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When the Bean price is above peg (i.e., deltaB is positive), Deposited Beans may be Converted to Deposited LP tokens 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 Stalkholders 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 LP tokens may be Converted to Deposited Beans without forfeiting grown Stalk from Seeds or any Stalk due to LP impermanent loss. This Conversion allows Stalkholders 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 Farmer to be able to Convert a Deposited asset to another, that Conversion must be on the Convert Whitelist.
- 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