What are your thoughts on a situation where the national currency is also highly inflationary? 40% annual inflation would still require numerous price adjustments and would be challenging to automate in this way.

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Not challenging at all. Poll your price Oracle as often as you want, even every 30 seconds. Update prices automatically in response.

Of course, but if your $5 peg is getting inflated away, the peg is what needs increased frequency of updating.