Aren't IOUs of btc just another shitcoin? I dont see how that would dilute you. They both can have paralel markets, just like non-kyc btc is more expensive than kycd btc...
Discussion
I doubt most of the people will hold IOUs. And most (which are the current users) with a current supply of more than 19M, should value the real btc
We already have been diluted. FTX is a great example. They took Bitcoin deposits, then sold them rather than holding them on the books. People leaving their coins on FTX, believing in the IOUs, caused reduced price for everyone (dilution).
While you and I agree that Bitcoin is Bitcoin (and IOUs are shitcoins), other people believing in the IOUs does and has caused dilutive effects on the value of our coins.
In and of itself, this is somewhat unavoidable. We can’t stop people from buying, holding and believing in IOUs. However, if we fail to densify transactions, we guarantee that people will do this. IOUs are the alternative to scaling, and they are dilutive.