Shoppers on Safex.Market may have noticed that most items listed for sale are priced in a set national currency (eg. USD, CAD, GBP, etc.) and that the SFX price fluctuates as the trading price of Safex Cash changes on crypto exchanges (eg. Xcalibra).
So what is a Price Peg, and how does it work? Let’s explore further.
Price Peg is a Safex Blockchain function that allows items to be listed for sale in a currency other than Safex Cash. The purchase transaction still occurs in Safex Cash, but the amount of SFX needed to buy the item can fluctuate, depending on the trading price of SFX vs the other currency.
In order to achieve this, the Price Peg must be constantly maintained by a Price Oracle.
A Price Oracle is a service that monitors the price of SFX versus the paired currency of the peg, and maintains a Price Peg of SFX against that currency. It allows merchants to list their products at a set Pegged Price (eg. sell a tea cup for US$25), and as the SFX trading price changes, the Price Oracle periodically adjusts the Peg, to ensure buyers pay the equivalent amount of SFX for the price the item is pegged to.
There are already several Price Oracles operating for SFX. A list of current pegs is maintained by a Safex community member who runs the Safex Ninja website: https://safex.ninja/pegs
As you can see on that site, price pegs already exist for USD, CAD, GBP, AUD, CNY, EUR, along with Gold and Silver prices.
Depending on the way the Oracle calculates the value of SFX, there may be a variance between different peg providers. If you observe the two USD pegs in the above screenshot, you will note the day1oracle price of ~377 SFX per US$1, whereas the Safex Ninja-peg price is ~385 SFX per US$1. This difference is based on the various methods of determining the peg.
Day1oracle indicates in the peg description that it uses a $5,000 depth of the order book on Xcalibra exchange, whereas Safex Ninja explains their method on that webpage.
This difference in calculation explains the slight difference in price peg values for the same currency.
It is entirely up to each individual Merchant to decide which price peg they choose to use (if any), and allows them to list goods and services on the Safex Marketplace in their native currency, or target sales region.