Thanks a lot for the fast reply. Very helpful.

I'm using a microcontroller with 3.3V logic. How do I hook up the 8Encoder? It seems specified for 5V.

Can I just power the encoder with 5V and do the i2c at 3.3V?
Can I power the encoder with 3.3V? (It seems to work, but not sure if reliable.)
Or should I use a logic level converter?

Thanks!