Except it's not a "creation cost", it's a capitalisation volume. So only 40% of the supply is being "capitalised".

You don't make the coin more valuable by reducing the "creation cost", you make it less valuable. The "averaging out" you refer to it is the marketcap depletion that I'm refering to.

This goes back to the second of Ryan's flawed appraisals - characterising POW as a "manufacturing process" where hashrate is an "overhead" instead of a capitalisation process where hashrate is the mediator of capital entering the coin. It's not difficult to see why this is wrong and you'll always come to that conclusion as long as you swallow the mining in a literal sense - a picks and shovels operation - instead of what it really is - a trustless market.

Primary Market Dynamics

To see that, lets consider ONLY the primary market for the moment (because the secondary market is common to all coins so cancels out in the comparison). In this case we just imagine there's no secondary exchange of coins, the first holders of the coin keep it and never sell. In Dash, masternode holders are primary holders of the new coin just the same as miners.

In this case case the marketcap is defined exclusively by the marginal cost of mining. In other words the next block emerge has a cost of production and that cost defines the coin price. (Note the only difference between "cost" and "price" is that price is just the unit cost. If I buy 10 toothbrushes and the "cost" was $20 then the "price" was $2 per brush).

It follows therefore that the marketcap in this case (and consequently the store of value performance) is DEFINED by the cost of mining the next block.

We know that difficulty rises with more miners, so the cost of mining the next block also will and therefore that is the mechanism by which the block is "capitalised". Seeing it as a "cost of production" or overhead would be like sticking cash in the bank and seeing that deposit operation as a "cost" or "overhead" to be minimised. It isn't a cost, you're just moving capital from one parking place to another.

Secondary Market Dynamics

Now lets re-introduce the secondary market into our appraisal. For analysis purposes, lets assume secondary market price equals primary market price (cost of mining) for a moment so we can observe the effect of asymmetric primary "price". We now have a bunch of sellers who's holdings are at heterogeneous unrealised gains. The mined supply is neutral - it's not at any realised gain or loss and there's no profit to be made by selling. There is also a disincentive (in the long run) to sell below cost because that incurs a loss for the miner.

On the other hand, the masternode holder doesn't care. They are at a profit at any price because they never had to capitalise their "coin" in the first place. The secondary buyer is going to do that for them. (Whereas the miner, is simply transferring a pre-capitalised coin to the secondary buyer). This leads to anothehr source of downward pressure on marketcap - excessive profit realisation from uncapitalised holdings.

Even if you take the view that miners are "forced to sell" to cover electricity costs, it doesn't matter because those "electricity costs" went towards capitalising the coin. You can also argue that masternodes are "forced to sell" because the whole point of running a node is to operate an income stream and that income stream is only useable if it's constantly realised. So that argument cancels out on both sides.

Conclusion: Using the discipline of Primary / Secondary market analysis and not falling into the trap of interpreting the mining metaphor literally, we see that excessive use of the protocol to distribute coins "for free" is corrosive in BOTH primary and secondary markets. (If you make 100% profit on the sale of a stock then you got it "for free", so nor is this term debatable).

It's just a massive faucet that's all.

(Remember once again, this is the "nodecount equilibrium" analysis. MN rewards provide an incentive which manifests itself at an aggregate level while the nodecount is growing. Thereafter the dynamics above take over in characterising the market).