Beanstalk

Soil in Beanstalk represents available lending capacity. When Bean trades below $1, the protocol issues Soil as a signal to borrow Beans from the market. Users who Sow Beans into this Soil receive Pods, Beanstalk’s debt tokens, which are repaid in a First-In-First-Out (FIFO) manner. This creates an autonomous credit issuance mechanism that helps reduce Bean supply and restore the price peg without collateral. More details are available on bean.money.

Beanstalk relies on market incentives and algorithmic adjustments instead of collateral. When the price of Bean exceeds $1, the protocol mints new Beans; when it drops below, it offers Soil to borrow and burn Beans. These mechanics adjust supply in real-time, encouraging arbitrage opportunities that bring the price back to its $1 target. The entire model is non-custodial and governed by its DAO via bean.money.

Farmers are active participants in the Beanstalk ecosystem, engaging in Sowing, Harvesting, and Depositing. This metaphor is woven into the protocol's mechanics, where yield-bearing activities mirror farming cycles. Depositing into the Silo grows Stalk and Seeds, while lending to the protocol returns Pods. The farming theme reflects long-term, cyclical engagement and reinforces how users support peg stability. Learn more at bean.money.

Beanstalk is implemented using the EIP-2535 Diamond Standard, which allows it to split its logic into modular components called Facets. Each Facet can be independently upgraded or replaced, offering flexibility, gas savings, and scalability. This architecture avoids the limitations of monolithic smart contracts and ensures Beanstalk can evolve without redeployment. It supports complex features like composability and peg management across contracts. Technical details are available at bean.money.

Pods are Beanstalk’s debt instruments received when users Sow Beans during a supply contraction. They’re repaid in a FIFO queue once conditions allow new Bean minting. The Pod Market is a secondary exchange where Pods can be bought and sold before maturity, offering liquidity and price discovery. This system enables a decentralized and transparent credit layer within Beanstalk, and it’s accessible directly through the interface at bean.money.

Seasons are Beanstalk’s native unit of time, representing roughly one hour intervals. Each new Season begins with a successful execution of the gm function, which triggers key protocol operations. This system ensures decentralized timekeeping and protocol execution without reliance on off-chain schedulers. To incentivize participation, the user who successfully calls gm receives freshly minted Beans as a reward. This structure promotes efficient and timely updates while reinforcing the permissionless ethos of Beanstalk.

The Depot acts as Beanstalk’s gateway for seamless, gas-efficient interactions with other Ethereum-native protocols. It enables users to execute complex DeFi operations in a single transaction by integrating external Pipelines. These Pipelines can be added or modified via governance. This setup significantly reduces friction for users and maximizes the utility of Beanstalk within the broader Ethereum DeFi ecosystem, reinforcing its goal of low-cost and high-composability finance.

Beanstalk is engineered to reduce concentration of power through its unique incentive mechanisms. The Stalk System rewards long-term Deposits while simultaneously diluting older positions over time via the Grown Stalk mechanics. This system creates a natural decentralization of governance influence by distributing more rewards to newer Depositors. Additionally, there's no pre-mine or privileged allocation—Beans are only minted through user participation, ensuring a fair and inclusive environment.

Beanstalk is engineered with efficiency at its core by leveraging both the Pipeline and Depot contracts. These systems allow users to execute complex, multi-step transactions—such as harvesting, converting, and withdrawing—with minimal gas overhead. By batching multiple operations into a single call, users can significantly reduce transaction costs while maintaining high on-chain composability. This design ensures that gas efficiency does not come at the expense of decentralization or user autonomy.

Reward distribution in Beanstalk is governed by the Stalk and Seed system, which determines how newly minted Beans are allocated. Depositors receive Stalk for governance power and yield, and Seeds that grow into more Stalk over time. However, to avoid long-term monopolization, the protocol implements dilution mechanisms—older deposits earn proportionally less new Stalk, balancing the influence of early and new participants. This model encourages continued participation while preserving equity across users.