This past June, BitBay released the Dynamic Peg stablecoin. With the likelihood of overnight crypto millionaires fading, the focus has shifted to crypto’s long term investment potential. One of the biggest talking points against cryptocurrency has been that it’s unstable and the markets are too volatile. Enter stablecoins; A stablecoin is any cryptocurrency “pegged” 1-to-1 with a stable asset; for example, fiat currencies, petrol or gold . Often times stablecoins are linked to a DAO (decentralized autonomous organization), which controls issuance & pricing. They are seen as the way to gain mainstream acceptance.
Like Ethereum, another cryptocurrency, Bitbay has smart contract technology. This technology would enable anyone to do anything from making a secure & unbreakable contract to bartering for goods and services without a third party. Their smart contract technology has already been used to sell land. Now with the Dynamic Peg, Bitbay believes it is at the forefront of stablecoin technology. This Dynamic Peg debuted as open source code in their $Bay coin as a proof of concept developed by founder David Zimbeck. Zimbeck, who is also the founder of Bithalo, is seen as a sort of savior in the crypto community, and is widely considered one of its most talented coders.
“It will increase and decrease the supply to control the price. This can force the price to really be anything and grow at a predictable rate. The decision is made by the investors themselves so it’s completely fair. Also an algorithm is used that will maximize volume and price. ” – David Zimbeck
The way it works is simple; adopt a method of freezing and unfreezing coins to control the price. A frozen coin, which is effectively slowed down rather then actually frozen, can also be used (not spent) as a bond or a future so it retains value, while not as valuable as liquid funds. A global supply rate is set and may decrease or increase by a certain amount daily, or in intervals. The adaptive price control system is not only unique but addresses the cost of fully collateralized stablecoins which makes them difficult to scale. An added bonus is that it is completely decentralized, which also makes the process completely democratic.
The hope is that the Dynamic Peg increases the general public’s trust in cryptocurrency and blockchain technology as a whole. This increase in market penetration would not only reinvigorate coins but “revive any coin from the grave.” Zimbeck wants Bitbay & Dynamic Peg technology to not only change cryptocurrency, but world finances as a whole. He not only challenges the notion that crypto is a bubble but compares it to the early days of the internet; “The news loves to call a correction a bubble. The reason so many people are confused by cryptos rise is because nothing like it has existed before. Like the dot com boom.[sic]” Either way the Dynamic Peg technology is gaining steam & could possibly change the way we see and spend month for the foreseeable future.