What is a Bean?
- The first Beanstalk stablecoin. One Bean is pegged to the value of one U.S. Dollar.
- Beanstalk is the stablecoin protocol, and the objective of Beanstalk is to create Beans and maintain the price of Bean at a dollar by issuing debt in a sustainable fashion.
What is the utility of Bean?
- Bean can be the most liquid stablecoin. The supply of Beans can meet arbitrary amounts of demand because it is not limited by the amount of available collateral.
- Bean can provide low cost liquidity to various assets and liquidity pools without the excessive borrowing costs of other stables.
- Bean can be used in a way that leverages the composable nature of the Ethereum blockchain. Beanstalk is being developed as a technology and monetary platform which other applications can be built on.
- Thanks to the decentralized nature of Beanstalk and the technology it’s built on, it can provide a much better user experience at a lower cost.
- The goal is for Beanstalk to eventually support a variety of different blockchains, so that you can deposit Beans in the Silo and lend Beans in the field from many different networks.
welcome to the beanpod 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 on with the show if you asked me a year ago like what decentralized finance was i probably wouldn't have been able to give you a very good answer and now here i am a pseudonymous gender neutral legume hosting a podcast about stable coins if anybody else is surprised none of them more than me on this episode of the pod we're going to go on a tour of the farm so to speak publius the founders of beanstalk will be joining us as we talk through all the key components from the beans themselves to pods to stock and then to seeds we'll talk about what they are what they do and how they work together to be a platform for the decentralized economy so that welcome back publius great to have you again how's it going thanks for having us back rex glad we didn't scare you off no not at all always up for good conversation and last time we talked it was very let's say philosophical and theoretical this time let's let's get a little bit more real let's take a tour of the farm and kind of talk people through what we have going on here a little realism goes a long way that's right that's right so let's start with the basics when someone interacts with beanstalk the word that they see more than anything is the word bean could you just talk us through what a bean actually is sure so bean is the beanstalk stable coin or the first beanstalk stable point we should say and one bean it's a bean is an erc20 token uh one bean is pegged to the value of one u.s dollar and so being is in practice the uh the main currency through which uh most things in beanstalk uh happen and beanstalk is the protocol the stablecoin protocol and the objective of beanstalk is to create beans and maintain the price of a bean at a dollar by issuing debt um and doing so in a sustainable fashion so beanstalk is the protocol bean is the stablecoin token pegged to a dollar so to think back about the first episode for just a second one of the things we talked about was utility and when i think about what a bean is really in my mind the the function of that being is to provide that utility for the myriad of potential solutions that decentralized finance has to offer is that that what goes through your mind yeah maybe the the best way to think about it is that bean can be the most liquid stable coin and that the fact that it's not uh backed by collateral it's unlimited by the amount of available collateral means that the supply of beans can meet uh arbitrary amounts of demand and so when you talk about where utility what where what does that actually look like in this case the vast majority of uh liquidity at the moment if you're trading against a stable coin with borrowing costs of 10 or 12 in practice your token price is paying that cost because the opportunity cost for providing liquidity to your pool uh has to be judged against the borrowing costs you could you could basically receive for lending that currency out elsewhere and so in practice there's just in terms of trading we talk about as a medium of exchange uh the one of the first places we're hopefully going to see bean uh make an impact within d5 is by providing super low cost liquidity to various different assets and liquidity pools yeah so when when i talk with folks about the protocol and the goals and i talk about being in particular the actual the coin itself what what i talk about is the idea and i think i might have said it the last episode the idea that someday you could buy a soccer ball with bean and that is a it's a unique opportunity especially when you compare to to other cryptocurrencies like bitcoin the it's probably the easiest example for a couple reasons one is that it's so well known and the other is that it's the value is so um both growing and fluctuating so so variable the thought of buying a 32 soccer ball with bitcoin is it's it's almost impossible to wrap your mind around knowing that because of bitcoin's variability and value that you could be dealing with an extreme risk even in small transactions in the sense that you know the the value of the currency that you're using to buy your soccer ball could change drastically even over the short period of transactions happening and so bean because of its liquidity and its stability sets other systems up for practical use long term and as we'll talk about later on in a very scalable way yeah and maybe you were setting us up there and we we originally missed it