Crop Ratio Changes
To read more about the Crop Ratio in context, see Optimizing Liquidity Distribution via the Seed Gauge System
The Crop Ratio is the ratio of the Seeds per PDV reward between Deposited Pinto and the Deposited LP token with the most Seeds (which is determined by the LP token with the highest Gauge Points per PDV).
In order to adjust the Crop Ratio, in practice the protocol adjusts a scalar (the Crop Scalar, ) between 0 and 1, where 0 results in the minimum Crop Ratio () and 1 results in the maximum Crop Ratio (). Therefore, the target maintenance mechanism can adjust the Crop Ratio independently of the minimum and maximum values (which are currently set to 50% and 200%, respectively).
At the beginning of each Season, the protocol changes the Crop Scalar depending on its position (price, debt level and liquidity level) with respect to its ideal equilibrium.
Considering the current state and the liquidity level, the protocol adjusts the Crop Scalar to move toward the optimal state.
In any Season where it is Raining, the Crop Scalar becomes 0 and the Crop Ratio is set to 33.33%.
Excessively Low Liquidity Rate
No matter the liquidity level, when the price is excessively high, the protocol should maximally incentivize Converting to LP Deposits by aggressively decreasing the Crop Ratio.
When the Liquidity Rate is excessively low, in all cases, the protocol should be similarly aggressive in incentivizing Converts to LP Deposits by quickly reaching the minimum Crop Ratio.
Reasonably Low Liquidity Rate
When the Liquidity Rate is reasonably low and Pod Rate is low, the protocol should be similarly aggressive in reaching the minimum Crop Ratio given that, at the margin, the protocol would rather take on debt than lose liquidity. When the Liquidity Rate is reasonably low and Pod Rate is high, the protocol should gradually increase the Crop Ratio when P > 1 (to incentivize Conversions above peg) and gradually decrease it when P ≤ 1 (to incentivize Conversions below peg).
Reasonably High Liquidity Rate
When the Liquidity Rate is reasonably high and P < 1, the protocol should similarly gradually increase the Crop Ratio to incentivize Converting from LP Deposits to Pinto Deposits, and vice versa when P > 1.
Excessively High Liquidity Rate
When the Liquidity Rate is excessively high, the protocol should be more willing to accept a loss of liquidity rather than an increase in debt level at the margin. Therefore, it should adjust the Crop Scalar just as it does when L2SR is reasonably high, except it can be slightly more aggressive when P < 1 and the Pod Rate is high.
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