BIP-49: Misc Improvements

[nickkatsios]

BIP-49: Misc. Improvements

Proposer

Beanstalk Farms, Brendan Sanderson, Ben Weintraub

Proposer Wallet: 0x4a24e54a090b0fa060f7faaf561510775d314e84

Summary

• Migrate the Fertilizer metadata hosted at fert.bean.money on-chain;
• When $\Delta B_{\overline{t-1}} < 0$, change Soil issued at gm to be the minimum of (1) $|\Delta B|$ calculated using the instantaneous reserves from Multi Flow and (2) $|\Delta B_{\overline{t-1}}|$;
• Implement an Anti λ → λ Convert type that allows any user to decrease a Deposit's BDV if the Recorded BDV (the BDV stored on-chain with the Deposit) is greater than the Current BDV (the number of tokens in the Deposit × the current BDV of the token);
• Change the Chop Rate calculation from the [% recapitalized × % of Sprouts that have become Rinsable] to the [% recapitalized]^2;
• Update the Locked Beans calculation to account for the change to the Chop Rate; and
• Decrease the recapitalization amount upon Chop per BIR-14.

Links

• BIP-49 GitHub PR
• GitHub Commit Hash: 10c50916acdd1a2ea8c3699217779cbbe549389e
• Safe Transaction

Problem

Currently, Fertilizer metadata (the SVG image, traits, etc.) is hosted on centralized infrastructure. In addition to being fundamentally misaligned with the ethos of Beanstalk, any data hosted on centralized infrastructure requires maintenance and is subject to downtime.

Beanstalk is prone to overissuing Soil at gm call because Soil issuance below peg is solely based on $|\Delta B_{\overline{t-1}}|$.

Currently, the Recorded BDV of a Deposit is not necessarily equal to its Current BDV. For example, if a user Deposits BEANETH into the Silo and the USD price of ETH falls significantly (and thus the BDV of BEANETH decreases), the Recorded BDV does not decrease. In practice this means Farmers "lock in" the higher BDV at the time of Deposit such that Beanstalk is over crediting BDV to Deposits relative to their value being contributed to it. Beanstalk only supports Convert types that do not decrease the BDV of the Deposit making it impossible for the BDV associated with a Deposit to ever be corrected.

Currently, Beanstalk offers a conservative Chop Rate of ~1.33% (22.49% recapitalization * 5.9012% of debt repaid to Fertilizer) to Unripe holders. Chopping is beneficial to Beanstalk as its obligations and the amount needed to fully recapitalize Unripe assets decreases. Although the current model is likely to result in the least volatility as Beanstalk is recapitalized (as a result of Unripe holders Chopping later on average), Beanstalk can be more aggressive given its healthy position in terms of L2SR.

Locked Beans are calculated under the extremely conservative assumption that all Unripe LP is Chopped within a single Season.

Currently, when Unripe LP holders Chop, s.recapitalized is unchanged as demonstrated in BIR-14. As a result, the Barn Raise ends earlier than intended, i.e., Beanstalk will not sell enough Fertilizer to fully recapitalize all Unripe LP.

Proposed Solution

On-Chain Fert Metadata

We propose to migrate the Fertilizer metadata hosted at fert.bean.money on-chain.

Specification

• Create a new contract called FertilizerImage.sol to dynamically assemble the SVG image for Active, Used and Available Fertilizer; and
• Modify uri in Internalizer.sol to (1) assemble the required on-chain data, (2) generate the correct Fertilizer image URI using imageUri from FertilizerImage.sol and (3) return the final metadata URI to be consumed.

Soil Issuance Update

We propose to change Soil issued at gm when $\Delta B_{\overline{t-1}} < 0$ to be the minimum of (1) $|\Delta B|$ calculated using the instantaneous reserves from Multi Flow and (2) $|\Delta B_{\overline{t-1}}|$.

Specification

In SeasonFacet/Sun.sol:

• Implement setSoilBelowPeg, which calculates the cumulative deltaB across all whitelisted Wells using the instantaneous reserves in Multi Flow ($|\Delta B|$), compares it to its time weighted counterpart ($|\Delta B_{\overline{t-1}}|$) and picks the minimum of those two values; and
• Update the P < 1 case in stepSun to use setSoilBelowPeg.

BDV Decrease

Implement a new ANTI_LAMBDA_LAMBDA Convert type, callable by anyone, that Converts on behalf of a Farmer and can decrease a Deposit's BDV.

