as general as you please because um the way we're implementing these pricing functions is uh through piecewise polynomials and you can basically have unlimited or an infinite amount of pieces in the polynomial pricing function that you define um and this is kind of like a kind of a topic but you can actually use like piecewise polynomials to approximate like any type of function in general so having like a theoretically unlimited amount of pieces that you can describe the polynomial in is is is pretty powerful in my opinion because you can almost have an infinitely customizable pricing function and you're not really Limited um because of the fact that it's only polynomial so from a user standpoint how does that and I don't want to get too far because I know that everything's still under development like how would that work out for for me you know I am uh I'm let's say a mid-level user feel pretty comfortable with the Pod Marketplace this enhanced functionality I mean is it something that um you said you I could have as as fine tune a control or or as general control as I want how does that work out from a functionality standpoint yeah so what we're kind of thinking about right now this is still in the in the works as you said um but essentially what I'm imagining it to look like is you're gonna be able to um Define a set of data points and these data points would basically correlate to the the amount of beans you're willing to pay per pod so that being denominated value per POD at specific places in the line and on the front end we'd essentially have an algorithm running something called like piecewise polynomial cubic hermit splines um so it's like a kind of complicated um computer Graphics algorithm that we would use to essentially interpolate all these different data points that you enter and create like a smooth pricing curve based based on the points that you enter and this would only be like an option obviously you'd be able to manually enter the polynomial that you'd want to use for your pricing function as well um but this was something that we we thought would be a cool way to implement it on the UI right and and a way to visualize this would be kind of I don't know if you've ever seen like um the color the color balance curves on like Photoshop or other like photo editing software where you can like kind of like move move the curve up and down and like add new points to change like the different color levels in the picture so but yeah that kind of an interpolation of of those different data points is like what the p-chip algorithm actually looks like that's really interesting it sounds like it sounds like it will provide optionality for a wide range of users um you know I know that I mean again when I think of myself I you know I'm I'm familiar with the functionality know the goals of the Pod Marketplace but like that level of precision is beyond something that I would use but it's really exciting to hear that like folks that that will have really high level analysis that they'll either be TR they'll be trying to utilize or really specific goals they'll be trying to meet will have that that fine-tuned capability yeah definitely and that's one of the reasons why it was like super exciting for me um to work on this project as well um like I'm I'm as you would say like a pretty mid-level user um yeah pretty pretty familiar with the Pod Marketplace and and kind of it's very clear to me like how adding pricing curves um would definitely help my use case but maybe I'm not the user that I would take necessarily full advantage of all the functionality that it actually provides and so I'm just really excited to see like um what kind of like really complex analysis people can do to actually create like um these pricing curves that have essentially like um infinite possibilities so when it comes to V2 how would you just give us an overview of some of the main components you've talked about the pricing curve a little bit uh give us more of a broad picture if you would yeah so so V2 is actually it's going to be very similar to V1 except the change that we're making is the addition of dynamic pricing so this is this is actually like completely irrespective of the UI changes I'm not able to say like exactly what it's going to look like but at least for the component that I've been working on um the the main change that we've made is that price per pod for pod orders and pod listings is no longer static and instead it's been made into a function of the place in the pot line um so I can just quickly quickly go over um how pod orders and pod listings will work so yeah so one of V2 listing is filled um the price per pod will basically be calculated dynamically as a function of the place in line at the start of the listing so people will essentially no longer have to cancel and re-list their listings if they want to update the price because the price will already be defined at all of the different places in line that that plot could potentially be at on the pricing curve and when that listing gets filled it'll just be calculated as a function of the place and lie it works slightly differently for orders so if you're creating an order basically asking or no creating a bid for pods um the price per pod that that order pays for is actually calculated as um is as by an integration essentially of the price function from the place and line of the start of the fill to the end of the fill so that is each infinitesimally small pod that that order is filling for it will have a unique um price associated with it according to the the pricing curve and the the order will basically fill for the sum of the value of all of those pods so with the Pod Marketplace V2 starting to come to fruition first of all could you kind of give us just a little bit of information about where that is in terms of its development and then what you're seeing out in the future yeah for sure so um we gave the smart contracts to halborn a couple weeks ago and they they've been working on getting that all audited hopefully that'll be ready for bip 28 and uh in probably around a month or so um but I can't say exactly when it'll be ready because it's obviously pretty um dependent on the state of what the front end looks like so it might take a little bit longer maybe closer to two months but it is definitely um is definitely uh coming upon us soon that's great and then what what do you see further out I mean are there any other projects that you're looking at or problems that you're