My People

My dad called me recently to tell me he will be installed as the bishop for the local branch of the Mormon church in the neighborhood I grew up in.

I was raised in a deeply Mormon household by immigrants with no extended family in America. I knew I could trust the intentions of other Mormons because they subscribed to a similar belief in cosmological accountability. The members of our local congregation felt like an extension of our family.

With all the benefits that came with the community, I never made an explicit “choice” to opt-in, I just chose not to opt-out. I was anxious about exploring my own beliefs and often suppressed my ability to branch out and reason about my experiences independently.

The internet was a revelation for me in this sense, full of different kinds of emergent communities and virtual ecosystems for me to discover, entering and exiting freely. MMORPG’s like Runescape and Maplestory had guild systems and functioning economies where people could work together and have fun. Facebook, Twitter and Instagram were young products with significantly less network density where I could make friends and interact with them across space and time. I was inspired by the internet’s ability to bring strangers together, allowing them to self-govern and coordinate based on the values of the participants.

These online interactions influenced how I perceived my real-world communities, making me increasingly aware of the constraints associated with my religion. During college, I found that I didn’t feel satisfied by the belief set of my Mormon community anymore, namely:

1. requirement to trust an unverifiable, cosmologically endowed authority

2. and a high social cost for exiting or having divergent views.

After a painful process of disintegration with the community, it dawned on me that moving to Silicon Valley after college might help me find a community of like-minded individuals who wanted to create new internet experiences reminiscent of those of my youth. I got an offer to start a job at a large technology company after school, packed my bags and didn’t look back.

Disillusioned until Ethereum

I learned almost immediately that my peers weren’t necessarily there because they believed in the potential of the internet to facilitate community. The majority of my peers were almost equally religious as my Mormon community, just devoted to a different God: career and wealth. Much of our conversation centered around maximizing total compensation, how to get more visibility, and how to position yourself for a promotion.

A friend suggested I look into cryptocurrencies. I was highly skeptical. I was interested in internet technology, not scams and get rich quick schemes! I generally believed people who worked on cryptocurrencies had low integrity and were the exact type of people I was trying to avoid. She encouraged me to dig deeper and learn more about the underlying technology.

Within the first week of perusing Crypto Twitter, I found the Loot project on Ethereum. I had no idea what was going on, but the NFT reminded me of games I had played on the internet as a kid. The art for the token was a simple text-based rendering of metadata stored on-chain and used a similar naming convention to the MMORPG’s I had played.

I landed in the Discord server and saw strangers on the internet working together to build projects on top of the NFT’s. People were creating and airdropping ERC-20 tokens to holders, contracts that allowed users to mint art in various styles based on their token, and websites specifically designed for token holders of “Divine Robe”.

For a few weeks, I was in rapture. I looked through one NFT project after another, continually taken in by active communities of people who didn't know one another organizing to support their tokens.

As I dove deeper, a troubling pattern emerged - every NFT project had a similar economic structure: 8000 NFT PFPs with various rarity traits in a collection distributed randomly with extremely mid art, and no real desire to create significant use cases beyond usage of a profile picture on Twitter or Discord. The price of the token was totally disassociated from the actual substance of the online community. Were all of these projects scams? I wasn’t hopeful of any of their potential to succeed in the long-term.

Feeling discouraged, I consulted Cypherpunk literature to learn what Ethereum and Bitcoin were all about.

God Protocols?

My perspective of the world shifted dramatically when I left the religion I grew up in; I began to see the religion as a form of social promise or contract, based on trust in an ultimate authority figure, God, to mediate interactions and enforce rules. I also realized that money and economics, which in many ways form the foundation of social life, also rely on social contracts that currently depend on placing ultimate authority in the State to ensure fairness and create opportunities for collaboration at scale.

Reading the God Protocols by Nick Szabo and other documents helped me understand that open network protocols running on the internet have the potential to radically alter economic and social contracts by eliminating the requirement of trust in a third-party authority altogether.

Trust in an ultimate authority who has the ability to manipulate the rules of engagement at their discretion without leaving an option for individuals to exit compromises the ability for individuals to engage with one another fruitfully because:

1. individuals run the risk of getting rug-pulled

2. the process under which the third-party is governed is unclear and opaque, often left to the judgement (and corruption) of the few individuals in power

Because the internet allows for the easy creation of communities unbounded by space, it lowers the costs of entry and exit, and in turn provides a stronger filtering mechanism for like-minded individuals to gather.

I consider myself extremely lucky to be alive now, when computers have become performant enough for decentralized computer networks like Ethereum and Solana to provide the backbone for experimental economic mechanisms which are transparent, verifiable, and execute deterministically, outcompeting antiquated social contracts that require trust in any third-party and opening the door for a host of new social applications.

Enter Beanstalk

A friend sent me the Beanstalk Whitepaper, and I quit my job shortly after reading it. Beanstalk embodied precisely the principles I sought—transparent, verifiable, and deterministic economic rules without opaque central control. Its vision of low volatility money as a social contract governed by an open network inspired me deeply.

I was fascinated by the idea of an immutable debt structure. Debt is fundamentally a social phenomenon and a type of social contract. Because the protocol lives on Ethereum, the market to auction off the debt is open and transparent, the terms of engagement under which the debt is to be repaid are verifiable and the way the system advances the interest rate of debt is deterministic. A sufficiently decentralized set of pseudonymous creditors meant was no way for any party to use power to change the terms of the debt contract.

Dependence on third-parties in other currency models creates an explicit economic cost, most easily recognized by nation-states issuing debt to back a currency or when a business owns a network protocol that issues a stablecoin. In the first case, the state gets access to an infinite well of capital available at the expense of the currency's holders, and in the second, the business has to honor its own legal structure to produce a profit for its shareholders and has unilateral control over the smart contract. In the first case, excess demand for the currency flows to those who can borrow the most, and in the second case, excess demand for the currency flows to the equity value of the business.

Beanstalk was an attempt to tackle a fundamental social contract –money– and make the economic mechanisms which govern it transparent, verifiable and deterministic, without a third-party, while redistributing economic excess back to the users of the currency.

Beanstalk stood in stark contrast to the NFT euphoria I was exploring prior; I saw a real attempt at utilizing the properties of Ethereum to create a new social contract. I held hope about the future of Beanstalk and what it represented to me; a step closer to a world where social contracts run on the internet without requiring an ultimate guarantor.

Pinto Demands an Opportunity at Life

Beanstalk was hacked due to a governance exploit in April 2022. I was devastated like many others who believed in Beanstalk. Yet, the protocol had not failed due to a flaw in its economic design. Some time after the effort to recapitalize Beanstalk, it became clear that the market had crossed beyond a threshold of overwhelming debt to create new bids for protocol debt.

Pinto is a fork of Beanstalk that extends its ideas and includes various improvements to the security and economic efficiency of the protocol. Despite the governance exploit and resulting overwhelming debt burden of Beanstalk, the underlying design principles remain compelling and important. To conclusively determine if the protocol’s open, deterministic and verifiable debt mechanism can sustainably align incentives to create and scale low volatility money, the economic model demands another opportunity at life.

I don’t know if Pinto can generate enough creditworthiness to become a new currency which displaces collateralized stablecoin models and nation-state credit-based currencies, but I believe it is important to try.

I believe a decentralized, pseudonymous group of creditors and value providers all around the world can work together to create stable value on the internet.

An infinite design space awaits us in displacing opaque social contracts which require trust in ultimate authority with new ones that run on the internet in a transparent, verifiable, and deterministic way.

Pinto is a step in the right direction.–Ryan Ham

March 2025