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Transcript

foreign back to episode 125 of the block Runner podcast I'm your host William always here with your co-host Iman what's going on man all right we got a new special guest here with us he is one of the three one of three co-founders of Beanstalk his name is Publius welcome Publius well I'm one third of Publius but yes correct pleasure to be here yeah I appreciate it yeah Publius I guess you were kind of uh making it synonymous too like the term Anonymous family and it's like a term for an organization right or as Publius have like an actual definitive definition like it's a three-pronged crew like or is that just like a name you guys came up with for yourselves as Founders or of the project so originally when we deployed Beanstalk we were totally Anonymous and so nobody knew whether there was one of us whether there was 10 of us yeah uh beam stock was simply deployed by Publius now after the exploit in April uh everyone thought that Publius exploited Beanstalk right we were really committed to the anonymity so uh or the student we were Anonymous but we were going under the pseudonym of Publius and so we we ultimately in order to keep working on Beanstalk we decided to dox ourselves and so now people know that there are three of us but we still go buy Publius and uh or at least when we're dealing with Beanstalk uh and in particular the reason why we do that is uh the goal is at some point to have Beanstalk not be Reliant or dependent on in any way be uh Publius and we feel like if we start to participate in in the capacity that we currently do as individuals that will make uh retiring Publius or killing Publius if you want to be less uh ceremonious about it uh you're less peaceful about it uh whenever that's gonna happen it's going to be a lot harder to do that if we've been interacting uh with Beanstalk in the community as our our individual selves so we've continued just by being docs and people now know who we are we continue to act as Publius with the uh the transparent intention to one day uh retire Publius whenever being stuck is at a place where it really doesn't need uh any additional guidance in our opinion sure no what's what's interesting was um we did a a video on stable coins and we were talking about specifically about tornado cash and we've been uh watching some of your podcasts have you done in the past before with other podcasters and we gotta say we looked at your white paper and we're really impressed right the the structure of how you guys have designed your decentralized stable coin was very interesting and very different than probably anything that we've ever seen right yeah I guess can we briefly go over that just for anybody who doesn't understand because everybody knows about stable coins now because I guess the great Terra Luna thing was a big uh public uh you know exposure I guess to what it is these stable coins are and there's different I guess uh different models that are being leveraged and I think yours is the first attempt is it not of like a credit based system a little bit more uh algorithmically backed not so much collaterally uh you know collateral isn't the main mechanism as far as like ensuring the stability right so can you go into a little bit more detail just for people who don't understand like what it is that makes these cryptocurrencies stable and pegged to the value of a dollar how does that work so uh Beanstalk can take the credit of being the first uh credit-backed stable coin okay attempt but it it is potentially uh the first credit back stable coin that uh has worked for any non-zero period of time if that makes sense or or any any not in significant periods of time so at this point being stock uh being stocked was deployed a little over a year ago it was obviously off for uh like four months but Beanstalk has at this point been on for on for over nine months collectively maybe almost 10 months I don't know exactly at this point uh whereas previous attempts at uh credit based stable coin protocols lasted uh days or weeks uh prior prior prior attempts so in the white paper uh which we appreciate your kind words uh the the only stablecoin protocol that is referenced is empty set dollar and it's cited in the previous work section and empty set dollar was an attempt at a uh a a credit based stable coin but there were a number of problems with uh ESD that's the uh the ticker for empty set dollar uh there were a number of problems with esd's model both on what in Beanstalk is The Silo uh and the field so both on the depositor side and the Dow and on the lender side the credit side so there were a number of problems that being stocked uh has made significant improvements on but it wasn't the first credit uh attempt so we we can't take any credit on that front but being stocked certainly uh at this point is the longest running credit based stablecoin implementation yeah and that's saying a lot I mean I remember in our previous video I man we were talking about how in tornado cash um usdc and tether were being sanctioned um or not sanctioned but um censored and um and and so we were talking if you remember how it's like if if usdc if we can't really trust usdc to be an actual cryptocurrency where it's completely decentralized like where do you know where do we go to right is it die dies back by usdc and it's like we're kind of confused as to like where do we exit in a way where we're not exposed to like the censorship and so we we ended up being um like do we go back to Fiat and so we published that video and uh someone in your community commented on on one of our Twitter about the video itself it was like hey you guys need to you know meet the guys from Beanstalk and so that's how we got connected I don't know if you got that story from our connection there but that's how it makes a lot of sense because I was going to ask what the main motivation I guess to making as much of a decentralized product is possible you know obviously that's that's the ethos of web3 overall but I guess in the stable coin sector like what are the potential ramifications if we can't figure out like a way where D5 can create these stable products like independent of what you're talking about like some sort of centralized action or actors within the ecosystem right because as we've seen that can definitely backfire it has a lot of downside risks and we might now be able to build like an essentialized Financial system without this so is that your main motivation behind this or what are your thoughts I guess expanding on that so the short answer is yes uh if you're a business building on top of or that wants to build on top of a decentralized financial stack where there's no points of censorship or potential censorship or centralization in your entire Financial stack not just your Tech staff but your your