This is a great question and someone asked it on the Bluesound forum and the helpdesk's response was controlling the volume using the application should not negatively affect the sound quality. In other words, there's no "bit-stripping". I have also compared controlling the volume between the app's volume control and my preamp and couldn't hear a difference. With all that said, I still always set the volume at max on the app and control it from the preamp, just as a matter of principle.