Specification

• Add an additional parameter account in LibConvert.convert(…);
• Add the ANTI_LAMBDA_LAMBDA Convert case to the Convert ladder in LibConvert;
• Reorder the Convert ladder in LibConvert so that more frequently used Converts appear first;
• To conform with previous convertData types, update them to return 0, and add a check that ensures proper use of msg.sender instead of account when applicable;
• In ConvertFacet.convert(…), replace msg.sender in other Convert helper functions with account;
• Check if the ANTI_LAMBDA_LAMBDA Convert is called in ConvertFacet.convert(…), and when it is, update the input Deposit with the Current BDV; and
• Pack all Convert properties in a struct called convertParams in LibConvert for readability and extensibility.

Chop Changes

We propose to:

• Change the Chop Rate calculation from the [% recapitalized × % of Sprouts that have become Rinsable] to the [% recapitalized]^2;
• Change the Locked Beans calculation to assume that up to 75% of Unripe assets are Chopped within a single Season; and
• Decrease the recapitalization amount upon Chop per BIR-14.

Specification

• Remove LibUnripe.getRecapPaidPercentAmount(…) (the percentage paid back to Fertilizer holders) from the Chop Rate calculation;
• Update LibUnripe.getPenalizedUnderlying(…) to calculate the Unripe λ → λ Conversion using the new formula;
• Implement getTotalRecapitalizedPercent(…) to get the US dollar denominated percentage recapitalized by Beanstalk;
• Update getLockedBeansUnderlyingUnripeBean(…) to account for the percent recapitalized percentage instead of the amount paid back to Fertilizer;
• Refactor LibChop.chop(…) to use LibUnripe.removeUnderlying(…) instead of LibUnripe.decrementUnderlying(…) when decreasing the available Ripe underlying amount for the Unripe token after a Chop.

Technical Rationale

The Fertilizer Facet must be updated due to changes to the ERC-1155 token metadata. Hosting the metadata on-chain instead of on centralized infrastructure eliminates any risks associated with uptime.

The Season Facet must be updated due to changes to the deltaB calculation introduced by the Soil issuance change below peg.

The Convert Facet must be updated due to the introduction of ANTI_LAMBDA_LAMBDA.

The Unripe Facet must be updated due to changes to the chop function.

Economic Rationale

Soil Issuance Update

Consider an example where Beanstalk is at -300k deltaB for the first 58 minutes of a Season. At the 58th minute, i.e., 10 blocks before the next gm call, a Farmer buys and Sows 200k Beans, bringing the current deltaB to -100k.

Assuming no other trades in the final 2 minutes of the Season, the Soil issued at gm will be slightly less than 300k, despite Beanstalk only needing 100k Beans to be bought to return to peg. Before Multi Flow, this was necessary for sufficient manipulation resistance. However, thanks to Multi Flow it is now possible for Beanstalk to issue less Soil in these instances without being subject to manipulation.

In general, Beanstalk does not need to be particularly aggressive when issuing Soil—it does not want to issue debt if it doesn't have to and would prefer to spend an extra Season below peg over issuing a lot of excess Soil.

Thus, using the inter-block MEV manipulation resistant instantaneous reserves in Multi Flow to calculate deltaB below peg is preferred.

BDV Decrease

The ability to decrease a Deposit's BDV is necessary to prevent Beanstalk from over crediting BDV to Deposits relative to their value currently being contributed to the system. There is no incentive for a Farmer to decrease their own BDV. Thus, the Anti λ → λ Convert is callable by any user.

Chop Changes

Beanstalk can be more aggressive given its healthy position in terms of L2SR. Chopping is beneficial to Beanstalk as its obligations and the amount needed to fully recapitalize Unripe assets decreases.

The Locked Beans calculation must be updated to account for the new Chop Rate calculation. Changing the assumption from 100% to 75% of Unripe assets Chopping within a single Season is still conservative but more realistic.

Ensuring the chop function is implemented as intended is essential to the structure of the Barn approved by the DAO.

Contract Changes

Initialization Contract

The init function on the following InitBipMiscImprovements contract is called:

• 0x2d130cEfa0bf9D1a3e0445c9478503c326F2F8E9

Unripe Facet

The following UnripeFacet is removed from Beanstalk:

• 0xD64BB5c2dBf12fEBeFc6397926A3c0aA6f8b6535

The following UnripeFacet is added to Beanstalk:

• 0xb52af7889b05eF652468E98D249700415a9F587D

UnripeFacet Function Changes

Name	Selector	Action	Type	New Functionality
_getPenalizedUnderlying	0xa84643e4	Remove	Read
getRecapitalized	0xe68a543a	Add	Read	✓
addMigratedUnderlying	0x787cee99	Replace	Write
addUnripeToken	0xfa345569	Replace	Write
balanceOfPenalizedUnderlying	0x1acc0a47	Replace	Read
balanceOfUnderlying	0x1be655e8	Replace	Read
chop	0x9a516cad	Replace	Write
getLockedBeans	0x087d78b4	Replace	Read
getLockedBeansFromTwaReserves	0x7caa025f	Replace	Read
getLockedBeansUnderlyingUnripeBean	0xbfe2f3be	Replace	Read	✓
getLockedBeansUnderlyingUnripeLP	0x33f37f27	Replace	Read
getPenalizedUnderlying	0x6de45df2	Replace	Read
getPenalty	0x014a8a49	Replace	Read
getPercentPenalty	0xbb7de478	Replace	Read	✓
getRecapFundedPercent	0x43cc4ee0	Replace	Read
getRecapPaidPercent	0xab434eb7	Replace	Read
getTotalUnderlying	0xadef4533	Replace	Read
getUnderlying	0x9f06b3fa	Replace	Read
getUnderlyingPerUnripeToken	0xb8a04d1b	Replace	Read
getUnderlyingToken	0x691bcc88	Replace	Read
isUnripe	0xfc6a19df	Replace	Read
pick	0x13ed3cea	Replace	Write
picked	0xd3c73ec8	Replace	Read
switchUnderlyingToken	0xa33fa99f	Replace	Write

Convert Facet

The following ConvertFacet is removed from Beanstalk:

• 0xEb1b833D3E81cb3d390514cabB9b809E6170626C

The following ConvertFacet is added to Beanstalk:

• 0x2604D728D8c6918b8C427bF42aa2ed07ceB5cf23

ConvertFacet Function Changes

Name	Selector	Action	Type	New Functionality
convert	0xb362a6e8	Replace	Write	✓

Convert Getters Facet

The following ConvertGettersFacet is removed from Beanstalk:

• 0x8ABa09526dc6EB6Ea44eE3f8745dD8bc9EF744E2

The following ConvertGettersFacet is added to Beanstalk:

• 0x09D466663586292F5f0c1D99e9547A7A81E887f5

ConvertGettersFacet Function Changes

Name	Selector	Action	Type	New Functionality
getAmountOut	0x4aa06652	Replace	Read
getMaxAmountIn	0x24dd285c	Replace	Read

Season Facet

The following SeasonFacet is removed from Beanstalk:

• 0x92458b7ade7798c45E5ff583c353F70F950d66Cf

The following SeasonFacet is added to Beanstalk:

• 0x51F74C024936E296132c6F4E59b9EEd677eb3B1c

SeasonFacet Function Changes

Name	Selector	Action	Type	New Functionality
gm	0x64ee4b80	Replace	Write	✓
seasonTime	0xca7b7d7b	Replace	Read
sunrise	0xfc06d2a6	Replace	Write

Season Getters Facet

The following SeasonGettersFacet is removed from Beanstalk:

• 0x5A1675f3156c9e73D7eA20eb58470A0002865E85

The following SeasonGettersFacet is added to Beanstalk:

• 0x9fd4daD032324bC569decC3795731aEC309c2923

SeasonGettersFacet Function Changes

Name	Selector	Action	Type	New Functionality
abovePeg	0x2a27c499	Replace	Read
calcGaugePointsWithParams	0xeedc7ab9	Replace	Read
getAverageGrownStalkPerBdv	0x7ba6cbf8	Replace	Read
getAverageGrownStalkPerBdvPerSeason	0xeb0e1215	Replace	Read
getBeanEthGaugePointsPerBdv	0xd1db56b8	Replace	Read
getBeanGaugePointsPerBdv	0x69aa7e02	Replace	Read
getBeanToMaxLpGpPerBdvRatio	0xcc88d4f9	Replace	Read
getBeanToMaxLpGpPerBdvRatioScaled	0x673c75f0	Replace	Read
getDeltaPodDemand	0x64b3496b	Replace	Read
getGaugePoints	0x93523425	Replace	Read
getGaugePointsPerBdvForToken	0x64887852	Replace	Read
getGaugePointsPerBdvPerWell	0xb2b0556d	Replace	Read
getGaugePointsWithParams	0x141933bf	Replace	Read
getGrownStalkIssuedPerGp	0xf98da2de	Replace	Read
getGrownStalkIssuedPerSeason	0x383f170f	Replace	Read
getLargestLiqWell	0xd1943f7f	Replace	Read
getLiquidityToSupplyRatio	0xcb2d0a3c	Replace	Read
getPodRate	0xcce813a1	Replace	Read
getSeedGauge	0x6af8e5a4	Replace	Read
getSopWell	0x7d23804d	Replace	Read
getTotalBdv	0x50539159	Replace	Read
getTotalUsdLiquidity	0xbbf459a7	Replace	Read
getTotalWeightedUsdLiquidity	0xf788b47c	Replace	Read
getTwaLiquidityForWell	0xa13a3742	Replace	Read
getWeightedTwaLiquidityForWell	0x93c9e531	Replace	Read
paused	0x5c975abb	Replace	Read
plentyPerRoot	0xe60d7a83	Replace	Read
poolDeltaB	0x471bcdbe	Replace	Read
rain	0x43def26e	Replace	Read
season	0xc50b0fb0	Replace	Read
sunriseBlock	0x3b2ecb70	Replace	Read
time	0x16ada547	Replace	Read
totalDeltaB	0x06c499d8	Replace	Read	✓
weather	0x686b6159	Replace	Read
wellOracleSnapshot	0x597490c0	Replace	Read