monetary staff that you're interacting with and trading with other businesses uh if if you have any point in that stack where there's censorship potential or centralization uh that leads to the potential for censorship uh it's kind of a least common denominator problem and uh the results right now the situation in defy uh is that you have lots of different derivatives and Primitives money markets cdps dexes you have a lot of core tools that businesses would need the ability to borrow uh uh and lend the ability to buy and sell uh the fungible and non-fungible goods uh there's there's a lot that you can already do from a financial perspective uh in theory but in practice nobody's doing it and the question is why well why isn't anyone using any of this tech for real when we say anyone there's obviously speculation and activity on chain but there are no businesses actually saying we're building on a decentralized tech stack and a financial stack because it makes sense for us to financially right and in a capitalist system the the competitive advantages between businesses are really what makes the difference and so the question is well why why is it that business is building on decentralized Primitives can't compete with businesses on centralized ones our thesis was at the time we started working on Beanstalk and remains that the high carrying costs on stable coins makes it impossible for businesses building on decentralized Primitives to compete with those building on on centralized ones and in particular the high carrying costs on stable coins comes from the opportunity cost associated with collateral requirements so if you need to lock up all this collateral there's some opportunity costs associated with it so the people that are minting it now want to lend it out for some minimum rate where for them it's relatively risk-free particularly if they're doing it on something like Ave where there's minimal risk for the lenders and they they then collect some sort of uh some carry on this this collateral that they have but as a as a business that just wants to use the collateral uh or excuse me use the stable coin it's very expensive because the people that are creating the stable coins that have the collateral they need some sort of minimum uh rate of return as a result of the opportunity cost and in short the high carrying costs on on chain stable coins independent if we haven't even spoken about uh centralized liquidity versus decentralized liquidity right if you say well we're only going to use decentralized liquidity like liquid he has now you have an even more tighter uh uh squeezed on available collateral because there's very little on chain decentralized collateral so you either have to have somewhat centralized collateral where you have a custodian for off-train value or if you're limited to on-train Value there's very little collateral so if the the again if the goal is to facilitate the adoption of decentralized Financial finance Tech stack the problem seems to be collateral requirements and businesses businesses clearly don't want something that's as volatile as Bitcoin or ethereum particularly to denominate obligations right it's very hard to make long-term Investments and loans and borrow money denominated in something that's going to go up and down significantly over time there's value and stability there's demand for stability so once you have demand for stability now it's a question of carrying costs and if your your stable coins on chain have orders of magnitude higher carrying costs than dollars off chain uh businesses building on chain are just not going to be able to compete that's the core thesis and again it's because of collateral issues so the the thought is that there is a real a real need for a non-collateralized stable coin implementation and what that exactly looks like it remains I think an open question from the Market's perspective but Beanstalk is an attempt at implementing a non-collateralized stable coin uh through uh the creation of credit and in particular through the through the creation of uh beanstalk's credit so what does that mean so uh if you have a non-collateralized stable coin there's an easy problem or an easier problem and a harder problem the easier problem is what to do when the price is too high the protocol can always Mint new stable coins so you increase the supply at some point you'll expect the price to come down that's a little easier the harder thing is what what to do when the price is too low when there's an excess of Supply so uh when we say that Beanstalk is a credit based stablecoin protocol what that means is anytime the price is too low being stock tries to borrow from the Open Market in particular borrow beams and issue debt and so as long as the market views Beanstalk as credit worthy as long as the market continues to lend to Beanstalk over time being stocks should be able to return the bean price to whatever it's pegged to now Beanstalk doesn't make any guarantees about the short-term uh price of a being the bean stock stable coin there's no convertibility for example that's one of the major differences between a system like Tara and a system like in stock there's no hard pay there's no Beanstalk oscillates the price above and below a dollar and if the Mark if they're Market participants that want to sell at 50 cents there's nothing Beanstalk can do to stop it and it recognizes that and similarly if people want to buy it two dollars as has happened both both situations have happened people have sold beans at 50 cents and bought beans to two dollars uh not the most rational Behavior per se uh right to interact with a stablecoin protocol uh not to give Financial advice but selling at 50 cents but particularly if you look at at the wall of History a lot of the people that sold the 50 cents also bought it two dollars so buy two dollars to sell 50 cents not the best trade uh but but the concept is Beanstalk can't make any sort of uh hard guarantees about the short-term value or even the long-term value of it being all it can try to do is oscillate the bean price above and below a dollar uh which is currently the pack of a bean and the more that it oscillates the bean price above and below a dollar the more that market participants uh are expected to start to trade the price closer to a dollar right so originally if and this is actually what seems to have been uh played out so far in beanstalk's relatively brief history whereas we're we're early on uh there was a lot of volatility the price went as high as four dollars as low as 24 cents uh it took a a month plus for the price to really return back to a dollar uh in Earnest and start to oscillate above and below Peg again but once it did people started to trade it a little bit closer to the pen so the next time it went through a big growth cycle uh it only went up to a dollar and