Hypothetical Question

General Discussion
#1

Just something I’ve been thinking about. Suppose if the NEM price went up to $1. That makes the amount of NEM on each supernode out there worth $3,000,000. Now, the owner of the supernode would be thinking, should I continue to earn around $500 a day running my supernode (earning around $182500 a year), or should I sell them all and earn $3,000,000 rather than wait around 17 years.

How would this impact the security and availability of the network, if everyone starting selling their supernode balance?

I suppose the counter argument for this is that there would be a greater share of the NEM reward amongst supernodes, so for example there are around 400 supernodes out there, and if 75% of these sold all their NEM, and there were only 100 supernodes left, then the share of supernode profits would be 140,000 / 100 = $1400 per day which is over $500,000 a year (assuming the price stays the same).

I suppose it is a matter of short term gains over long term, and it balances itself out based on reward share. I can see how it could be tempting for a lot of people to sell their supernode NEM at that point.

#2

I like these hypothetical questions. :slight_smile:

The real answer is hard to know. We can assume for sure some will dump, but maybe others that aren’t running a supernode now would also add their node too.

The free market will have to decide.

Also, the point of the Supernodes Rewards isn’t really a get rich quick scheme as it is in other blockchains.

The point really is to bootstrap the network for a while and make sure it is very healthy and decentralized. If we get to $1 XEM, anybody that has millions of XEM should be motivated in and of themselves to run a powerful node just to protect their investment, no reward needed. I still think we would have rewards, but at that point, it might not be that important in ensuring the network is strong, fast, and decentralized, which again is the point of the rewards, not to earn ROI; we just know that at the time ROI is the surefire way to make that happen.

The other thing we could do is slowly reduce the deposit amount. That would cause a slow sell-off but when the deposit was low enough, it would also start to create some new buy-ins. Again, the free market would decide I guess.

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#3

If XEM hits 1$ >

XEM whales will sell some coins for sure. In order to let the Supernode program survive the Dev team will change;

  • Minimum XEMs of 3 million XEM to run a supernode will be lowered to 50-100 thousand XEM. This way there will be a lot more NEW people who will join the Supernode program. More people joining means less daily XEM’s payout. But that doesn’t matter because it’s 1$ each anyway.
#4

If the supernode XEM requirements were lowered to 50 - 100 thousand. Then someone who originally bought 3M for their supernode would move part of their XEM from the original supernode, to set up 30 or so other supernodes in order to increase their daily payout.

At 50,000 a supernode for a supernode at $1 XEM is $50,000 investment, at current reward payout amount is around $400 a day, or $146,000 a year. Someone could make an ROI within 4 - 5 months, and continue to receive 146,000 dollars a year. Assumption that XEM price is at $1 and daily reward payout is 400 XEM.

I can see how this can be a very attractive investment for some.

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