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. 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.
Root is designed as a rent-free public good that can support many types of permissionless markets. Rent comes not only in the form of non-zero platform fees, but also in the requirement to use money with negative-carry costs. Instead of rent-based markets, markets denominated in Roots facilitate a new zero-fee, positive-carry market structure.