Fertilizer Facet

The following FertilizerFacet is removed from Beanstalk:

• 0x729672c68134E2DF0CdD36D3296841A2993534c7

The following FertilizerFacet is added to Beanstalk:

• 0x9586878Ea437CBB6D4b6381Bde7B064f531CfB77

FertilizerFacet Function Changes

Name	Selector	Action	Type	New Functionality
getTotalRecapDollarsNeeded	0x12cb5eab	Add	Read	✓
_getMintFertilizerOut	0x94daa221	Replace	Read
balanceOfBatchFertilizer	0x304ec65d	Replace	Read
balanceOfFertilized	0xb6f42085	Replace	Read
balanceOfFertilizer	0x1799b3b2	Replace	Read
balanceOfUnfertilized	0x1edb6be1	Replace	Read
beansPerFertilizer	0x9bb4e35a	Replace	Read
beginBarnRaiseMigration	0xe3d4e44c	Replace	Write
claimFertilized	0x83e08888	Replace	Write
getActiveFertilizer	0xdc6ba285	Replace	Read
getBarnRaiseToken	0xf255da60	Replace	Read
getBarnRaiseWell	0x93a39bea	Replace	Read
getCurrentHumidity	0x39448802	Replace	Read
getEndBpf	0xc85951a1	Replace	Read
getFertilizer	0x9c45a1d5	Replace	Read
getFertilizers	0x34af5416	Replace	Read
getFirst	0x1e223143	Replace	Read
getHumidity	0x29130a66	Replace	Read
getLast	0x4d622831	Replace	Read
getMintFertilizerOut	0x69744dd0	Replace	Read
getNext	0xf4a057e2	Replace	Read
isFertilizing	0x6ae1c014	Replace	Read
mintFertilizer	0x363591d0	Replace	Write
payFertilizer	0xd47aee59	Replace	Write
remainingRecapitalization	0x4a16607c	Replace	Read
totalFertilizedBeans	0x4f9a9678	Replace	Read
totalFertilizerBeans	0xf9c4ebde	Replace	Read
totalUnfertilizedBeans	0xa3ef48c9	Replace	Read

Event Changes

None.

Beans Minted

None.

Audit

The commit hash of this BIP is 10c50916acdd1a2ea8c3699217779cbbe549389e.

An audit competition of this upgrade was held via Codehawks using commit hash 662d26f12ee219ee92dc485c06e01a4cb5ee8dfb. The final report can be read here.

Audit remediations were committed and documented in PR #943. All changes were reviewed by Cyfrin.

Post Audit Changes

The following changes have been made to the BIP-49 code, but have not been audited:

• Updated the constants in LibLockedUnderlying to reflect the change in the Locked Beans calculation;
• Updated the Beans per Fertilizer remaining calculation in Fertilizer/Internalizer.sol used by the Fertilizer SVGs; and
• Updated SeasonGettersFacet.getTotalDeltaB() to calculate the cumulative deltaB across all whitelisted Wells.

Effective

Immediately upon commitment.

[Brean0]

review I

[netlify]

✅ Deploy Preview for beanstalk-ui ready!

Name	Link
🔨 Latest commit	ad09f10
🔍 Latest deploy log	https://app.netlify.com/sites/beanstalk-ui/deploys/66b0c223c3d9980008c487e2
😎 Deploy Preview	https://deploy-preview-802--beanstalk-ui.netlify.app
📱 Preview on mobile	Toggle QR Code... Use your smartphone camera to open QR code link.

---

To edit notification comments on pull requests, go to your Netlify site configuration.

[netlify]

✅ Deploy Preview for basin canceled.

Name	Link
🔨 Latest commit	ad09f10
🔍 Latest deploy log	https://app.netlify.com/sites/basin/deploys/66b0c223438b640008230715