Hard limit price is growing more or less when amount of HBD grows faster than amount of HIVE
It isn't the amount that is important, it is the value. The relationship is dynamic due to the price feed. If we were just looking at the ratio of token counts, then the analysis of inflation rates would be relevant, but that's not how it works. It is the value of Hive that needs to grow faster than the interest rate, not the supply of tokens. Of course, this should be obvious in that Hive is a high risk investment. If there weren't the prospect of large appreciation, no one would, or likely should, own it.
My view is that we hit or approach the cap frequently in large part because the cap is so low (i.e. too low). Yes there is demand for 10% of Hive's value in the form of HBD. Okay, is that an interesting observation, or is it basically obvious simply because 10% is almost nothing and there is at least some demand for HBD for obvious reasons.
Is there demand for 30%? Maybe yes, but overall the level of demand is not arbitrary. There wouldn't be demand for 99% IMO, so we could conceivably deal with the issue entirely by setting the cap at 99% (or removing it). Of course this is unrealistic, and likely unnecessary because demand would self-correct long before then.
Also, let's keep in mind that the current high interest rate is (almost) certainly "temporary". 10% won't be sustainable forever. It could persist for a while, but one way or another it will come down. So the idea that it isn't sustainable because it will outgrow Hive is likely true, but not for a long time.
The above ignores USD going hyperinflationary, which would also address the issue. Though I think we would likely switch to a different, reasonably value-retaining, peg target (which might make sense to do anyway)
No no, price feed does not influence hard cap price, just the relation between HIVE and HBD amounts. Let's see how much exactly we need new HIVE to offset one new HBD for 10% hard cap price to stay the same.
Using
h = HBD supply(corrected for treasury balance),v = HIVE supplywe want to calculatexso new hard cap price with1new HBD andxnew HIVE (left) equals old price (right):Let's see how it is for 30% hard cap.
The same. But that's actually good argument for raising hard limit - when ratio of HBD to HIVE gets bigger, the
x, which is its inverse, gets smaller, that is, we need to produce less new HIVE for each new HBD for hard limit price to stay stable.9(h+1) / (v+x) = 9h / v 9(h+1)v = 9h(v+x) hv + v = hv + hx v = hx x = v/h7(h+1) / 3(v+x) = 7h / 3v 21(h+1)v = 21h(v+x) hv + v = hv + hx v = hx x = v/hOh I agree, and wasn't suggesting otherwise. It affects whether the hard cap price matters.
I was referring to the feed price affecting the virtual supply, and therefore the "debt ratio" relative to the defined 10% cap. Of course these are two ways of viewing the same thing.