Yup a huge risk for panic and i totally against increase the debt limit.
I fully agree with your premise, I just arrived to the opposite conclusion - keeping the debt limit low at 10% means the panic situation is way more likely to trigger compared to the situation where the debt limit is increased.
Also, it is a huge argument for blocktrades' proposition to reduce automatic HBD printing long before getting close to the actual debt limit.
True, but with for example 50% ( to make it a bit extreme) we will hit the panic at some time too. Only later.
With the difference, hive could pump to 7$ in that timeframe to print a shit ton of HBD.
With the 10%, it's like a government that can't pay its bills. The haircut would destroy at this point way more "money".
And it could also if the conversion is unlucky destroy the tokenomics from Hive.
7$ Hive = 2,8B MC
30% print = 900M possible HBD (also 10% APR is more then 90M a year)
Price drops to 3$ and panic hits + mass conversions. Price drops more and more conversions.
Sure Haircut can be in place, but it would not be stable at all.
I don't know. I like collateral stables more with lockups. They have problems too but don't affect inflation and they are not debt.
Yeah, I don't know, I'm in favor to hold it as low as possible :) IMO it makes it riskier to hold larger amounts powered up in extreme market movements.
The N idea is good. Let's see what happens.