fifty cents I don't remember exactly what it was but it wasn't four dollars and it only went as low as 75 cents I don't remember exactly either but uh the point is it was much less volatility because people had seen well uh last time that's what happened so now there's some sort of condensation because the protocol has uh uh uh oscillated the price a little bit and then the next growth cycle it was even tighter now to some extent that was also due to uh improvements that the Dow was able to make to the protocol that greatly improved the capital efficiency of uh the entire system we would say uh such that in all situations there was a much more Earnest discovery of supply and demand for beans and that obviously creates a much uh more efficient market in the grand scheme of things which uh has led to less underlying price volatility but uh the bigger point is that if you take a a little bit of a step back the only thing that being stock really does is two things one it tries to oscillate the price above and below its Peg and two going back to the question around credit uh it it tries to keep its debt level at uh uh what it what is called an optimal debt level but can be thought of as some sort of sustainable debt level because if we go back to the only the only way that the bean price is stable in the grand scheme of things from a theory perspective even if there are lots of reasons why short term the price is stable is the credit of the protocol uh the the debt level of the protocol is really another main thing that Beanstalk needs to keep track of if it's going to be uh healthy in the long term and so it doesn't just optimize around price it also optimizes around debt level and if we look back at beanstalk's history a little bit uh prior to the the growth cycle in March and April prior to the exploit where Beanstalk Grew From something like 30 million uh maybe 20 20 something million beans to over 100 million beans at the time that it was exploited uh the the entire system basically started to de-leverage for the first time and that was a major proof of concept because the the Pod rate the debt level of the system or what the system uses as a proxy for its debt level uh had increased to to like I don't remember what the high was but it was multiples of the current supply of beans okay uh something like 10x or more the supply of heat so the protocol was maybe it was 15x I think the peak was almost 16x so for every being the protocol had issued there was like 16 pods of outstanding debt so Beanstalk had an immense amount of debt and a lot of that was due to the fact that the original parameters and even updated parameters to be in stock until January let's call it the first five months the debt issuance was uh imperfect to a point where the protocol just had a continuously increasing debt level until around January so in January the debt level flattened now for the first time and then in in February or March it started to decrease and and while we can never know what actually led to the the growth cycle uh it did seem like uh based on listening to the market activity in the Discord and Twitter and stuff the the beginning of the deleveraging the very first deleveraging of credit based money or a Fiat style money uh on chain that was very much viewed as uh somewhat of a proof of concept of being stalked by the market and that did lead to a lot more Capital coming in and uh the growth cycle that was touched or by the the exploit so that was that was prior to the X point and then I know I've been talking for a while but to go back to the the core point that as long as Beanstalk is viewed as credit worthy it should be able to maintain the bean price at its Peg uh Beanstalk even though it was off for down for maintenance by the Dow if you will uh for for uh almost four months as a result of the exploit uh when Beanstalk was replanted on August 6 by the Dow of 2022 so this year uh prior prior to the exploit it was able to borrow something like 15 million dollars for from the market which I think was more than it had ever borrowed historically or close to it in terms of actual dollar value uh in its first eight months on chain it was able to borrow while it was off uh 15 million dollars and since then a couple more million dollars to recapitalize uh the protocol and and when it was replanted and since then the price is more or less been at a dollar there's been some oscillations as would be expected but generally the price has been at at its Peg and therefore the fact that people are willing to lend to the protocol meant being stock was able to revive itself or be revived by the Dao uh merely exclusively because it was credit worthy because people were willing to lend to the protocols so uh I know there was a long answer but hopefully it's uh illustrative of how a credit based uh money is potentially different yeah you know what's interesting about your description of Beanstalk is um there we read one of your blog posts I don't know if you wrote it or not but there was a philosophical question on their parallels between credit worthiness and the fiat currency system um so my question to you is how if a lot of things in in I guess in reality are not sustainable right and so I think in the blog post you were you were questioning on you know what what is a metric of success for any any currency and in in the blog post is like you know how long can a currency be sustainable to be to be attributed to actually success right and so we have our current Fiat monetary system where typically about every 100 years there's a new world Reserve currency and so we're at the end of it for for the dollar and so you know what are what are the parallels between like a credit worthiness you know type of currency like bean stock and what are the parallels between that and like a traditional Fiat system and I guess just that kind of like layer something on top of that like what what other factors have you considered out independent of just credit worthiness that may be Necessities as far as like I guess inspiring confidence is for participants within your ecosystems to means just make sure like it's definitely like a a long-standing balancing act that requires you know a lot of contribution right so independent of like the native utility of you know wanting to create that stable Peg for like you know tertiary ecosystems to emerge to leverage that like what else outside of credit worthiness that you you can establish and prove over time you know have you thought of other things that could also inject that confidence to your participants as well does that make sense yeah so a couple questions there the first is you know if if we look at if we look at the past 500 years or so and as you said uh each of the the dominant money uh over the past 500 years has lasted around 75 to 100 years or so right and the past hundred