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 ($0.20) solely exists to activate its functions, and is not a fixed price target.
The algorithm’s voting power depends upon the number of stakers using it.
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.
For the Markets Client:
- Also as a hard-coded rule, voters must remain active with their Markets Client wallets in order to participate in Dynamic Peg voting. One cannot simply unlock their wallet, set a vote preference, and let it run passively forever. Every voter must manually refresh their vote decision after a designated number of votes.
These rules are as follows:
- Manual votes (deflate, inflate, no change) = 10 votes / 4,000 blocks before reset needed
- Algorithmic votes = 20 votes / 4,000 blocks before reset needed
Below is a visual example of how the Dynamic Peg algorithm option works:
*** COMING SOON: BitBay’s custom algorithm option! Users will soon be able to cast votes based on their favorite TA indicator.