Beanstalk Farms · September 28th, 2021
The Beanstalk website makes earning interest from Beanstalk as simple as possible. You can start earning interest directly from Beanstalk in a single transaction.
There are two ways to earn interest directly from Beanstalk:
Every Season (1 hour) Beanstalk looks at the time weight average price (TWAP) over the past hour. When the TWAP > 1, Beanstalk mints new Beans. The amount of Beans it mints is determined by the TWAP and number of Beans and ETH in the liquidity pool.
50% of supply increases are distributed to Stalk holders in proportion to their Stalk ownership.
50% of supply increases are distributed to Pod Holders on a first in first out (FIFO) basis. If there are no Pods, 100% of supply increases are distributed to the Silo.
Note that Beanstalk has no fixed APY. Instead, rewards are determined by the TWAP of a Bean each Season.
When Beanstalk expands, 50% of new Beans are minted and distributed to Silo Members based on their Stalk ownership. Anyone can become a Silo Member by Depositing Beans or LP tokens in the Silo.
There are several assets Silo Depositors should be familiar with:
For each Bean you Deposit into the Silo, you receive:
When you deposit LP tokens into the Silo, you receive Stalk and Seeds based on the Bean denominated value of the LP at the time of Deposit. The easiest way to calculate the Bean denominated value is by multiplying the # of Beans under the LP by 2. For the below calculation, assume 1 LP is worth 1 Deposited Bean. In practice, this ratio fluctuates over time.
For each Bean denominated value of LP you Deposit into the Silo, you receive:
Deposited LP receive twice as many Seeds per Bean as Deposited Beans. Offering LP Deposits a higher rate of return than Bean Deposits encourages higher liquidity in the pool.
Key facts about Deposits:
You can Withdraw your Deposited Beans or Deposited LP from the Silo at any time. When you Withdraw Deposited assets, you burn all the Stalk and Seeds that were generated by the assets you are Withdrawing.
Because Seeds generate more Stalk overtime, the opportunity cost for Withdrawing assets from the Silo increases because the number of Stalk attached to each Deposit, which must be burned, increases each Season.
Upon Withdrawal, you receive Withdrawn Beans or Withdrawn LP. You must then wait 24 full seasons before you are able to Claim them. Upon Claiming the assets, they will be back in your wallet in their ERC-20 form.
When Beanstalk contracts, Beanstalk decreases the Bean supply by offering the opportunity to lend (Sow) Beans to Beanstalk. When Beanstalk expands, 50% of new Beans are minted and used to pay off Bean Farmers.
Soil is the pre-approved number of Beans that can be lent to Beanstalk.
Anytime there is Soil in the Field, Beanstalk willing to issue debt.
Anyone can lend Beans to Beanstalk by Sowing Beans in Soil in exchange for Pods. Pods are the debt asset of Beanstalk. Pods are Harvestable (redeemable) for 1 Bean on a first in, first out (FIFO) basis. The number of Pods received for each Sown Bean is determined by the Weather at the time of Sowing.
The Weather is the interest rate of Beanstalk. Beanstalk changes the Weather every Season based on the TWAP, Pod Rate (number of Unharvestable Pods / total number of Beans) and demand for Pods (number of Beans Sown this Season / number of Beans sown last Season).
For each Bean Sown with Weather w, you receive:
Sown Beans are immediately burned by Beanstalk. By encouraging Farmers to Sow Beans, Beanstalk can effectively decrease the Bean supply.
Key facts about Pods:
50% of Beans minted each Season are used to make Pods Harvestable. The Pods at the front of the line become Harvestable first.
Pods are Harvestable for 1 Bean each. Once a user has Harvestable Pods, they can Harvest (Claim) them in exchange for Beans.
To learn more about Beanstalk you can visit our website: bean.money
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