@Wh1teKn1ght just to elaborate for a moment.
I do not enjoy being contentious. It's definitely not any more fun that getting exhausted reading other people's posts, but someone has to point this stuff out.
Here is a question for you to reflect on.....
Why do miners only make a minority profit ? (Say, 10% if they're lucky)
• Because they incur
costsNow ask yourself another question. What are those costs ?
• they are the
costs of acquisition of their coin
Now reflect on that last answer for a second. Cost of acquisition is otherwise known as "purchase cost". i.e. miners are
buyers.
That one fact invalidates all the logic behind the current protocol configuration because it was based on limiting supply to markets on the assumption that miners are the biggest sellers. But that assumption is wrong. They do execute sales as part of their overall trade but they are not NET sellers (they are only serving as brokers for exchange market buyers). It wasn't fully thought through since only the exchange markets were considered which is only one half of their trade. The other half is the purchase of the original supply emission.
What we've done is cut off the supply to the PAYING market and instead increased the supply to the NON-PAYING market. The aggregate mathematical effect of this is simply to put a lot of unnecessary pressure on the price. Like selling half your supply at full price and the other half at zero price. This brings us full circle and squares with the fact that masternodes operate at almost 100% profit (since they incur no cost of acquisition). That profit margin is subsidised by the Dash budget (the very same "budget" that is deployed by the treasury). That's budget which Dash's competitors use to attract competition for their supply and expand the size (and thereby value) of their primary market.
Even if you argue that the loss of mining market competitivity is offset by gain in masternode demand, that only applies up to a point which is defined by the equilibrium nodecount at which there's no net masternode growth. Even at that there's also a point of diminishing returns in the reward ratio beyond which it does more damage than good (to masternode interests as well). A suggested approach to determining that optimal point in the reward ratio analytically
is discussed here.
This needs to get sorted for Dash to even be able to compete with fully mined counterparts but before it can get sorted, the problem (and mistake/oversight whatever yawanna call it) needs to at least be acknowledged and properly discussed.