The most obvious flaw in the logic that it is unsustainable is the implied assumption that this 20% yield is static and can't be changed. Witnesses can lower it to 0% if they wanted to in an instant. It's a dynamic variable that improves monetary elasticity and stability.
If Hive spikes x10 because everyone is buying HBD and burning Hive and increasing the debt ratio and creating massive leveraged risk... then yeah... lower the yield because it's unsustainable. What we are seeing right now is the opposite of that. The 20% yield gets better and better as the price of Hive crashes. Don't even need to consider lowering it while debt ratio is below 5%.
ok, so it makes it seem easier to understand knowing that only if Prices are rising its risky and it can be altered, this is good news. Im still not comfortable with systems like these though only because i like things that just run themselves, they are so beautiful. I dont like governments or banks so the Hive system just doesn't seem decentralised enough for me personally. Might be a while but i think at some point it will be evident.
If the debt ratio is rising it's risky. Unless our higher demand for debt is sustainable. For example if the ratio is going up simply because we are offering 20%, that's bad. But if it's going up because someone built a successful business on Hive, that's fine. These things can't be run by an algorithm. They require a lot more analysis than plugging some numbers on a screen into an equation.