Aias and Buba sat at their usual table under the shade of an old fig tree, their drinks perspiring against the humid air. Buba swirled his lemonade, watching Alias as he scribbled figures in his notebook, his expression a mix of curiosity and skepticism.
"Alright, Alias, you’ve explained this before, but humor me," Buba said, leaning in. "You say the lotteries aren’t just a way to get people interested in $PEG, but that they actually make the whole Pegged system work. How?"
Alias had been waiting for this question. He turned his notebook toward Buba, revealing a simple diagram—arrows looping into each other like a self-sustaining current.
"Because they create the flywheel effect, Buba," Alias said. "It’s not just about having a lottery. It’s about setting a process in motion that feeds into itself, getting stronger with each cycle."
Buba frowned. "Go on."
Alias tapped his pen against the page. "Let’s start simple. The moment people begin using $PEG, it gains velocity. Unlike government money, where transactions are taxed at every level, in the Pegged system, nothing is taken when people transact. Every $PEG you send is every $PEG received—pure movement, no friction."
Buba nodded slowly. "Alright, I get that. People don’t lose anything by using it."
"Exactly. But now comes the crucial part—the lotteries," Alias continued. "This is where the flywheel starts turning. When people participate in a lottery, a small fraction of their inlays is retained—not as a fee, not as a tax, but as a stabilizing mechanism for the $PEG reserve pool. The bigger that pool gets, the more stable $PEG becomes."
Buba exhaled. "So the lotteries aren’t just about paying out prizes. They’re actually reinforcing the stability of $PEG?"
Alias nodded. "That’s the trick. And here’s where the magic happens: as $PEG gets more stable, more people use it. And as more people use it, more people naturally participate in the lotteries. And as more people participate, the pay-out ratio improves."
Buba narrowed his eyes. "Wait, explain that last part."
Alias flipped to another page, sketching a rough graph. "Traditional lotteries—state lotteries—are predatory. They keep most of what people put in, paying out just enough to keep people playing. In the beginning, our payback ratio might be modest, maybe 60-70%—already better than most traditional lotteries. But as the $PEG pool grows, we can increase that ratio, hitting 80%, 90%, even higher. That means people aren’t just gambling—they're participating in something where the returns get better over time, and winners accumulate an increasing proportion of winnings in the form of $PEG, which further encourages it's circulation."
Buba let out a low whistle. "So the more stable the currency, the better the lottery gets. And the better the lottery gets, the more people want to use $PEG."
Alias smirked. "Exactly. That’s the "flywheel effect" that is the basis for the whole Pegged system. People start using $PEG because it’s frictionless. Then they see the lotteries have better odds than any other system. So they participate. That participation grows the reserve, which makes $PEG more reliable, which makes more people use it, which makes more people play, which makes the pay-out ratio improve. And so on, and so on."
Buba drummed his fingers against the table, staring at the notebook. "And what happens when the flywheel is spinning fast enough?"
Alias leaned back, a satisfied glint in his eye. "Then the system sustains itself. It no longer needs me. No longer needs anyone. It just runs."
Buba chuckled, shaking his head. "You really think people will just... move into this on their own?"
Alias took a sip of his coffee. "People don’t need ideology, Buba. They need better odds. They need stability. They need something that makes sense. They don’t have to believe in it. They’ll just see the numbers. And numbers don’t lie."
Buba sat back, exhaling. "Alright. I see it now. This isn’t just about lotteries. It’s about motion. A system that feeds itself."
Alias nodded. "A system that cannot be stopped once it starts."
