Tok, I've asked around about that trendline
One of Ryan's objectives behind the protocol change to address "store of value" was to hoover up more of the supply into masternode collateral to offset our excess emission over competitors (like bitcoin).
So he calculated that increasing the masternode reward would do this. But this was a mis-calculation for 2 reasons;
1. he wrongly identified miners as the most corrosive to price, claiming they are biggest "sellers" when they are in fact brokers with a buy AND a sell operation. Miners generate demand for the primary supply and you have to take this into account when looking at the whole economic equation. You can't ignore it as Ryan did otherwise the conclusion is just a self-fulfilling prophecy. This is partly why we got trounced by all fully mined competitors over the last year - he got it the wrong way around by dismissing 50% of the "buy side" of the primary market as unnecessary for technical reasons. We don't have an on-chain sink so this cannot be dismissed
2. The Masternode component of the block reward does not represent ROI. You don't necessarily increase ROI by increasing the reward because ROI = (reward +
capital gain on the collateral) and the latter is usually the bigger element of ROI being that the collateral is very large. There will therefore be a point of diminishing returns on MN block reward where (due to point 1) increasing the masternode reward simply corrodes the price compared with our fully mined competitors and makes them a better store of value than Dash
All the competitive characteristics of how Dash has traded over the last 18 months (AND before) indicate that we are well past that point of diminishing returns and that our protocol reward ratio is actually pushing us down the rankings. It's not rocket science - the protocol puts a price on extraction of a coin. If you set that "issue price" to zero on 6 out of 10 coins while your competitors issue all theirs to the highest bidder, what else do you expect ?
Dash is a very powerfull economic competitor to bitcoin (
bitcoin with services) but the appropriate way to maximise its competitive store-of-value would be to look for the "sweet spot". Get it wrong and we slide down the rankings. Getting it right requires a bit more of a sophisticated approach than simply ramping up the MN reward and hoping for the best. I have proposed that the "sweet-spot" is found by
A: identifying an intermediate target price and
B: setting the reward ratio so that miner-masternode profitability is roughly at parity at that price. That would maximise dollar-denominated ROI for masternodes instead of Dash-denominated rewards. But other proposals may be viable. What we have right now is not working and will only continue to "not work" (compared with our fully mined equivalents) as long as we leave it alone.