years has been dominated by Fiat money uh for For the First Time really uh there have been attempts at Fiat money historically but this is really the first time that the market has uh adopted uh at scale uh at a global scale uh a credit based money or at least that we know if we could that could be incorrect uh but uh prior to prior to the trends there were there were short short-term uh issuances of Fiat money during wartime for example uh but there was there was never a a permanent shift to Fiat money until the past hundred years right and I I think without a doubt the past hundred years have been some of the most productive uh uh in history yeah and I think a lot of that is is people can obviously debate this but is due to the coordination that was facilitated by uh being on the same currency everyone's on the same currency that kind of extends to the Past 500 years but when we talk about what's been special about the past 100 years and Fiat money the world running on Fiat money it seems like uh there's obviously some problems that come with being on Fiat money in terms of credit crunches and uh short-term uh problems but if anything there's the difference between having like a sovereign credit crunch uh and having a non-sovereign credit crunch where you'd have a bank uh a a bank that has some sort of gold issued money uh or a fractional Reserve issues money go bankrupt and all of the the depositors in that bank lose all of their money there was always a significant amount of cost associated with uh those losses or people going bankrupt and so one of the main advantages of a Fiat money is you can have a a zero collateralized system right a fractional resource system sets you down to close to zero but this now gets you down to actually zero so there's in theory an infinite money supply but where it really comes is in the ability to take risks right where uh there's there's an ability to create new money uh instead of having lenders or Savers uh fully fully go bankrupt and a full reset there's clearly been some additional value the market has placed additional value in having a currency with an infinite Supply and I think that's played out in two different ways one is in the competitive carrying costs where the interest rates on on Fiat money has historically been lower or more competitive than therefore more competitive than the interest rates on uh fractional Reserve money even or hard money certainly but fractional reserve implementations of hard money because of the collateral requirements and in particular in practice you have the ability for in the U.S system at least the FED to buy treasuries and through buying treasuries they're able to uh manipulate uh interest rates or I don't know if manipulate is the right way they're certainly able to affect interest rates in a way where the interest rates on the Fiat money are more competitive than the interest rates on the hard money or the fractional implementations of hard money so that's the first place where it plays out right you have more competitive caring costs uh now the second place is you've got disability when you have lenders go bankrupt or potentially bad debt taken on instead of liquidating large swaths of Savers uh the ability to just Mint new money uh allows for more risk taking on uh various ends of the spectrum uh but uh in theory less of a downside when there's a when there's uh poor Investments made now the problem obviously and it's a big problem is when the capital uh the senior age that is being used to affect the interest rates and being used to facilitate more risky lending uh such that people can do more things and more people have access to credit uh the problem there is when that senior is distributed in a way that's highly disproportionate and so it in practice what what Beanstalk is is a an implementation of uh credit based or Fiat money depending on how you want to think about it with a totally transparent uh and and as fairly designed as as possible uh issue and schedule of the senior rich and so in theory you get all of the the former benefits uh where you have the the competitive caring costs you get all of the latter benefits where uh this hasn't uh been built yet per se but uh lending markets and debt markets built on top of Beanstalk there's a way for the system to make up the bad debt without liquidating all of the Savers per se and and this is the this is where Beanstalk is potentially competitive for beans are potentially competitive as a currency in general uh is that the senior age is distributed entirely transparently so businesses that are participating in the Beanstalk ecosystem are not looking for handouts or don't need to uh uh there's no corruption around accessing the senior age whatsoever it's all done transparently and algorithmically and therefore you get all the benefits and less of the problems associated with current implementations of Fiat money and that's that's what what we uh we hope in stock uh is and can become hmm you know one of one of the interesting things about this conversation um so I think this is a good time to kind of give you um our background and uh so we uh so we started this podcast in 2019 the In the Heat of the bear and within this podcast we ended up interviewing someone in the metaverse industry and uh we uh eventually got into the metaverse as a business so we have another business called metazone that's focused on Deployable applications as nfts and and within that construction we were building our own content for for deploying in the metaverse our own uh play to earned game so quickly we realized that one of the things that we needed to do is come up with a sustainable ecosystem and if you watch our podcast we're continuously talking about sustainability and one of the things that we're struggling with is um identifying sustainable anything right so if you look at if you look at just our our life ecosystem right the sun is continuously expanding eventually it will engulf Earth and like kill all of life on earth right that's why Elon is pushing for for for you know people going on to different planets right because eventually we are going to perish if we stay on earth right so so when we're thinking about sustainability we're trying to come up with examples of what is sustainable then we look at fiat currency it's kind of sort of designed to to fail kind of like what you were talking about where you can continuously it's like infinite money right once you have infinite money then eventually you won't be you won't have enough money to pay back the debt and then therefore the Dollar's worthless so what's interesting about what you're talking about is they're in in the play to earn ecosystem there has to be some sort of stable asset in order to distribute within this ecosystem without that stable asset you are hinging upon your your I guess your the