Alright my good frogs + frens … here is a thread and some #FrenchChart on a very fascinating protocol called ‘Beanstalk’ :)
1/x
@BeanstalkFarms is a stablecoin protocol on ETH L1 that has been around since last fall…
Its stablecoin, $BEAN, currently has a market cap of $50M as per @coingecko.
2/x
‘Beanstalk’ is not an off-chain backed stablecoin like $USDC, nor an on-chain collateral-backed one like $DAI or $MAI, nor a partially-collateralized one like $FRAX.
It is more similar to...(cont)
3/x
...$LUNA and $UST, and also somewhat reminiscent of $TOMB. Its exact mechanisms are unique though, and imo should be taken on their own, as it is clear the devs put a lot of thought into how everything works, and the protocol has been quite successful so far.
4/x
Some people dislike stablecoins that use these type of mechanisms, but @BeanstalkFarms team member Publius does a good job of explaining why such stablecoins are needed within the defi space in this video, which is well worth watching:
5/x
Some other gigabrains have done an incredible job breaking down the math and other complexities within the protocol, so I am going to instead try to explain it in the most simple, dumbed-down terms imaginable.
6/x
I’m also going to do so within this aesthetically pleasant framework of a “Farm” that the Beanstalk protocol has developed :)
7/x
We begin at Beanstalk Farm, where a small colony of hard-working stablecoin-farmers work hard to keep the $BEAN stablecoin always at $1, while growing its use and utility within the world of defi.
8/x
Near Beanstalk farm are two local markets – Uniswap and Curve – where $BEANS are traded.
If they wish to do so, Beanstalk farmers can combine $BEANS with $ETH at Uniswap market or w/3CRV at Curve Market to build an ‘LP token’.
9/x
Back at Beanstalk Farm, these ‘LP Tokens’, as well as plain regular $BEANS, can be ‘staked’ inside “The Silo”.
In return for staking them, farmers receive another ERC-20 token called $STALK, and an in-protocol only commodity called ‘Seeds’ (which slowly grow into $STALK).
10/x
Owning this $STALK earns farmers a proportional share of the $BEAN rewards that are given out when $BEAN is over its $1 peg.
Owning $STALK also gives governance rights.
11/x
One important note – if you unstake from “The Silo” (which you can only do after 7 hours fyi (soon to be 4)) - you lose all your $STALK and ‘Seeds’.
This incentivizes people to keep staking (liquidity provisioning) long-term.
12/x
Indeed it's somewhat reminiscent of the $esGMX mechanism that @gmx_io uses, but even more explicitly rewards farmers who LP long-term.
So, again, ‘The Silo’ is one half of what constitutes ‘Beanstalk Farm’ – and it deals with Liquidity Provisioning and Governance.
13/x
The other half of ‘Beanstalk Farm’ is ‘The Field’, which revolves around keeping the $1 peg for $BEAN.
Here farmers can “sow” $BEAN into the field (i.e. ‘planting’, or ‘lending’ it to the protocol, or ‘burning’ it out of circulation, depending on your preferred metaphor).
14/x
They do this in exchange for ‘Pods’, which his another in-protocol commodity (non-ERC-20) token.
‘Pods’ become harvestable when $BEAN is over peg.
‘The Weather’ that affects the field is what determines how many ‘Pods’ you receive for ‘sowing’ $BEANS’.
15/x
When $BEAN is below peg, ‘The Weather’ incentivizes people to ‘Sow’ (plant/lend/burn) $BEAN, as apr’s are super high.
To round back to where we came, this increased incentivization to ‘Sow’ (plant/burn) $BEAN is what pushes up the price when it is below peg, as...(cont.)
16/x
...people will buy it to in turn ‘Sow’ it for the future rewards via ‘Pod’.
Indeed the best way to understand ‘Pods’ is that its like an IOU for future $BEANS.