which is you're exactly right beanstalk is constructed in a way where being can really be used in a way that really leverages the composable nature of the ethereum blockchain and so when we think about what are all the cool things that you could maybe uh build on top of beanstalk or build using bean you know when the iphone came out if you had said well soon enough you're going to be opening up your iphone and calling a stranger and within two minutes a stranger is going to come pick you up in their toyota and you'd be like what that's ridiculous why would what who do they do they work for somebody no they're just self-employed they just show up they have a phone too and the phones talk and they show up and they pick you up it'd be like what so ultimately who knows what's going to get built on top of being stuck but the idea is when you have a well-designed core right when you have something like the the the iphone which uh radically changed both what you could do and how you could do it both and did so in a way that was incredibly symbiotic what gets built on top of ios on top of that platform is infinite and so in the same way the goal is to and be in stock farms is developing beanstalk in this way and taking advantage of the fact that beanstalk has now been alive for seven months and uh now that the as you said the peg stability is is is doing pretty well uh attention can be more focused on creating that harmony between a really seamless user experience with a core protocol that has a lot of meat to it and doing it in a way that facilitates a ton of innovation on top of it and uh we would just say unlike the iphone which in the early days you'd want to get your hands on a jailbroken iphone because you could do all sorts of other cool on top of it beanstalk is is open source and the bean down money user interface in the not too distant future is going to be open sourced and there's going to be an open source middleware suite to support interacting with beanstalk in a really light fashion that doesn't require super technical know-how about the inner workings of the protocol and the idea is to create a platform uh both uh a technology platform and a monetary platform that uh allows for all sorts of different amazing things to be on top of it and beanstalk will just be one of the core layers yeah so i'm gonna i'm gonna foreshadow for just a second um so we're gonna talk a little bit about the pod marketplace and when we get to that that that should be a really good example of exactly that that ability to build on top of beanstalk as you know foundational component that that has functionality built on top of it but before we get too far down the road as you're talking there about um using the iphone and having people pick you up all i could think of was you know being a you know a 10 year old and my mom telling me to not talk to strangers on the internet and now here we are in 2022 and i was just having my just having a conversation with my parents about you know the vacation that we're going to take here in a couple months and them getting an uber and oh hey by the way not only are you you going to talk to a stranger on the internet they're going to have you they're going to come and they're going to pick you up in their toyota camry and they're going to drive you from the orlando airport so just so you're ready for all that and and it's it's commonplace it's it's not not a big deal now it's just it's how we do things and after the fact you almost can't imagine it doing it any other way right it's like the new york taxi system and the medallions you're like wow what an outdated system right thank god someone invented technology that came in and totally disrupted this rent-seeking institutionalized business with a grip on the regulators like that's the goal of tech well-designed technology maybe not the goal but that's certainly the outcome and in the case of beanstalk that's also the goal that's why decentralized tech has a real future because both from the perspective that if you're uber uber has all these employees i don't know how many they have but presumably uh thousands and thousands of employees and whereas decentralized tax sure there's some maintenance costs but ultimately uh other than the whatever the natural rate of emissions are for your given protocol to sustain itself and in the case of beanstalk that's a hundred beans an hour uh to to fund the the sunrise function call uh all those excess costs are rent that gets passed on to the customers and so you combine the fact that you have these centralized companies passing on all these uh excess costs to the customers within you have the regulator stepping in and adding further frictions and making it difficult the the decentralized versions of things are ultimately going to provide such a better user experience and at a much lower cost and ethereum today has a high level of friction around it and high transaction costs um you know beanstalk was originally deployed on the ethereum main network because that's where the vast majority of demand for stable coins are at the moment uh in the same way that being is paid to the dollar uh because the vast majority of stable coin demand is for dollar peg stable coins but the goal is ultimately for beanstalk to uh support a wide variety of different blockchains and people will be able to uh hopefully deposit beans in the silo and lend beans in the field uh on a variety of different block chains and so uh when we think about uh like the race to zero uh in terms of fees uh beanstalk hopes to be a driving force in that race to zero