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:
The algorithm’s initial target starting rate is .20 (1/100,000 of BTC’s all time high)
If the price moves beyond a 5% margin above or below the target rate, it will vote for inflation or deflation accordingly.
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.
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.
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.