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An alternative to the conventional potentiometer for controlling the value of a parameter; it is used with microprocessor-controlled synths. Whenever the knob of a rotary encoder is turned, the encoder sends signals to the microprocessor indicating how much the knob was moved and in which direction. Unlike conventional pots, a rotary encoder has no stops and can be turned indefinitely in either direction.

Rotary encoders have some advantages for synths with patch memory. On most synths with patch memory and pots for parameter control, when a patch is recalled from memory, the parameter values bear no relationship to the current settings of the parameter pots on the panel. If the performer desires to change a parameter, as soon as the knob is moved a small amount, the parameter being controlled will "jump" from the patch memorized setting to the current knob value. This is an inevitable result of the fact that pots can only be turned a finite distance. A rotary encode does not have a current setting as such; it only indicates how much it has been moved, and it has no limits on how far it can be turned. So, the microprocessor can add values, which means that when the performer turns the knob, the parameter starts changing from the memorized value instead of jumping.

Rotary encoders are also useful for parameters which have a large range of adjustment. They can allow for parameters to be adjustable over multiple complete rotations of the knob, rather than cramming all of the adjustment range into the 300-degree arc of a typical pot, which makes the adjustment overly sensitive. A rotary encoder can support an "acceleration" method of adjusting a large-range parameter, where the value moves in large jumps when the knob is turned rapidly, and in small increments when the knob is turned slowly. Rotary encoders also have certain advantages in terms of the hardware design of the synth.

The main disadvantage of a rotary encoder is that it provides no visual indication of the current knob setting; the performer cannot look at the performer's knob and determine what the current value is. So it is usually necessary to provide a display of some sort to indicate the value numerically or graphically. Other criticisms focus mainly on the unreliability of some rotary encoder devices; the controlled parameter may move spastically when the knob is turned, or jitter back and forth between two values when the knob is not moving. Or, in some cases, when the knob is turned at a certain speed, the parameter changes in the wrong direction. Rotary encoders are often used in disliked one-knob interfaces, but this is a consequence of poor overall user interface design rather than a limitation of the device itself.