When the Bean price is above peg (i.e., deltaB is positive), Deposited Beans may be converted to Deposited BEAN:3CRV LP while retaining grown Stalk from Seeds. This conversion allows the Silo Member to add Beans to liquidity pools, which has the practical effect of selling Beans above peg. In doing so, Beanstalk incentivizes Silo Members to grow liquidity for Beans at the expense of additional Bean mints, as the Bean price is decreased back towards peg.
When the Bean price is below peg (i.e., deltaB is negative), Deposited BEAN:3CRV LP may be converted to Deposited Beans without forfeiting grown Stalk from Seeds or any Stalk due to LP impermanent loss. This conversion allows Silo Members to remove excess Beans from liquidity pools and increase the price back towards peg without leaving the Silo, minimizing debt issuance.
In order for a given Conversion to be added to the Convert Whitelist, Beanstalk requires:
- 1.The From token address;
- 2.The To token address;
- 3.Conditions under which the From token can be converted to the To token; and