Project Name: Neo
Ticker: NEO
Website: neo.org/
Twitter: twitter.com/neo_blockchain
Whitepaper: Click here for the whitepaper.
What Is Neo (NEO)?
NEO is a blockchain platform that enables the development of smart contracts and digital assets. Considered China's first Public Blockchain, NEO aims to facilitate digital asset management with smart contracts to create a smart economy. “NEO” means new, modern, and young in ancient Greek. Launched in 2014 under the name “Antshares”, NEO is similar to Ethereum in terms of features such as DApp and ICO support.
NEO promotes itself as a rapidly growing and evolving ecosystem that aims to be the foundation of the next-gen internet—a new, smart economy that digitized payments, IDs, and assets come together.
What Does Neo Offer?
NEO stands out with its “Smart Economy” system, which consists of digital assets, digital IDs, and smart contracts. With the Smart Economy system, NEO allows physical assets to become digital assets on the blockchain. After physical assets are digitized, anyone can add these assets to the blockchain and benefit from a decentralized, transparent, secure, and trackable system.
Users can register, trade, and circulate multiple types of assets on the NEO blockchain. This process is called tokenization. Tokenization is converting the ownership or right of an asset into a digital asset or token on the blockchain. Tokenization can be applied to regulated financial instruments (stocks, bonds), tangible assets (real Estate, gold), and intellectual property (song, image) and more. By enabling the tokenization of physical assets, NEO offers its users a wide reach on a global scale and reduced payment periods.
Digital identities are used to authenticate the binding between digital and physical assets. NEO implements a number of X.509-compliant digital ID standards. With its Web of Trust feature, it is possible to store end-to-end encrypted data. Thanks to this feature, digital IDs, ID authentication, facial recognition, fingerprint authentication, voice recognition, SMS authentication, and other multi-factor authentication methods are available.
Developers use smart contracts to run this infrastructure. Another advantage NEO has is that it allows developers to use popular programming languages such as C#, VB.Net, F#, Java, Kotlin, and Python to facilitate the creation process of smart contracts. NEO’s virtual machine NeoVM allows developers to use any programming language.
In addition to the features offered by its Smart Economy system, there are two noteworthy features that make NEO stand out:
- The NEO platform enables ICOs and Dapps. Decentralized contracts or applications can be created on the blockchain that can be accessed by anyone from anywhere in the world.
- NEO implements the Delegated Byzantine Fault Tolerance (dBFT) consensus inspired by Ethereum's Proof of Work consensus. We will examine the dBFT consensus in detail later. In short, thanks to this consensus, NEO can process approximately 1,000 transactions per second.
NEO’s Technology
NEO makes use of the Delegated Byzantine Fault Tolerance (dBFT) algorithm. A block generation takes 15 to 20 seconds, and NEO can achieve 1,000 TPS. NEO has a potential to reach 10,000 TPS when optimized, thus it can support high-scale commercial applications.
The group that carries out the validation process is called “Professional Validators”. A randomly selected node called “The Speaker” acts as a block validator. The Speaker, who creates a new block of transactions waiting to be verified, is selected from among the “Delegates”. Only Delegates can participate in this process, and there can be n number of them, but only 1 Speaker is selected at a time. So for (n-1) Delegates, there is always a Speaker. The selection of Delegates is done randomly to ensure the security of the network. The speaker sends the transactions to the elected Delegates. They are expected to keep track of all transactions and record them on the network. Delegates are free to share and compare the processes they take to test data accuracy and the Speaker's integrity.
To become a Delegate, it is necessary to have 1,000 GAS as a commitment to service the network. Similar to the Proof of Stake consensus, malicious validators risk losing 1,000 GAS if they attempt to make a false transaction on the network. Likewise, using a voting process such as the Delegated Proof of Stake agreement, NEO token holders have the right to vote for Delegates.
Validators who perform transaction confirmations and block verification receive a reward in the form of GAS as a transaction fee. Data relating to transactions in the DBFT consensus is required to be accepted by most Delegates. If more than 66% of the Delegates are confident that the Speaker has verified the block without any errors, the block will be added to the blockchain by the system. However, if only 33% (or less) of the Delegates agree with the Speaker, the block will not be validated because it requires the approval of at least 2/3 of the Delegates in the network. If a suspicious move by the Speaker is noticed by the network, a different Speaker is selected from among the Delegates.