looking to to potentially tackle in the future yeah so I was actually like kind of interested in in on-chain governance for a little bit ever since I guess the Beanstalk got exploited because of our on-train on-chain governance um I haven't been looking into it too much recently but um if if there was something I I would be interested in working on like that would be the first thing um that comes to my head um just exploring like a new strategy for on-chain governance for Beanstalk moving forward yeah that's fantastic I mean I know that's been a part of a lot of conversations you know really since the exploit is doesn't make sense to look in how we manage governance taking governance off chain I know was a painful thing you know for the for the core team and there's a desire to get that back on chain as soon as possible so it sounds like a fascinating problem to address yeah definitely and it's something that I think is really important because the whole ethos of you know decentralization is pretty contingent on on-chain governance yeah I completely agreed so as a user if I'm looking to put up listings or bipods on the marketplace for v2 so how does that improve functionality change my general experience yeah so now if you're uh if you're a person who's gonna go out and make a bid for pods instead of having to potentially create a bunch of different pod orders for various prices you can just go ahead create a single order and it'll be able to cover a pricing curve that covers the entire range of pods that you're willing to buy from and the way that you can Define this pricing curve um is is quite simple in essence you can just create a small data set of price points so for example like let's say you have a price point that says that 10 million place in line you're willing to buy pods for like 0.5 bdv and let's say at 50 million place in line you're willing to buy Pods at 0.4 bdv and then 100 million it's at 0.3 bdv um so you'd basically be able to enter in a set of different price points like that and um our UI would essentially generate a function that interpolates all of those different prices to get like a satisfactory pricing curve and this this would be like customizable to some degree um like whether if you wanted to interpolate it using like cubic polynomials or just linear functions or if you have a completely different interpolation algorithm you want to use you could do that as well um and then you would basically be able to create that pricing function and upload your pricing function as part of your order or listing and it just makes the entire process of finding the correct price for Pods at each place in line like far easier because if you think about it now each pod order or each pod listing is defining like prices for a huge range of PODS rather than just a single price and a single like place in line um so now you have access to a ton of data to like look across and kind of compare your pricing curve to other people's pricing curves and like even just like sell into an order that already exists and like sell into a pricing curve that looks most appealing to you um and overall the friction of the Pod Marketplace would hopefully just be significantly uh reduced and essentially Aid in like the the price discovery of PODS um as an asset so if I was looking to create an order and and said well you know I'm willing to buy a certain number of Pods at a particular bdv through this more complex system I would be able to establish those requirements for filling my order in a more precise way and it would create essentially like Finish Lines for a set of PODS to cross as am I understanding that correctly so I guess as a particular set of PODS is is available on the marketplace and it and it moves through a pricing curve towards being harvested is this with this functionality allow those two that that order bandwidth or that that set of order parameters to converge with the with the dynamic curve along which a set of PODS moves yeah yeah actually that's that's really exciting um to think about and you're absolutely right like you could have listing and Order curves that like converge with each other and kind of just like um fill with each other like automatically like as a listing might move into the acceptable um a place in line that the order is willing to buy from and if the pricing curve of that listing aligns with the pricing curve of that order then that's a scenario where you know like you could just uh complete that Exchange man I'm glad you understood what I was saying because it made sense in my head but I'm thinking oh my gosh there's a chance that I could say this and it could be like yeah that doesn't make any sense whatsoever but good that's because that's exactly what what went through my mind I like I am very much a I I prefer those like set it and forget it yeah yes and like this that's what as as you explain this functionality to me that's what goes through my mind is like if I've got a really good understanding of yeah an acceptable band for for bdv or you know whatever that order might be and I've got a good understanding of what pricing curves will move through that acceptable space and how long it may take that is extremely valuable yeah definitely like I'm not exactly sure how the auto auto clearing might work but like in like ideally there would even be something that would like kind of Auto Clear um all the orders and listings in the market that would like line up with each other because right now like the process is that like a user needs to go in and manually fill the orders or listings um but maybe there's also um kind of an optimization for that you could that you could build where it just kind of Auto clears I'm not totally sure but yeah hey maybe that's V3 you never know yeah maybe 2.1 we'll see that's right yeah that's right this has been great I mean really like I I really appreciate your time I appreciate you talking through this um I've learned a ton as I usually do uh thank you for joining us Maltese yeah of course no problem it was uh great being here man you can find Maltese in the Beanstalk Discord and version two of the Pod Marketplace when it hits the Beanstalk site in November The Beam part is a production of Beanstalk Farms a decentralized autonomous organization you can find us on Twitter Instagram medium Discord and our home on the web at VDOT money you can also find me on Twitter at rextheby and as a final reminder this podcast is not Financial advice thanks again for listening thank you