I believe that any master node operator would rather sell 1 Dash for $ 1000 than sell 5 for $ 200, but this is just an opinion. I cannot assure you that the price will be sunk by the sell-off of masternode rewards. I question it, but I don't know.
These kind of anecdotal observations are not very helpful because they don't characterise the whole system performance in terms of its transmission of capital from secondary market (exchange) investors into primary market valuation.
In a mined coin, the primary market valuation is defined by the price of extraction of the next coin from the blockchain.
To determine those dynamics IMO we need to ditch our various preconceptions of individual trader behaviour, which are diverse, and simply understand the business model of a mined coin. In that respect, the problem is with the word "mining". It's a metaphor, nothing more and an unfortunate one in Dash's case because it obscures the real function of mining which is a capital transport mechanism. This has lead to a huge banana skin that we've slipped up on, making us think it's dispensable.
We need to discard the metaphor and see it for what it is - getting investor capital into the chain.
The capital transport process works like this:
1. the secondary market buyer invests their fiat capital at the exchange (e.g. Kraken)
2. the exchange transfers the capital to the "miner"
At this stage we note that the word "miner" is simply a metaphor for a broker who provides a capital-migration interface between the exchange and the blockchain
4. the "miner" exchanges their fiat currency for "hashrate currency" provided by the electric company
5. the "miner" then trades this for the coin in the blockchain primary market, supporting the price in the process through competitive bidding
6. the coin then travels back up the food chain all the way back to the secondary market buyer
The secondary buyer's investment capital is now in the blockchain, collateralised by the marginal cost of coin extraction. Meanwhile the the blockchain's tokenisation of that value has ended up in the hands of the secondary market buyer. This is the basic Satoshi model of blockchain capitalisation which Dash inherits.
Notice that all the way along, each party only takes a small profit margin for transporting the capital. The money paid to the electric company isn't an overhead, rather it's a currency exchange. Notice also that in Dash's implementation masternode rewards are revenues which if realised,
have to be tapped out of the investor capital flow which therefore
never reaches the chain. The consequent blockchain capital deficit is represented by masternode profits on their reward realisations which (unlike miners who are simply conduits) have a near-zero cost base.
At this point there will probably be conflicting and diverse views about this perspective. So it's helpful to introduce 2 distinct analytical models to resolve these:
• a widget production model (where you're trying to minimise the resource cost and maximise selling price)
• a capital transmission model (where you're trying to maximise the amount of capital that gets from stage 1 to stage 5)
In terms of the widget production model, then it's true that "cost does not drive price". The manufacturer is trying to minimise costs and maximise price and if market demand is there then profit is inversely proportional to cost. But in a capital transmission model the OPPOSITE applies. This is where the masternode community have got it wrong IMO and ended up configuring our protocol parameters at a way sub-optimal level for capital appreciation. For example when you transfer money to your bank account, you don't regard the value of the capital you're moving as a
cost. The units in your account are not widgets with a production cost, they're a store of value so you want as
much as possible of the capital from stage 1 to end up at stage 5 using the example above as an analogue.
So in the model for store-of-value digital assets with distinct primary and secondary markets (BTC, Dash, LTC, Monero, Doge etc), mining represents the transmission mechanism and it has to operate with high fidelity. If half the capital from stage 1 ends up in masternode operator pockets on the way to stage 5, this asset will bleed marketcap and external investors will simply dry up. That in turn will lead to loss of non-investor user adoption which will manifest in depleted blockchain traffic statistics. Sure the masternode operators will make money
for a while but ultimately the low fidelity capital transmission will deplete the store of value performance to the point that even masternodes don't make money due to the chronic devaluation of their collateral by external asset markets.
The way to fix this IMO is:
1. for Dash governance to become conscious of the distinctive and conflicting priorities between these two analytical models (
widget production model &
capital transfer model) and the perilous banana skins generated by conflating the two
2. to appreciate how our psychology is pre-primed with priorities of the former and that we tend to project these on the latter unconsciously
3. as a consequence of 1 & 2, to realise that Dash can then be way more competitive as a capital transfer model than it is at the moment. ( = store of value performance)
4. only then can we add back in Dash's usability features into consideration. It is unique in the aspect of being capable of supporting nearly as much capital transfer performance as BTC and LTC but way out-competes them on usability. We can't do that however unless we address the issues with our crippled mining quota
Luckily, all that it takes in technical terms is a re-appraisal and resetting of the reward ratio. Nada.
In governance terms however it might take a bit of a leap of consciousness, maturity & sophistication. That is the next obstacle to be scaled IMO.
