Beanstalk (BEAN)

Basics

• Based in:
• Started in / Announced on:
• Testnet release:
• Mainnet release: summer of 2021
• A decentralized credit based stablecoin.

History

Designed to innovate on the previous attempts of projects like ESD and Basis Cash.

Audits & Exploits

• From their blog (15-11-2021):

"We are optimistic Beanstalk will contract at least one high quality auditor by the end of the year. The first marketing Snapshot proposal created a community bounty program that is hosted by layer3.xyz and running for a couple more days. Check it out here."

Bugs/Exploits

• Beanstalk logic error disclosed, $3.1m was at risk, $181k bounty paid (18-2-2023).
• From Blockthreat (19-4-2022):

"On April 17, 2022 Beanstalk Farms governance was subverted using a flash loan which resulted in the loss of $182M. The attackers have also sent another $250K to a Ukrainian donation address."

Technology

• Whitepaper or docs can be found here (publised 6-8-2021, modified 18-12-2021).
• Code can be viewed here.

Implementations

• Built on: Ethereum (12-2021), Aims towards "decentralized Ethereum L2s, and other blockchains with decentralized EVM-compatible bridges." (15-11-2021).

How it works

• From their FAQ (15-12-2021):

"Beanstalk uses credit instead of collateral to trustlessly issue a decentralized stablecoin with protocol-native high-APY. A decentralized, credit-based stablecoin is far superior to a collateralized stablecoin because (1) it is resistant to regulation & other centralized failure modes and (2) as demand for Beans grows, instead of scale penalizing users with negative carry costs, the growth of Beanstalk benefits users by distributing a yield back to anyone who is staking Beans. Beanstalk uses a decentralized set of incentives that the system uses to continually oscillate the price of 1 $BEAN to $1.00USD. Users are able to do things like buy Beans, transfer Beans, Silo (“stake”) Beans, and lend debt to Beanstalk.

Any time the price of 1 Bean is over $1.00, Beanstalk Protocol prints more Beans to increase the supply, and in doing so bring the price back to $1.00. The new Beans produced by Beanstalk are split 50/50 between (1) Beans that are “staked” in the Silo and (2) to pay off the debt of previous Beanstalk creditors. As demand for Bean increases, the debt is paid off more quickly, and the APY’s on Silo’ing rise.

When the price of 1 Bean is _below_ $1.00, Beanstalk issues debt that allows people to burn Beans today to reduce the supply and increase the price back to $1.00. In exchange, you get a debt coupon at a market set interest rate. Using the mechanism described above, that debt is paid off over time in a first in, first out manner.

Staking

• You get equity, Stalk, by “staking your Beans” in the Silo.

Roadmap

• Can be found here (15-11-2021):

"In addition to an L2 integration, some other large targets for Beanstalk development for 2022 are to:

1. Finish the initial security audit(s).
2. Make Stalk and Seeds tradable ERC-20 tokens.
3. Make Bean and LP Deposits tradable ERC-1155 tokens.
4. Approve and fund at least 1 official Beanstalk development team through a BIP, independent of Publius."

Competition

• Other stablecoins. They give an explanation here (16-11-2021).

Team, Funding and Partners

Team

• Full team can be found [here].
• From their FAQ (15-12-2021):

"It was launched in August of 2021 by a group of anonymous developers and economists using the pseudonym Publius."

• From their blog (15-11-2021):

"The dev budget has already started to create a lot of value for Beanstalk. As part of the dev budget BIP, the Silo (the Beanstalk DAO) hired its first dev. Since then, multiple Snapshot proposals have hired additional devs. There are now more than a handful of quality developers that also want to start working on Beanstalk."

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