As far as I understand, with the newly proposed parameters the sigmoid curve only introduce an asymptotic property for price ranges outside of [0.92, 1.08] with 1 being the current CPI value. Inside the “normal” price range the new curve will be nearly identical to the current linear one.
I’m in favor of the asymptotic properties for the following two reasons:
- Supply adjustments will be less prone to extreme price jumps
- The oracle infrastructure will be more resilient to faulty values
My understanding of Amples mantra, “moving price volatility to supply volatility”, is that the supply should, whenever possible, be only adjusted for sustainable changes in demand. I think short term price fluctuations don’t need to be translated into supply as this supply adjustment would soon need to be bounced back anyway. @ducc’s visualizations above seem to support this point.
Some more context for community members joining the discussion at some point in the future:
- Visualization of each curve: Desmos | Graphing Calculator
- There was quite some discussion about this proposal during the recent Office Hours. See the summary and the start of the Office Hours.