Yes the virtual supply is used.
Can you point out to the gitlab Hive code that shows that the potential supply is used, and the method that you describe for the calculations.
You are viewing a single comment's thread from:
Yes the virtual supply is used.
Can you point out to the gitlab Hive code that shows that the potential supply is used, and the method that you describe for the calculations.
It is not that the potential supply is used in the code. In fact, it is not. The existence of the potential supply is a logical conclusion or effect of the limit on the debt ratio.
The potential supply is the maximum that the HIVE supply can grow in the event that all of the circulating HBD is converted at the same time.
Even though it is not tracked or mentioned explicitly, it nonetheless exists.
Before the last hard fork, the virtual supply represented the total supply of HIVE that could come into existence if all of the HBD was converted at the same time and it could not grow beyond the limit set by the debt ceiling. However, after the last change in the code, the amounts in the DHF do not count toward the debt limit but they are included in the virtual supply.
For that last reason, the virtual supply no longer represents the maximum that the HIVE supply can grow if all of the HBD are converted. Instead, it only serves as the base used to calculate how much HIVE and/or HBD is emitted on any given day. And. the virtual supply can actually be higher than the potential supply.
If the virtual supply includes the balance in the DHF then it is not a good measure of the true debt ratio. This could be fixed if we do not include the HBD balance in the DHF in the virtual supply but that requires a code change.
I think I understand what you are pointing out, but just to be clear:
The HIVE and the HBD in the DHF are included in the virtual HIVE supply, used to calculate the marketcap as a denominator
The HBD in the DHF is not used in debt calucaltion as HBD supply (numerator)
You are sugesting to exclude the HBD supply in the DHF from the virtual HIVE supply, and calculate the debt in that way?
No, the debt limit gives us the maximum collateral that could be used to back up the value of HBD. Currently, the Hive supply is around 399 million, given the 30% debt limit that amounts to 171 million HIVE.
The true debt ratio is equal to the circulating HBD (denominated in HIVE at the feed price) divided by the potential supply which is equal to the current supply divided by 0.7 (1 minus the debt limit).
The change I would like to see is to exclude the HBD in the DHF from the virtual supply since it is not even currently counted for the debt ratio. It doesn't make sense to me that we left that piece of the code unchanged. It's like comparing apples to oranges.