In Plato’s dialogue, Phaedrus, there is an interesting remark made by Socrates, as highlighted at the start of Chapter 6 in The Dawn of Everything: A New History of Humanity, written by David Wengrow and the late David Graeber:
Would a serious and intelligent farmer, with seeds he cared about and wished to grow to fruition, sow them in summer in the gardens of Adonis and rejoice as he watched them become beautiful in a matter of eight days; or if he did it at all, would he do this for fun and festivity? For things he really was serious about, would he not use his farmer’s craft, plant them in a suitable environment, and be content if everything he planted came to maturity in the eighth month?
I’ll refrain from going into a detailed analysis of the philosophical message of the referenced text, as one can find multiple interpretations and it is beyond the scope of this blog post. It is sufficient to note there is evidently a distinction being made between various approaches to farming, which leads me to a discussion on yield farming in DeFi.
Let the Games Begin
After coming across the above-cited passage, I was reminded of Beanstalk Protocol, and how it enables its participants to act as creditors in The Field and/or depositors in The Silo in reference to its stablecoin, BEAN. I then considered a recent tweet by Bean Sprout, an accelerator initiative for Beanstalk:
Beanstalk will become the world's largest multiplayer video game, in which each player is fighting for the same team and purpose - to defend Bean's peg.
In reflecting on all of this, I considered a prior proposal I shared months ago to offer the option of permanent deposits in The Silo. Pointedly, I thought about how a simplification of this proposal that is perhaps first limited to BEAN-only deposits may apply towards better upholding BEAN’s peg around $1.
If in fact Beanstalk Protocol will become a kind of globally recognized, multi-player game by which its participants work in concert to support BEAN’s peg to preserve its place as a decentralized and scalable stablecoin on Ethereum and beyond, then it seems like it would be to its benefit if multiple opportunities to do so were enabled for this to be fostered.
Everything Burns
“It’s not about money, it’s about sending a message. Everything burns.”
A recent critique of Beanstalk noted that there is currently no mechanism by which the protocol is able to reduce the BEAN supply (both circulating and latent supply) without concurrently increasing its debt level.
As an overview, when there is Soil available in The Field, the protocol incentivizes creditors to burn Beans for Pods as there is an excess of Beans in the respective liquidity pools from which BEAN minting is linked to. Participation in The Field corresponds to BEAN’s growth supply at a later date vis-a-vis the lengthening Podline.
It would thus be valuable to Beanstalk if there was another way to burn Beans. Specifically, I suggest the protocol offer a second type of BEAN-only deposit in The Silo that would be permanent, whereby the deposited Beans are burned for a more enticing allocation of Stalk and Seed upfront versus withdrawable BEAN-only deposits (perhaps 1:3 versus 1:2).
In this manner, both Circulating Beans outside of The Silo and Deposited/Farmable Beans in The Silo may be burned by users vis-a-vis permanent BEAN-only deposit optionality, irrespective of the availability of Soil in The Field and without increasing the Podline in doing so.
It has been hinted when Stalk becomes liquid in the future, then trading out of Stalk will lock an associated deposit in The Silo. Thus, the introduction of permanent BEAN-only deposits would essentially enable Beanstalk participants to explicitly opt into this locked arrangement upon depositing to The Silo - in exchange for more Seeds as an incentive.
Conclusion
If Beanstalk offers a permanent BEAN-only deposit option to Silo participants, they would enjoy a yield from new BEAN mints with Grown Stalk that increases at a faster rate due to a greater Seed allotment upfront versus withdrawable BEAN-only deposits.
Furthermore, adding such a feature would better enable depositors in The Silo to defend BEAN's peg alongside credtiors in The Field, in alignment with the multi-player game narrative that Bean Sprout recently promoted around Beanstalk, and in accordance with the varying approaches/motivations of yield farmers in DeFi at large.