RE: DAO Deposits Stable Coin to HBD Savings, using Interest to buy & burn DEC daily

I don't understand how the 20% is earned. Is it newly created HIVE or does it come from fees? I also don't understand how the peg at 1$ is maintained. To me it sounds unbelievable that a system that pays out 20% APR and holds an a peg at 1$ by algorithm can be safe and ungameble. I feel we put the DAO assets at risk and 50% is too much. Can anybody untie the knot in my belly with a good explanation ? :)