My guess is we wouldn’t hit that till end of year. Capital will ebb and flow. We simply should allow it to, not throttle it. Right now, it’s being throttled.
Also, it will only flow if the rest of DeFi is growing as well. So I don’t imagine us being higher market cap than YFI.
That said, it should be no surprise if we are in the top 5 of market cap at some point in the near future if we allow the MCR to grow faster. Insurance companies are huge in the US - State Farm, All State, Progressive, Liberty Mutual, etc. Yet these are not monopolies. To me, NXM is like the FDIC insurance for DeFi. That deserves a monster valuation if it can execute. (And yes, NXM is not “insurance” per se, it’s a discretionary mutual, etc.)
But I do like your idea of fleshing out the downside and the worst-case scenario. What happens if MCR goes down to 130% sooner or later? What is the worst that can happen?
Or if MCR goes down to 100%.
AFAIK, members cannot sell at MCR of 100%, so it cannot go below 100% from selling, but possibly it could if there is a payout. And yes, this would be bad, as investors could not sell their assets.
But the same thing could happen today as well. Members could sell their investments today and we could go below 130% or hit 100%. There could be claims made to take us below 100% and “trap” members with an inability to sell.
I don’t see a difference between that happening today vs in the future with an accelerated growth in MCR.
What else am I missing? What is the worst case scenario with an accelerated growth in MCR?