17/x
Also, there is an OTC Market for ‘Pods’ built into the @BeanstalkFarms protocol, so you can sell them/buy them/etc based on your time preference/desires.
18/x
So, again… when $BEAN is above peg, new $BEAN is minted.
This new $BEAN is given out 50/50 to ‘The Field’ (aka the ‘Pod’ holders) and ‘The Silo’ (aka liquidity provisioners).
All of these mechanisms take place within ‘Seasons’ (like ‘Epochs’) that last one hour each.
19/x
And that is how ‘Beanstalk Farm’ keeps the $BEAN stablecoin at $1, while allowing it to keep growing in market cap so the good people of defi can benefit.
The easiest way to get started with @BeanstalkFarms is to provide liquidity in ‘The Silo’...
20/x
Again you can either single-stake $BEAN or build a $BEAN / $ETH LP Pair at Uniswap or a $BEAN-3CRV LP Pair at Curve, and stake those LP tokens instead.
This should be very familiar to most defi participants.
21/x
Then, as you become more and more familiar and comfortable with how @BeanstalkFarms works, you can consider jumping into ‘The Field’ as well :)
If you still feel confused, there’s a bunch of amazing threads and videos on @BeanStalk that will help explain everything, below.
22/x
I do not currently hold any $BEAN (bc to be frank I have done basically nothing on ETH L1 as a somewhat latecomer to defi), however I really like their protocol and was extremely impressed with the interview with Publius mentioned above.
23/x
As a huge history and macroeconomic nerd I especially appreciate the fact that they started their whitepaper with the following Alexander Hamilton quote:
“A national debt if it is not excessive will be to us a national blessing; it will be cement of our union.”
24/x
...I think Stablecoins are going to be the biggest thing in crypto the next few years, as there is an insatiable demand for them (just as with other EuroDollars generally (dollars outside the US banking and credit system) h/t @noahseidman h/t @JeffSnider_AIP).
27/x
There is also an insatiable demand for stablecoin yields, and @BeanstalkFarms offers some of the highest such returns in defi at the moment…
In addition, there is currently a vote going on whether to add the Bean:3CRV pool to the Curve Gauges system...(cont.)
28/x
Conclusion: All of the above variables will shape and define the rest of this decade, and it will be fascinating to see how they unfold.
To answer the question of whether Millennials will get screwed or get rich in the 2020’s though, I think it really depends.
51/x
Some Millennials will do extraordinarily well, but sadly others will struggle – a continuation of the same process of increasing wealth inequality we have already been witnessing (possibly hastened by wealthy young ppl leaving West entirely to avoid high taxes)
52/x
A plumber in FL or gigagenius-coder in TX with good investment exposure may come out of the 2020’s with millions upon millions of dollars, but a paralegal in San Francisco or a secretary in Buffalo w/ (no investments or 401k that’s 50% bonds) may do extremely poorly.
53/x
(continued) Thread: Will Millennials Get Screwed In The 2020's? Or Rich?
...continuing onward...
26/x
Its not all positives on this front though…
For at the same time the Boomers are retiring, young Western job seekers are increasingly having to compete with workers from countries like the Philippines and India, where the cost of labor (and cost of living) is far less.
27/x
Anyone who has hired freelancers on Upwork has seen this firsthand, w/ the untold number of highly intelligent + motivated Filipinos + Kenyans + Indians competing for work on the platform...
28/x
QiDao is one of the fastest-growing, most well-respected protocols in defi, and the sheer multitude of ways you can earn $ from it are quite vast...
1/x
I did a big thread on @QiDaoProtocol a few months ago (see below), but today in this thread I wanted to actually break down all the various ways you can earn yield via...(cont.)
...the @QiDaoProtocol ecosystem, as there have been new strategies popping up almost daily it seems like...
As a brief reminder, QiDao is a fully-collateralized disintermediated on-chain stablecoin protocol, using stablecoin $MAI (aka $MiMetic) and governance token $QI.