Root is a permissionless fungible wrapper that enables collective farming for Beanstalk Silo Deposits.
Beanstalk’s credit based stability model is a potential solution to the stablecoin carrying cost problem plaguing DeFi. Whereas other stablecoin protocols rely on collateral to issue stablecoins, which creates centralization and carrying costs, Beanstalk uses infinitely scalable decentralized credit to create a permissionless stablecoin, Bean, that has carrying costs competitive with off-chain fiat.
While Bean is an ERC-20 Standard token, in order to receive Beanstalk-native passive interest, Beans must be Deposited in the Silo, directly or wrapped in whitelisted LP tokens. However, Silo Deposits have two qualities that make them non-fungible: the Stalk and Seeds per Bean Denominated Value (BDV) of each Deposit. The non-fungibility of Silo Deposits appears necessary to Beanstalk’s peg maintenance mechanism, but comes at the cost of composability.
Composability is one of the core value propositions of blockchains. In order to facilitate composability, there are a variety of Ethereum token Standards that are widely adopted by various DeFi protocols. The ERC-20 Standard is the benchmark fungible token standard of the Ethereum network. Root is an Ethereum-native permissionless wrapper that implements the ERC-20 token Standard to create fungibility and composability for Beanstalk Silo Deposits.
{% hint style="danger" %} Root is dependent on Beanstalk, and therefore inherits all of the risks associated with Beanstalk. The security of Beanstalk is assumed. For an exhaustive list, consult the Beanstalk whitepaper and Beanstalk DAO Disclosures. {% endhint %}
{% hint style="warning" %} Note: the Root Token documents are still under development and will be updated in the coming weeks. For the official documentation, please refer to the whitepaper. {% endhint %}