life of the ecosystem is depending on the value maintaining by itself and so a lot of the times when you have a play to earn ecosystem it's it's sort of deemed as sort of like a Ponzi scheme you have to get new people coming in the price keeps going up it brings in more people and then all of a sudden it just doesn't go up anymore and then your the ecosystem value goes down and so one of the things that I believe is going to be kind of necessary or important is the defy ecosystem kind of merging with like the metaverse and like Play Turn and like everything that's happening that the like the digital Nation spawning they're gonna have to like play with each other so I wonder her I wonder if you if you believe like first what what are your what do you understand about the metaverse um just to kind of kick off this part of the conversation and like do you see like the metaverse as as an important part of the D5 space like in D5 do you guys consider nfts and metaverse like all that stuff and when you're designing some of these products so at this point we Publius are just a small part of being stock and the Beanstalk ecosystem so uh there are there is a significant interest in The Meta verse in general uh in the Beanstalk community and I think the general recognition that a feeding stock is to become internet money yes widely adopted internet money right that it's obviously going to be used in the metaverse and I think there's a great tweet I don't remember it's from a long time ago but someone's saying that uh Beanstalk is uh gonna be like the the world's largest multiplayer uh like P2P game uh ever and the real concept is like that if if you have an existence in the metaverse uh whatever currency you're using is just going to be the internet currency right there's right there's a competition to be the internet currency but whatever currency that is is the currency the matter versus gonna use right and if we go back to what we were talking about before about how uh there's there's been a dominant currency that runs for a hundred years uh approximately each uh the the hope is that you know at least Beanstalk can run for at least 100 years yeah as the dominant metaverse with currency before it's overtaken uh or maybe a fork of Beanstalk overtakes it right there's no way to know but the concept is uh perhaps being stuck is just the step in the right direction to create that best money but uh what what do we think about out the metaverse we love the metaverse uh you know we're we're excited about we we like the physical world just yeah a lot as well yeah certainly uh but but we're we're excited at the potential for for a lot of this and how it can bring new experiences to a lot of people for a lot cheaper that's obviously valuable so sure so let me educational perspective and yeah let me add um sort of like when when someone asks you know you know why why the metaverse why is it going to be important I think we have sort of like a little bit of a unique view of it where the metaverse is not necessarily for like the people who are like you know well off they're not going to spend they're gonna look for entertaining experiences in the metaverse but but I think the real value of the metaverse is simply creating a digital ecosystem where anyone with internet access can participate so imagine where people all over the world who have access to the internet that have essentially been disenfranchised just because of their local ecosystem they can now participate in a digital Nation where inactivity can actually earn them an income that pays for their physical existence and so now we're talking about potentially onboarding 2 billion people who don't have an opportunity locally but will now have an opportunity in the metaverse to provide whatever it is that we can come up with whether it's like the low-hanging fruit of play to earn to more complex activities like defy in the murderers yeah that that's why I think the D5 Community it's it will Leverage The metaverse in that respect because it is it's an experimental playground for these new economic models that I think have direct applicability because the metaverse will facilitate a lot of new value creation right so we have to extrapolate how to leverage that how to we how do we create stable ecosystems on top of that right this is where default fi has to come in and kind of like show us the way right the bean stock method is I think is a very good implementation of that like we're just clearly the metaverse has the potential to onboard tons of user activity right and from that we could spawn new methods of value creation but like what what is the ultimate and purpose of that the ultimate end utility of all that activity and galvanization of of human value well it's to create new money potentially yeah like in the virtual sense you know like these these new forms of monetary systems can again lift up a whole segment of Pop of humanity that doesn't have that opportunity that's right that's kind of how we view the metaverse right now and we've been kind of like waiting for the defy like you know Community kind of like come in and test these these theories out you know and experiment but there's also a lot of Primitives that have yet to been established for the metaverse itself yeah like it's it's a very and one of the private intuitive yeah one of The Primitives would be something like Beanstalk where whenever you create a play to earn game you can't have a sustainable ecosystem where the token is completely fluctuating constantly and so there needs to be a a a pair of you have the cryptocurrency of the actual project but then it's paired somehow and stabilized through these protocols and so then then you could create something with reasonable sustainability and we're talking sustainability like more than like five years something where the lifespan of a game is about five years I mean if you can create sustainability at that point I mean yeah have a good ecosystem yeah so yeah that's definitely always been our Focus for sustainability but I guess uh yeah now that we're all in metaverse uh for now I guess uh you already asked the question of I guess you guys already have a good interpretation of what the metaverse is and you see value in it right but I guess uh do you think you agree I guess with what it is we just kind of painted like the defy integration into the metaverse is is going to be as important as we think it is or can be like what are your thoughts on that there's certainly going to be complementary uh when when we think about when we think about the right way to build this technology particularly we agree with you on in terms of who's going to be benefiting the most from this technology it's currently the people that uh either at the margin just have access to an internet account but don't have access to uh Banks or more sophisticated