You have smart ideas.
I can not get out more than 10 bit resolution, that is a limitation of the PIC. Though that is a lot better than the standard 7 bit. I send out 14 bit for the pitch fader and 7 bit for the rest. On 8% 10 bit gives me 0.02 accuracy wich is good enough for me.
The bourns encoder I have is optical and has no dents at all, it is made with a solid shaft and has bearings wich give a bit of smooth resistance.
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