What advantage does BitBay’s Dynamic Peg have over traditional fiat currency management?
The Dynamic Peg has many advantages over fiat currency management systems.
Here are several:
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The Dynamic Peg’s entire monetary supply is controlled by the users themselves vs. a traditional centralized institution. This reduces the effects of self-interests, entity manipulation, corruption, or national government intervention.
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In comparison to fiat currency management, BitBay’s Dynamic Peg can adapt its supply to meet market conditions at a much faster rate. With the available tools, central banks are forced to work on a timeline of 3–24 months to create indirect economic impact, whereas BitBay’s Dynamic Peg continually makes direct impact every few hours.
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Unlike central banks, BitBay’s Dynamic Peg is less influenced by external factors such as unemployment rates, tax rates, interest rates, foreign interests, or other political agendas. It is purely driven by mathematics, game-theory based incentives, and secure democracy.
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With traditional fiat currency management, the rate of supply inflation is widely unlimited. This unrestricted influx of new money entering the economy has often led to severe hyperinflation throughout history.
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BitBay has a variable rate of inflation for its total supply, which is directed solely by neutral mathematics and code. It is currently set at a variable rate between a minimum of 0.25% to a maximum of 2% of the total supply (currently roughly 1.02 Billion BAY), and can only be changed through a consensus of all stakers.
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When BitBay stakers vote on the supply level of Liquid BAY, they are communicating their own demand directly to the Dynamic Peg oracle, which adjusts supply with 100% accuracy. By the time central banks receive communication of their economy’s demand, it has been filtered through countless third-party relays, who collect information over a significant period of time. This makes it extremely difficult for regulators to adjust the supply of fiat accurately or efficiently.
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