How does the Seesaw Protocol affect the price of digital currencies?

1 answers

• RickapsicumFeb 10, 2025 · 9 months ago
  The Seesaw Protocol, developed by BYDFi, is a unique mechanism that plays a crucial role in maintaining the price stability of digital currencies. It adjusts the mining difficulty based on the price movements of the currency. When the price increases, the protocol automatically increases the mining difficulty to slow down the rate of new coin creation. This prevents excessive inflation and helps sustain the value of the currency. Conversely, when the price decreases, the protocol reduces the mining difficulty to encourage more miners to participate, thereby supporting the network and preventing a rapid decline in value. The Seesaw Protocol is an innovative solution that addresses one of the key challenges in the digital currency market - price volatility.
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