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Too small to destroy the Earth, yet not big enough to act as a Space Prison... alas.

Oh, I dunno. If its orbit is currently stable, then all you'd need to do is increase its velocity, whenever you add mass.

It might be a good object to seed with lunar landfill.

I'm thinking it could be like the outer space version of Sealand.

Just the right size to turn into our first starship?

That would actually make sense if its mass could be turned into fuel.