Just to make sure I understand correctly...

By being able to change the liquid supply, we can manipulate the spot price. This shouldn't affect market cap, however, because we're decreasing the supply to increase the spot price, and increasing the supply to decrease spot price. Since market cap = (supply x spot price), in theory, we should be able to keep the price constant.

My questions:

1. At what frequency is the liquid supply updated? It's not uncommon for crypto to have ±10% in a few minutes, and this could be troublesome for a consistent peg.
2. Is voting really going to be effective enough to keep track? It seems like it would be a full time job to constantly adjust the liquid supply manually.
3. Does the existence of illiquid supply affect the demand in any passive way? The dynamics here seem complex.
4. Will we ever get into a situation where BAY will be locked away indefinitely, in a sort of "checkmate" between keeping the peg consistent, and the inevitability of a drop in demand if the peg were to change (to release illiquid funds)?