technology uh or even people that currently don't have internet but are getting there uh that's where all of this is going to make the the biggest difference uh we all of Beanstalk is designed uh to be as frictionless as possible in particular zero fee so uh one of the next projects that the Dow is working on is the implementation of a beanstalk native uh amm or Dex uh which will be totally permissionless obviously but it's uh it's got zero fees so there's no trading fees whatsoever and it's so funny the way things work if you look at the the the code of uh current uh amms a lot of the the gas costs of trading in the amms actually is from the distribution of the the trading fees yeah so uh these these these these Protocols are charging their users to charge their users uh it's it it just sucks all around so uh the concept is if you have open source technology uh something that goes hand in hand with that is that you shouldn't shouldn't really be a rent-speaking open source technology so there's obviously Network effects that exist uh but the goal is not to create at least from our perspective the goal is not to create uh open source Technologies with no fees that are still rent seeking to go is to create non-rent seeking totally neutral uh technologies that then can be used by by everybody yeah in addition to that I mean yeah I was just going to add that uh in addition I feel like you know a lot of the stuff I I don't know how it is like in in IRL for you when you're talking to your family about what you're doing I'm pretty sure they have no idea what you're talking about would that be correct you're a member of the family but generally it's not not an unfair characteristic right right um and so it's the same with us when we're talking about the metaverse we're kind of looked at as kind of crazy right I was like who's gonna spend a lot of time here and all that stuff so I'm I'm sure it's like you know when you're talking to your family about this stuff you know it being confusing but it's equally you know when things are this this kind of confusing it's like it's an indicator of you know potential importance because all the stuff that you're saying like it has huge implications for like the sustainability of like internet ecosystems right because it's it's like you're saying it's permissionless there's like zero fees right is that right like zero fees there's no there's no cost so what what motivates those gas fees but that's that's like a security cost imposed by the network that's correct a fee imposed by Beanstalk the protocol so yeah but yes go ahead sure so um so all these like um abilities that you guys have to create these um I guess attempts for sustainability like how do we how do we start thinking about ways of leveraging these protocols in in sort of like micro eco systems and is there even a way is like can we have Micro ecosystems that are sustainable or are we talking about like what Iron Man usually talks about is like you have to add complexity because because you're adding um like part of the stuff that you said that you haven't built yet are are lending protocols is that correct like additional complexity that allows for um not such a simple entry and exit from an ecosystem right so so yeah talk about the complexity there's so much Beauty in composability and that's one of the things that from our perspective really differentiates this technology from any that takes it has existed prior to it and so when you ask about the existence of micro communities you said yes uh that is you can't have small communities that are secure without secure money there's no money is used to coordinate behavior and if you have a volatile money it's very hard to have a secure small community it's a little bit easier with a volatile money if you have a small a small community than if you have a bigger Community right harder to maintain a bigger Community with volatility but even at a small level volatility is hard so if you if you kind of humor Us and assume that there's stable money be it beans or or something else uh if they're stable permissionless money ah there are probably a lot of other problems associated with creating sustainable micro communities from my perspective the first would be security maybe it's a micro Community within a within a nation state and you're you're paying for security through a nation state uh but beyond that uh it's hard to it's hard to think about what else you need other than let's let's break it down you need your base money but what we were talking about earlier is a financial stack what does that really mean well it's the ability to trade it's the ability to uh borrow and land it's the ability to take out leverage and it's potentially other things uh but those are those are sort of the core Primitives that currently exist within D5 and so what the Dow is currently spending a lot of time working on is the implementation of evm compatible zero fee implementations of Beanstalk uh compatible or being stock native uh implementations of each of those things so perhaps over the next couple of months there will be lots of work uh to show uh to to speak about this uh more specifically but the general concept is once you have money uh what what you want to be able to do with that money is pretty obvious right it's those couple of things that we named at least to start sure and then there will be other other needs that present themselves but those are the first things where if I'm a business at the very least I need the ability to borrow and lend I need the ability to buy and sell uh and when needed I need the ability to take on Leverage long or short to be able to head certain exposures so that's a pretty good base stack in order to get going and from that perspective there's a lot of work being done on uh as we said a zero fee permissionless decks uh over time the hope is to extend that not just to a base amm model but a more generalized model to support different asset types uh more details will hopefully be forthcoming on that in the near future as well as what is currently understood to be cdps where you're taking collateral and minting synthetic exposure against that uh and then something like a a tradition National mining market so it's something probably a Rari arari Fork to start or or you know the cool nature of Open Source technology is that everything being implemented starts as a fork of something else I think it's changed heavily yeah so uh in terms of the exchange uh C Port is great so uh there's been a lot of a reference of Seaport in terms of uh you know there's endless stuff to to reference and to learn from uh in terms of how to implement things and that's really one of the cool Parts about open source technology so the the hope is to have the being stuck down and also at this point it's not just the Dow it's PR there are private companies