What is the voting algorithm, and how does it work?
The voting algorithm is the easiest way to participate in the Dynamic Peg’s voting/consensus. It will vote for a healthy price based on current market conditions, without the user having to vote manually.
Note: This algorithm is one of several voting options. It will ONLY have an effect on the supply/price if the majority of users choose to select it as a voting option. The algorithm’s initial target price 1/100,000 of Bitcoin’s All Time High (0.20) solely exists to activate its functions, and is NOT a fixed or guaranteed price target.
Below is a visual example of how the Dynamic Peg algorithm works:
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The algorithm’s initial target starting rate is .20 (1/100,000 of BTC’s all time high)
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If the price moves beyond a 5% margin above or below the target rate, it will vote for inflation or deflation accordingly.
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If the price (of either BAY or BTC) moves up to 3x the previous floor (i.e. .60) and remains there for 3 consecutive days, the target will increase by 1.5 times to adapt.
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Switching back to manual voting is as simple as the click of a mouse. Without an algorithmic oracle, manipulators will incur extreme risk trying to manipulate price in their favor for any significant length of time.
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With this unique voting system, BitBay can change algorithms to test new ideas without requiring a hard fork. Hypothetically, once enough data has been collected and a series of reputable algorithms are found, the human element could be removed entirely. Users can also design their own custom voting algorithms for personal use.
*** COMING SOON: BitBay’s custom algorithm option! Users will soon be able to cast votes based on their favorite TA indicator.