Cliff edge sounds dangerous, maybe top up the fund from other sources now, and then start a tapered reduction program over 5 years or so, ending with a gentle slope.

The fund has 2+ years, so they still have time to consider options. 

The SilverCoins fund would be an ideal target to continue funding Supernodes ...

Mathematics does not lie. I hope you don't wait to figure out what to do because it might be too late.

A Letter from Lon Wong

by Julian. April 3, 2018
Expanding the Ecosystem, Assuring Growth

"As we forge ahead in the fourth year of NEM, I want to share with you a few thoughts about our future and how important this project is to me. It has always been my desire to ensure that NEM succeeds. By any measure, NEM has succeeded although our journey together has witnessed many trials and tribulations. But one thing has remained constant and that is my commitment to building the best ecosystem for NEM. I have always given my all to NEM by working full time from its inception when XEM began its modest life at USD0.00017 per coin.

In the past year, we have seen tremendous growth in the value of XEM that coincided with the establishment and expansion of the NEM Foundation. I am proud to serve as our foundation?s founding president and oversee its expansion throughout the world. NEM, via our foundation, enjoys the distinction of being the first crypto project to set up its own blockchain center. This center represents a significant achievement and demonstrates the cohesiveness of the project team to come together on a global scale to dream big. To be entrusted the opportunity to lead this wonderful community and team, has been both a privilege and an honor for me.

Catapult has just launched, and soon its open source version for the private chain will be released. Preparation of the public chain will follow soon and I have high hopes that Catapult will be another major success, at which time, we should be recognized as a world leader. I continue to believe that it is critical for NEM to have a large ecosystem that goes beyond what blockchain can do with value transactions and transfers. Our superior technology should be expanded to the hilt to include and cover industries at large.

Very early on, before the launch of NEM, one of the things I thought we should do was to create some form of an integrated solution with a solid abstraction layer sitting on the NEM public chain and a distributed file management system. However, there were more urgent matters to attend to and this idea was put in the back burner.

Many of you would have seen the recent official announcement of the inception of ProximaX as a project. Allow me to clarify what ProximaX is. This project is meant to enlarge the ecosystem of NEM. It is by no means a competitor to NEM. ProximaX was built to increase the utility of XEM. The creation of XPX, the crypto coin of ProximaX, is itself a mosaic on the NEM blockchain with XEM as its transaction fee. It is in fact a demonstration of how powerful NEM is and how expansive projects can be powered by the NEM blockchain. If there is widescale adoption of ProximaX, NEM will definitely benefit as it requires more XEM for transactions. ProximaX and NEM are symbiotic and the ecosystem shall increase greatly in breadth and depth of utility.

Our NEM.io Foundation has been blessed with a group of able leaders and enthusiastic fulltime employees that stand ready to take the world by storm. We have built momentum and I am happy with the way things are moving. So, after careful consideration, I have decided that it is time for me to step aside as the President of NEM.io Foundation and concentrate my energy to build ProximaX and continue to grow the NEM ecosystem.

NEM?s future is bright and I believe the best is yet to come. I urge all of you to continue the great support you have been giving to build our ecosystem and support the work of our colleagues at NEM.io Foundation. I will certainly be doing my part. You have my word that everything I do in the future will continue to benefit NEM.

Thank you,

Lon Wong"

I think the solution is twofold:

1- start tapering the reward for Supernodes, let the number of SN's adjust gradually over time as the bounty reward slowly decreases, compensated by (hopefully) increasing XEM price. Going cold turkey can kill you, avoid at all costs, and avoid a dump of SN locked up XEM

2- top up the SN bounty fund now, to maximise the period of tapering, ideally +5 years

As transaction numbers increase, and price increases over time I think we can be optimistic that eventually running nodes for tx fees only will be incentive enough for many SN operators to just continue running nodes, but they need certainty now, and time for network activity and price of XEM to increase. Two years is not long enough IMO

Changing the SN lockup amount is another variable to play with for sure, but if you drop the SN amount too low the reward per SN will fall as the number of SN's increases. If the SN lockup is too low the result could be the opposite of what you expect, the reward for locking up XEM could become too small, and some SN operators decide the reward isn't enough anymore, and they sell, so you end up with about the same number of SN we have now. It's a balancing act! Guys locking up 3M XEM might just sell 1M or 2M XEM at the same time so they can still run 1-2 SN's, what effect would that have?

Whatever happens, giving people a lot of warning of changes, and then certainty is critical.

changing anything in SN setup should be avoided

people did invest and build SN by knowing all the rulesets
u dont change rulesets that where the base of investment decisions

any SN owner know how long it run

focus ur energy on get NEM chain be heavy utilized in the timeframe
and it will be for sure worth run nodes in 2 years too just for tx fees

and for everyone not just whales who can afford a SN

additional funds for a soft SN reward shutdown
is no issue in fact it would add rewards i did not expect

still i think u should put more trust in how much tx activity NEM chain will have in 2 years

i think NEM is clear one of the top 5 blockchain solutions as base to build on

and so we will have shitload transactions and good rewards for normal harvesting

thats my prediction

and i think ur slow shutdown additional SN phase shoult just be considered as backup plan
if for some reason tx fee volume in 2 years is not as i expect it to be high enough as motivation to run nodes