that have raised money to build on Beanstalk or at least one private company we should say that does raise money to build on being stock and they're now uh submitting uh they're now submitting uh PR's and and being stock Improvement proposals to the day off so that's awesome the what will be built on being stock in in the coming years God willing we can only imagine uh but where where at least we understand the Dow is starting we're thinking about stuff is those base things that you need to create a sort of a base Financial stack as well as trying to put the I don't know if you can say finishing touches on these stocks that might not be the right way to think about it but the base layer is certainly getting to the point where there are only really marginal improvements that that that have seemed to be possible it's hard to imagine uh whereas if you look at Beanstalk a year ago and Beanstalk today you'd say this is orders of magnitude better than this maybe there are ways to get orders of the magnitude better but the effect I'll have on Peg maintenance is probably orders of magnitude less because the systems is getting to a point where it's it's pretty sustainable uh in its current form so that doesn't mean that it's going to be long-term sustainable or that it's going to be perpetually sustainable but it does seem like the base model model is is getting those so now one of the main questions is how to re-implement on-chain governance uh that's a question that was not answered sufficiently well previously and something that clearly does need to be answered sufficiently well uh going forward so uh that's that's a major open item for the Dow and there's lots go ahead yeah no I was just gonna add uh so uh by happenstance I was going to ask how do you have on-chain governance because um I I know you've had a couple of podcasts explaining the the compromise on April and uh so I don't want to beat a dead horse But ultimately the outcome was that uh you made an update to the protocol where you needed five of nine um multi-sig right in order to enact a governance acceptance is that correct yeah the Dow decided to implement off-chain governance whereby voting now takes place instead of on-train on Snapshot okay and then it requires a multi-sig to implement the changes that were voted on by the Dow whereas before it was on chain voting and then permissionless implementation of the changes okay so my question is it do you have a thesis for decentralizing this aspect protecting um let's say like a flash loan attack right through multi-sig what what what are the options what's the thesis out there in in terms of protecting from a flash loan and having decentralized governance actually be a functional thing with protection well the on-train governance is previous implementation was not flash loan resistant obviously uh which led to the exploit right uh on the one hand it would be easy to just slap on flash loan resistance and be like hopefully this is good enough now uh but think that the Dow has uh quite prudently decided to move a little bit slower uh going forward and so right now it let's say there was a flash loan and uh someone proposed they did it in such a way where they had this the votes to past the some sort of malicious proposal the multi-sig would because it's permission would just not correct approve that um manipulated governance vote right now that's obviously imperfect from a permission list or decentralization perspective but it's safer sure so if you're asking about the thesis the thesis is that it's got to be figured out that's the thesis okay so in in the same way there's the starting point for for deciding to work on Beanstalk was well the collateral problem has to be figured out one way or another uh you know we have the hubris to think we can be a part of the solution so uh that's the short answer is we're excited to work with the Dow over the next couple of months to think about different options and potential implementations and work with halborn the Auditors that are currently auditing Beanstalk continuously in order to to hopefully ensure that the the implementation the Dow goes with is as safe as possible but obviously we're not in control of being stuck at this point and if the dad decides to implement non-saved governance there's nothing we can do to stop it uh we're because we want the in stock to succeed we're going to try our best to be a part of implementing a safe and secure and sustainable uh solution to on-chain governance but it's it's non-trivial it's a problem that people have heard extensively about and there don't seem to be very obvious Solutions okay uh at the end of the day everything is is a spectrum and when you look at risk and return I think that the the thing you want to avoid is is the potential for risk events like the one that Beanstalk experience where you have a complete destruction and value whereas the protocol also need like so that's one thing that the protocol needs to be resistant to malicious changes where it's attacked or people are implementing bad changes but on the other hand if Beanstalk has significant exposure to usdc let's call it and uscc is going to be is is hacked in some capacity or Circle goes bankrupt sure there's a problem uh there needs to be some way for Beanstalk to respond quickly in order to protect the system so there's a real balance there between moving quick and moving slow and that was ultimately something being stuck didn't get right the first time but we're optimistic that's interesting um we're it's funny we just keep thinking about like the sustainability of this stuff and we always wonder it's like uh building a decentralized protocol kind of like Beanstalk is sort of like and doing it completely decentralized and and leaving off um you know the decision making to endow it doesn't it feel like it's like building a plane while trying to make it fly at the same time or do you think it's it might be better to kind of build out the plane sort of like centralized and then eventually once the plane can fly then you you leave that off to the community to decide you know where it goes how much how much the plane tickets are and things like that like do you really is is there you got to leave it up to the market to to decide how much the plane tickets are but right right yeah you make you you make a great point about how to develop and it is worth staying it is it's really important to say when we deployed Beanstalk in August of 2021 we thought it was done yeah like you know we thought this is this is it and it's the the Dow will take care of the rest now we quickly learned there were lots of improvements that could be made and we've been uh grateful to be able to work with the Dow and maybe with the better things to say is just be a part of the Dow sure uh as the Dow has been able to implement lots of improvements