PIP: 8 Title: Adjust Conversion Supply Schedule Layer: Consensus (hard fork) Author: David Johnston <[email protected]> Paul Snow <[email protected]> Steven Masley <[email protected]> Comments-Summary: No comments yet. Comments-URI: https://github.com/pegnet/pips/wiki/Comments:PIP-0008 Status: Draft Type: Standards Track Created: 2020-01-16 License: BSD-2-Clause
With the limit set to 5000 PEG converted per block, Arbitrage is limited and cannot ensure that pegged assets maintain their value in the market. This proposal allows the conversion limit to be raised to ensure enough pegged assets can be converted to PEG to allow arbitrage.
The OPR records will be updated to include the market price of pAssets that have sufficient volume. To begin with this will be pUSD
If all the reported pAssets are below their reference value by at least 1 percent, the PEG conversion limit will be raised 500 PEG. The limit continue to be raised until the pegged assets are at or above 1 percent their reference value. There is a limit of 288 blocks of growth, (500 * 288) + 5000.
If all the reported pAssets are at or above 1 percent of their reference value, then the conversion limit will be reduced 500 peg per block until the PEG limit of 5000 PEG per block is restored.
Ultimately the value of PEG depends on the pegged assets ability to track their reference values. If all assets are below their reference values, then aribtrage requires some asset at market value. PEG floats on the market, so it will be at market value.
However, if the pegged assets maintain the the price of their reference values, the limit will ensure that the supply does does not overrun the payments to miners. Furthermore, as pegged assets are assured of holding their reference value, PEG can be liquidated through pegged assets and thus will hold their value.