Temperature

MelonFarm relies on a decentralized set of creditors to maintain Melon price stability. Anytime MelonFarm is willing to issue debt, it issues Soil. Soil represents the number of Melons that MelonFarm is currently willing to borrow. Loans to MelonFarm are issued with a fixed interest rate, known as Temperature. If the Temperature is 500%, 1 Melon can be Sown in exchange for 6 Pods. Once those Pods become Harvestable, they can be Harvested in exchange for 6 Melons.

At the beginning of each Season, MelonFarm changes the Maximum Temperature depending on its position (price and debt level) and current state (direction and acceleration) with respect to its ideal equilibrium.

Direction

The current state of MelonFarm is in part determined by the direction of change with respect to ideal equilibrium.

The direction of change of MelonFarm with respect to ideal equilibrium is considered either toward or away from ideal equilibrium, based on the current debt level and the deltaSupply over the previous Season.

When the deltaSupply over the previous Season is > 0, debt is paid back. Therefore, if there is more debt than optimal, MelonFarm is moving toward the ideal equilibrium. If there is less debt than optimal, MelonFarm is moving away from the ideal equilibrium.

When the deltaSupply over the previous Season is < 0, debt can only increase or remain constant. Therefore, if there is more debt than optimal, MelonFarm is moving away from ideal equilibrium. If there is less debt than optimal, MelonFarm is moving toward ideal equilibrium.

Demand for Pod

Demand for Pod is a factor in the acceleration of MelonFarm with respect to ideal equilibrium, which affects Maximum Temperature changes. Demand for Pod is considered decreasing, steady, or increasing.

• The number of Sown Melons each Season indicated demand for Pod over the course of that Season.

• Pod Demand is calculated as the rate of the number of remaining Soil that is available to purchase and the number of Soil available at the beginning of that Season.

Based on this ratio of Pod Demand:

• If Pod Demand < 10%, demand for Pod is increasing.

• If 10% ≤ Pod Demand < 50%, demand for Pod is steady.

• If >= 50%, demand for Pod is decreasing.

Current and Optimal State

Based on a combination of MelonFarm's direction and Pod demand, MelonFarm has six potential current states:

• Accelerating away from ideal equilibrium;

• Accelerating toward ideal equilibrium;

• Steady away from ideal equilibrium;

• Steady toward ideal equilibrium;

• Decelerating away from ideal equilibrium; and

• Decelerating toward ideal equilibrium.

MelonFarm's optimal state is that which moves MelonFarm toward ideal equilibrium in the healthiest fashion, given the current position.

When the debt level is excessively high or low, an optimal state is accelerating toward ideal equilibrium. When the debt level is reasonably high or low, an optimal state is either steady or decelerating toward ideal equilibrium.