to be in stock but really you gotta just do things the right way I think it's really hard to start doing things the wrong way and then do things the right way later you start doing things the right way doing things the right way is really hard and I'm not saying that we're doing things the right way per se we're trying our best uh but it's really hard it's really hard to start with something bad or that everyone is like ah this will will fix this in the future and just keep going I think right now that's being stocks governance and to that point oh you know something like Beanstalk there's a real Lindy effect of how long has it existed I think that there's a a valid argument to be made that the counter doesn't start again until there's on-chain governance that the real Lindy effect doesn't take place until we're back the whole system is back to totally permissionless maybe you can say the pag maintenance models on display the economics aren't displayed that's certainly true but when we talk about the movement to a permissionless money that hasn't happened yet unfortunately and that sucks so from our perspective you gotta you we we started with on-chain governance that actually didn't work out so good but cost you know it's it's it is the cost of doing business in the wild west and it is the cost of experimentation I think that's one thing the Dow's been very good about being transparent about is this is an experiment yep and you can't experiment behind a glass wall unfortunately you can theorize behind a glass wall but at the end of the day the only way to actually get that Lindy effect get that security get that that real belief that this works is to be out in the wild and there have been dozens maybe dozens is an over exaggeration but a lot of failed attempts at out goes the Stables just from an economics perspective separate from governance none of them have even gotten to the point where governance matter right so this is a great this is a good problem to have from our perspective uh but it's a problem nonetheless that needs to be addressed so the Dow is working on it and God willing it'll happen in time and uh you know we're glass half full type of people so it'll be figured out at some point because it has to be yeah you're just like me glass half full yeah but I think that transparency is like the most important thing yeah that that's anything that can potentially go I guess be interpreted as I don't know any misstep in any you know development pathway or projects growth Cycles whatever as long as you may remain transparent and honest and open with your community in the world you know having these types of conversations with Outsiders and yeah I gotta commend you guys so a big deal I understand that you guys were Anonymous until the compromise and then you guys uh sort of uh um kind of you know kind of disclose you know who you are and that you weren't a part of it and so I got to commend you guys for for doing that that's uh that's a very good example of how to do things properly so no one's immune to getting compromised so uh I think you guys handle it excellently yeah I'm like I'm like half and half on the whole remember like we you know I do like the the idea of anonymous Founders to you know decentralized organizations or applications whatever I think it there's Merit in that and that's right I think it's it's fine but also I think it can have the potential to produce you know or be co-opted I guess by you know Bad actors so the fact that you're able to come out of that potential negative interpretation and just you know basically verify to the world that you know we're not one of those I think that that's going to give your ecosystem that longevity that it needs confidence especially if especially if an accredit based yeah you know I'll go stable coin like that that has to factor in in my opinion so you know this is one of those battles I think the web three space is gonna deal with as far as like what what is the actual ethos is are we building totally distributed you know ecosystems we all want just a bunch of satoshi's creating new Innovative techno technological platforms yeah we honestly know like you know who are the actual Founders to these things well we appreciate the services and the you know yes the products that they created yeah and the the communities they galvanized around that like is that what we want or is it more like uh some hybrid approach you know right you know yeah but these are things like you said we'll figure out along the way just like the governance issues everything right it's just it's all part of the fun right it's figuring this stuff out like one step at a time yeah so uh so that's that's about our time Publius I appreciate you joining um you know and talking to us about Beanstalk and everything um I I guess I'm gonna ask is there any other last words any uh potential releases that you want everybody to know about anything any last words before we uh head out here okay uh no just want to say thank you guys for for having us and for taking an interest in Beanstalk uh we we don't really view our our role as as selling Beanstalk as much as just talking about in fact we don't want to sell it to anybody we want to just talk about it and explain how it works and let people know that it exists and that that it is potentially uh an exciting part of the future of D5 so from that perspective uh we're just grateful for you guys for sharing your platform with us and uh to your point about anonymity uh and yeah it's hard to know what the right thing is yeah obviously push came to shove in our instance uh and you know it had to be done uh but we we really we continue to have these these interviews and uh act as Publius uh because we really do view it as important to one day retire Publius uh and Publius needs to disappear at some point and it's going to be a lot harder to make that happen if uh if we are interacting uh in our current capacity individually right as individuals so we continue to use the pseudonym because one day the hope is Google is can can actually disappear so it's still probably a little bit earlier for that Beanstalk is still only a little over a year old but uh we remain uh ambitious in our in our goal to to to be totally irrelevant to the success of being stuck uh in the not too distant future interesting yeah I love that it's yeah hey I appreciate your time man um let's let's have another follow-up call here pretty soon um especially on new releases and everything um so again I really appreciate your time and uh let's follow up on on Discord wonderful thank you guys for having me all right thank you guys for watching that's been Publius from Beanstalk uh a completely decentralized stable coin um and so make sure you follow us on Twitter at the Block runner at meadowzone IO and Roe v Ai and we will catch you in the next video