but what it also did is push up the return (in DASH) for running a masternode and I am very keen to learn at what rate the market sees value in running a masternode again and starts accumulating them creating our next bubble. Also, Alexey45, take a look at the recent price action, despite heavy masternode selling, did you see the price dip? No. Instead it held its ground, this is very bullish, this is showing there is great underlying demand for DASH already and once this big seller is out of the way we could see a breakout.
Some of this happens to be true and some of it is just clinging to any port in a storm instead of (what you could be doing) advocating for Dash's powerful governance mechanism to be deployed to adapt the protocol for maximum competitiveness.
Dash is capable of attacking competitors to an extent that few if any "coins" are. But it can't do that while its hands are tied behind its back by a masternode community who's priority is to leech as much of the marketcap into their own pockets as they possibly can.
The irony of the masternodes' flawed priority is that they ignore the opportunity cost of growth in purchasing power of their collateral which is required to be pledged in order to receive mining rewards that would otherwise be directed to raising the price in the primary (mining) market. That price advantage alone can move the value of their collateral far more than the incremental coin-count of their Dash holdings can. We've seen that already.
Let us look at the OBV (On Balance Volume) in the longer term charts of Dash vs Bitcoin. We can see that there is some accumulation going on. OBV is lazily moving contrary to the price trace on the longest range charts. But it's barely detectable and this is in the middle of one of the greatest bull markets ever for crypto. So we'd expect that. But the problem is, this is also happening with fully mined coins and it isn't reflected in rankings.
(It might be for a brief few weeks when the "pumpers" get hold of us but that will only serve as an exit door for shills rather than people who actually want to stay in Dash and believe in it on the basis of fundamentals).
The reason for that (and the difference from the last time) is one and one only:
we are at masternode equilibriumDash's marketcap growth dynamics are completely different at masternode equilibrium from what they are when we are moving from 400 masternodes to 4000. That's because it doesn't really matter how much of the supply is in or out of circulation, it's the
rate at which it's taken out or put in to circulation that matters. At masternode equilibrium, the collateralising supply no longer has any effect on that rate. The dynamics shift so that the masternode rewards now become the dominant factor and those are all on the sell side only. (Miners have to buy the supply that they subsequently sell).
This explains why Dash is now at the bottom of the marketcap rankings for
all mined coins in the top 80 digital assets. If it was true that we "didn't need all this hashrate", we'd be at the top because only half of our supply has to be competed for with hashrate whereas all of their's does. We are twice as competitive as them in terms of "not needing hashrate" yet we're at the bottom of the heap. The masternodes got something wrong there.
However Dash
could turn this around and use its powerfull governance mechanism to its advantage. It's a simple step process:
1. understand the "mining" business model and its role in
transferring fiat capital into a blockchain token2. recognise that the reason we've lost so much competitivity corresponds to our lack of performance in store of value
3. masternodes need to appreciate growth in the value of their collateral (capital gain) at least as much as the Dash denominated rewards they received (because, having so much at stake, it can also manifest as a capital loss which will simply wipe out those Dash denominated rewards in an instant)
4. anyone who gets past points 1-3 will immediately realise how cheap service performance can be for Dash alone (exclusive, not available to Bitcoin, Litecoin, Monero et al) and how much masternode rewards can be increased by shifting a component
towards capital gain and
away from a Dash-denominated income level that results in overall capital
lossThe key to this is understanding the difference between a risk asset and a stable coin. In a stable coin we wouldn't have this problem. Masternode income would be masternode income, end of story. You would not have to calculate your aggregate reward by offsetting that income against the capital loss of your collateral. But Dash is
not a stable coin. So you
do have to calculate your reward by taking capital loss (or gain) of collateral into account and IMO masternodes should therefore be interested in Dash's protocol features which can maximise their capital gain, not just their Dash-denominated rewards.
The technical reason for that is that Dash inherits bitcoin's innate monetary properties but also (at a technology level) managed to decouple the mining protocol to liberate a new service layer protocol. But this advantage is lost if the project is co-opted by people (masternode operators) who simply don't even value the mining protocol. We end up with the worst of all worlds - not a de-fi token and not a highly mined scarcity token either.
One final point. When I say "capital loss" I'm talking mainly about opportunity cost. The cost of remaining invested in Dash while Bitcoin, Litecoin, Monero et al hammer us on ranking. Ranking means marketcap loss and marketcap loss means opportunity cost and opportunity cost ultimately means "staying in fiat". Ok you didn't lose any fiat-vauled Dash but you sure lost out by not being invested in Bitcoin.
Dash has and has always had an immensely powerful offering which was as good in store-of-value terms as it was in usability "what a nice wallet" terms. But we will not be able to deploy this advantage without being thinking, competitive and addressing elephants in the room.
Otherwise page 2 awaits us.
