Right but the DAO doesn't take up more than half the MC.
This would operate under the assumption that the DAO is liquid.
The DAO is a drip that can be shut off at any time.
On a philosophical level: locked tokens are the same as non-existent tokens.
It's just as easy to print tokens out of thin air and claim that all networks are under threat.
Which is exactly the main theme of all Bitcoin maximalists.
Best example here is if the entire ninjamine was destroyed when Hive was created and we just decided to print money in real time to fund the DAO instead. Logistically both of these solutions produce the exact same outcome and inflation rate. And in fact the threat we are discussing here has already been shown not to exist when the entire DAO was defunded just recently.
I didn't calculate since November last year and Hive was a similar price too. Then it was 41%, which is crazy high. As the price falls from here, that % increases rapidly cos the DAO is mostly held in liquid HBD pegged to $1 and as you said, the coded debt limit doesn't kick in even at 5 cents.
This in theory should make HBD safer as they are prioritised over HP holders, but it doesnt take account of long term incentives and the risk it could spiral out of control rapidly like Terra Luna. Once people lose confidence, its over.
I agree with all your other points.
If I'm interpreting you correctly one of us might be a little confused as to how this works.
The 5 cent price point doesn't include DHF money, nor does the debt ratio.
https://www.hbdstats.com/
https://hive.ausbit.dev/hbd
The coded debt limit kicks in at 30% debt ratio, which can happen at any price point.
It can happen at $5, in fact that's how Luna actually collapsed; UST leverage becoming more popular than the base governance token in the eyes of big money players. Luna collapsed because UST overleverage pumped it x100.
It's just super ironic to me because it's very clear that Hive is in a stable state.
It's when we get pumped that the network becomes unstable and risky.
And also we are supposed to be discussing the risk to HBD holders,
in terms of the 15% yield and $1 peg being sustainable.
Immediately bringing up the DHF is quite off topic.
An argument can be made that it's risky to the Hive network.
An argument can't be made that it's risky to HBD holders.
The biggest risk to HBD holders is if witnesses change the rules, which isn't even a risk because it requires a hardfork and gives everyone months to accept the new rules and pivot accordingly.