NEO is a developer-friendly blockchain that allows developers to use more than a single programming language. NEO believes in “bringing Blockchain Technology to developers”, instead of forcing them to learn new programming languages or tools. Using C#, Python, Go, TypeScript, and Java, developers can create, compile, and deploy smart contracts. Smart contracts can then be run in NEO’s virtual machine NeoVM. The upgraded NeoVM for the new N3 network provides significant performance improvements over the previous generation, and some instruction sets have increased uptime by up to 16 times. NeoVM uses a modular architecture that allows easy integration into other applications or off-chain scenarios.
Furthermore, NEO uses NeoFS, a distributed storage protocol. NeoFS, which was created with blockchain integration in mind, aims to move away from third-party storage providers by giving users complete control over their data. Any NEO user can join the NeoFS network and get paid to provide storage resources to other users or store their data in NeoFS. This service was designed to work with NEO smart contracts that enable DApps. Users can rent storage space or store files on the network in exchange for GAS. Representing NEO's commitment to building the future, NeoFS combines the benefits of decentralization and real-world integration, giving users and developers unparalleled data storage control.
The NEO Team & Company
NEO (previously known as Antshares) was founded in 2014 by Da HongFei and Erik Zhang, the presidents of the NEO Foundations that aims to incentivize the adoption of the blockchain. Hongfei is an entrepreneur who believes blockchain applications will eventually become “mainstream”, and he thinks that while the internet is a great invention, it has many flaws, and that means everyday consumers won't always have control over their own data. Zhang is the creator of the Delegated Byzantine Fault Tolerance (dBFT) algorithm used on the NEO blockchain.
NEO was made open source on GitHub in 2015 and its whitepaper was published in September 2015. Since its rebranding from Antshares to NEO in 2017, the project’s vision is to create a “smart economy” based on Blockchain Technology and smart contracts to issue and manage digitized assets.
NEO’s Digital Asset Economy
With a total supply of 100 million, NEO has a circulating supply of 70.5 million NEO as of this writing (April 27, 2021). 50% of the total NEO supply is allocated by the NEO Foundation to promote the development of the NEO ecosystem. NEO holders have voting rights on the platform.
As of April 27, 2021, the total circulating supply of NEO is 70,538,831 NEO, and the market capitalization of NEO has reached $6.62B.
Transaction fees are paid in GAS, a digital asset created on the platform. Users pay using GAS to create and run smart contracts. The total supply of GAS is 100 million GAS.
NEO Collaborations
Blockchain Service Network (BSN): On July 22, 2020, NEO announced a partnership with BSN, which is a global infrastructure that aims to create a digital economy by providing a low-cost platform for blockchain projects and companies.
Celer Network: NEO and the Celer Network established a partnership on September 18, 2019 to improve the scalability and usability of NEO’s DApps by integrating the Celer Network’s Layer-2 scalability solutions into NEO’s DApp ecosystem. The NEO Foundation also accepted to become a major node on the Celer Network.
Travala: On July 12, 2019, NEO announced a partnership with Travala, a blockchain-based travel agency that allows customers to pay with traditional payment methods as well as cryptocurrencies for more than 2 million hotels and accommodations worldwide to contribute to the global growth and marketing of Travala. Thus, Travala has become one of the projects supported by the NEO EcoFund. The NEO EcoFund, which aims to promote real-world use cases, has helped Travala expand with funds allocated for Travala.com with the goal of doubling the developer team within six months.
Evaluation of NEO
A platform that enables smart contracts, DApps, and ICOs is a must for the cryptocurrency ecosystem. NEO also allows developers to code in many programming languages, significantly paving the way for developers and the platform.
NEO, which aims to take Blockchain Technology beyond payments, is one of the cryptocurrencies that has quickly gained popularity in the blockchain industry since its launch. Thanks to the Delegated Byzantine Fault Tolerance (dBFT) consensus, NEO can achieve close to 1,000 TPS. Moreover, it does not require high energy usage as in the Proof of Work consensus mechanism. It has advantages in terms of sustainability and scalability. Thanks to NEO's smart economy system, assets can be easily digitized on the NEO blockchain in a decentralized, reliable, traceable, and transparent manner, independent of intermediaries and their associated costs, and these assets recorded on the platform are protected with a verified digital ID.
