  Decentralized Finance (DeFi) has reshaped the possibilities of reserve
banking in the form of the Collateralized Debt Position (CDP). Key to the
safety of CDPs is the money supply architecture that enables issued debt to
maintain its value. In traditional markets, and with respect to the United
States Dollar system, interest rates are set by the Federal Reserve in an
attempt to influence the effects of excessive inflation. DeFi enables a more
transparent approach that typically relies on interest rates or other debt
recovery mechanisms being directly informed by asset price. This research
investigates contemporary DeFi money supply and debt management strategies and
their limitations. Furthermore, this paper introduces a time-weighted approach
to interest rate management that implements a Proportional-Integral-Derivative
control system to constantly adapt to market activities and protect the value
of issued currency, while addressing observed limitations.
