BFP-71: The Path Forward, Barn Raise Structure and Timing

Proposer: Beanstalk Farms

Summary: • Beanstalk will host the Barn Raise, a fundraiser to restore up to $77M in non-Bean liquidity stolen from the Silo, taking place from June 6 to June 27. • NFTs Beanstalk issues during the Barn Raise will receive a pro rata share of one-third of new Bean mints until a 500% Weather is repaid. • One-third of future Bean mints will go towards the NFT holders, one-third to Stalk holders, and one-third to the existing Pod Line. When the debt to the NFT holders has been repaid, the normal minting schedule will resume. • The state of pre-exploit Beanstalk assets will be scaled as a function of the percent of the Barn Raise that is filled. This applies to Beans, Stalk, Seeds, BDV in the Silo and Pods. • Any assets that are recapitalized (Deposited, Withdrawn, Claimable, Circulating) during the Barn Raise will be subject to a vesting schedule based on the percent of the new debt that has been repaid.

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Problem: From Day 1, Beanstalk has been owned solely by members of the Beanstalk DAO via a decentralized, on-chain governance structure. Unfortunately, a bad actor exploited that very structure on April 17 to steal all Silo assets, including ~$77M in non-Bean liquidity. This was an attack on Beanstalk's governance model, not its economic design.

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Proposed Solution:

The Barn Raise

Beanstalk Farms proposes having Beanstalk host the Barn Raise – a fundraiser to restore up to $77M in non-Bean liquidity stolen from the Silo – beginning on Monday, June 6 at 4:00pm UTC and ending on Monday June 27 at 4:00pm UTC.

During the Barn Raise, Beanstalk will borrow up to $77M from lenders in exchange for debt at 500% Weather. To facilitate this, Beanstalk will launch The Barn Raise Collection, an NFT collection with 15,400 items that sell for 5000 USDC each during the Barn Raise, raising up to $77M for Beanstalk’s recapitalization. Each NFT holder will receive a pro rata share of one-third of new Bean mints until a 500% Weather has been realized. Both OTC investors and the community will get the same terms.

NFT rarity will increase with earlier participation in the Barn Raise period. There will also be a rarity boost for BeaNFT holders and participants who have previously interacted with Beanstalk. Details on the art and rarity to come over the next couple weeks.

Large participants who make OTC commitments prior to the official Barn Raise launch will not receive preferential access to rare NFT traits. In the instance that an OTC commitment has been formally made, but on-chain participation is difficult in a timely manner, Beanstalk Farms will allocate the appropriate amount of NFTs to prevent the sale from being oversubscribed.

Unpausing Beanstalk

After the Barn Raise concludes and both the Halborn and Trail of Bits audits complete, Beanstalk can be Unpaused. Between now and then, satisfactory governance measures outlined in The Path Forward document (https://bean.money/blog/path-forward) will be put in place.

Once Beanstalk is Unpaused, one-third of future Bean mints will go towards the NFT holders, one-third to Stalk holders, and one-third to the existing Pod Line. After the debt to NFT holders is fully repaid, the new Bean mint schedule will revert to Beanstalk's original one-half Silo and one-half existing Pod Line allocation.

Capital used to purchase NFTs during the Barn Raise will be used to recapitalize stolen funds pro rata to the Silo. The protocol will scale its obligations based on the amount of capital raised. This means that if X% of the ~$77M is raised, participants will receive X% of their pre-exploit Beans, Stalk, Seeds, BDV in Silo, and Pods. Beanstalk will Unpause with the pre-exploit Weather. The attacker’s balances prior to the exploit will be removed.

Silo Members and Bean holders’ recapitalized assets (Beans, Stalk, Seeds, BDV in Silo) will be placed under a vesting schedule based on the percentage debt repaid to NFT holders. If these users choose to Claim their recapitalized assets before the debt has been fully repaid, they will face a haircut proportional to the amount of the debt repaid. For example, if a Silo Member decides to Claim their recapitalized assets and 50% of the debt has been repaid, they will forfeit their rights to 50% of those assets. Farmable Beans earned from new mints after Unpause are not subject to this vesting schedule.

While raising the full $77M is a sufficient – and ideal – condition of a successful Barn Raise, it is not a necessary one. Because this process is designed to scale the protocol based on the size of the Barn Raise, Beanstalk will be able to Unpause with an arbitrary amount of new liquidity. In practice, raising $0 is the equivalent of restarting Beanstalk from scratch. Therefore, any amount raised is better than nothing. However, at the time of writing, there are confirmed commitments for ~20% of the $77M.

Beanstalk is scheduled to Unpause in early July, pending the completion of the two audits.

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Rationale: Unlike every other non-collateralized stablecoin in history, Beanstalk’s economic model has not failed. Before its governance mechanism was exploited, Beanstalk demonstrated that it can go through growth and contraction periods while still returning to peg. Beanstalk, however, cannot continue in its state prior to the governance attack on April 17.

Beanstalk Farms and the broader Beanstalk community are keen to bring Beanstalk’s key stablecoin innovations to every corner of DeFi, in spite of the attack. A successful Barn Raise is the best path to achieving that.