Neo is a blockchain-based platform that aims to create a smart economy by utilizing blockchain technology and digital identity. Its design goals include the digitization of assets, self-management of digital assets through smart contracts, and the establishment of a distributed network for a smart economy.
In this article, we will explore the key features and components of Neo, including digital assets, digital identity, smart contracts, applications and ecosystem, management model, technology implementation, and more.
Neo Design Goals: Smart Economy
“Neo is the use of blockchain technology and digital identity to digitize assets, the use of smart contracts for digital assets to be self-managed, to achieve “smart economy” with a distributed network.”
Digital assets in Neo are programmable assets that exist as electronic data. Neo leverages blockchain technology to decentralize the digitization of assets, ensuring trust, traceability, transparency, and eliminating intermediaries. The Neo blockchain enables users to register, trade, and circulate various types of assets. Assets registered through a validated digital identity are legally protected.
Neo has two forms of digital assets: global assets and contract assets. Global assets can be identified by all smart contracts and clients in the system space. Contract assets, on the other hand, are recorded in the private storage area of smart contracts and require compatible clients for recognition. Contract assets can adhere to certain standards to ensure compatibility with most clients.
In Neo, a digital identity system is being developed that caters to individuals, organizations, and other entities. This system is based on the widely recognized PKI X.509 standard, which ensures compatibility and security in managing digital identities.
The digital identity standards being implemented in Neo encompass both a certificate issuance model compliant with X.509 and a decentralized Web of Trust model. The X.509-based model enables the issuance of certificates in a manner consistent with established practices. On the other hand, the Web of Trust model allows individuals to directly verify and issue certificates to one another, bypassing the need for a central authority.
To enhance security and authentication, the system incorporates a range of multi-factor verification methods. These include facial recognition, fingerprint scanning, voice recognition, SMS verification, and other techniques that strengthen the confirmation of an individual’s identity. This ensures that only authorized individuals have access to their digital identities.
Furthermore, Neo leverages blockchain technology to replace the Online Certificate Status Protocol (OCSP) for managing and recording the X.509 Certificate Revocation List (CRL). By utilizing the blockchain, the system provides a decentralized and tamper-proof method for tracking and managing revoked certificates. This enhances the trustworthiness and reliability of digital identities within the Neo ecosystem.
The concept of smart contracts was initially proposed by the cryptographer Nick Szabo in 1994, five years after the inception of the World Wide Web. Szabo defined smart contracts as programmable agreements that automatically execute contract terms when predetermined conditions are met. The emergence of blockchain technology has provided a decentralized and tamper-resistant framework that greatly enhances the practicality of smart contracts.
Within the Neo ecosystem, there exists an independent smart contract system known as NeoContract. One of its key features is the seamless integration with the existing developer ecosystem. Developers are not required to learn a new programming language but can utilize familiar languages such as C# and Java in their preferred Integrated Development Environments (IDEs) like Visual Studio and Eclipse. This allows for a smooth transition and facilitates smart contract development, debugging, and compilation.
Powering the NeoContract smart contract system is the NeoVM (Universal Lightweight Virtual Machine). NeoVM boasts several advantages, including high certainty, high concurrency, and high scalability. These features ensure efficient and reliable execution of smart contracts. By leveraging the NeoContract smart contract system, millions of developers worldwide will be able to rapidly engage in the development of smart contracts.
Application and Ecosystem
The ecosystem is vital for the success of Neo as an open-source community. Neo is committed to developing its ecosystem by providing mature development tools, improving documentation, organizing education and training activities, and offering financial support. Neo supports various applications and ecosystems, including:
1. Node Program
- A fully functioning Full node PC program
- A light node PC program with a better user experience
- Web / Android / iOS clients that do not need to synchronize with the blockchain
- Hardware wallet
2. Blockchain Explorer
3. SDK Development Kit
4. Smart Contract Compiler and IDE Plugin
- C# / VB.Net / F#, Visual Studio
- Java / Kotlin, Eclipse
- C / C++ / GO
- Python / Ruby
5. Decentralized Applications
- Smart fund
- AI-assisted legal smart contract
- Social networking
- Automated tokens liquidity providers
- Decentralized exchange
- Secure communication protocol
- Data exchange market
- Intellectual property trading market
- Prediction market
- Advertising market
- Hashpower market
- GAS market
Neo Management Model
1. Economic Model
Neo has two native tokens: NEO and GAS.
NEO has a total supply of 100 million tokens. It serves as the governance token, providing holders with the right to manage the Neo network. This management includes voting for bookkeeping and making changes to network parameters. The minimum unit of NEO is 1, and the tokens cannot be divided into smaller fractions.
GAS, is the utility token used to control and allocate network resources within the Neo ecosystem. It has a maximum total supply of 100 million tokens. GAS is used to pay for operations and storage related to tokens and smart contracts, creating economic incentives for consensus nodes and preventing resource abuse. The minimum unit of GAS is 0.00000001.
During the genesis block of the Neo network, 100 million NEO tokens were created which can be traded on platforms such as BitAlpha AI. The GAS tokens were not initially generated. Over the course of approximately 22 years, a decay algorithm will generate 100 million GAS to address holding NEO. When NEO is transferred to a new address, the subsequent GAS generated will be credited to that new address.
To enhance the user experience, the Neo network can establish a voting-based threshold to exempt a certain amount of GAS from transfer transactions and smart contract operations. This exemption helps reduce transaction costs for users.
Additionally, NeoID, a digital identity solution, can be utilized to prioritize transactions and smart contracts with qualified identities when there is a high volume of spam transactions. Transactions and smart contracts without qualifying digital identities can receive priority by paying GAS fees.
2. Distribution Mechanism
NEO’s Token distribution involves two portions The first portion consists of 50 million tokens, which were distributed proportionally to supporters of NEO during the crowdfunding phase. This distribution has already taken place.
The second portion comprises 50 million NEO tokens managed by the Neo Council. These tokens are dedicated to supporting Neo’s long-term development, operation, maintenance, and ecosystem. The NEO tokens in this portion are subject to a one-year lockout period and were unlocked after October 16, 2017. It’s important to note that this portion is not intended for trading on exchanges and is solely reserved for long-term support of Neo projects.
The plans for the second portion are as follows:
- 10 million tokens (10% of the total) will be utilized to incentivize Neo developers and members of the Neo Council.
- 10 million tokens (10% of the total) will be used to motivate developers within the Neo ecosystem.
- 15 million tokens (15% of the total) will be allocated for cross-investments in other blockchain projects. These investments are owned by the Neo Council and exclusively dedicated to Neo projects.
- 15 million tokens (15% of the total) will be retained as a contingency reserve.
- The annual use of NEO will have a limit of 15 million tokens
GAS tokens are generated with each new block in the Neo network. At the beginning, there is no GAS, but as blocks are created approximately every 15-20 seconds, the total amount of GAS will reach 100 million over a span of about 22 years. In one year, around 2 million blocks are generated.
Initially, each block generates 8 GAS. However, every year, there will be a reduction of 1 GAS per block for every 2 million blocks generated. This reduction will continue until it reaches 1 GAS per block, which will be maintained for about 22 years. Once the 44 millionth block is reached, a total of 100 million GAS will have been generated, and no more GAS will be created from new blocks.
Following this distribution pattern, 16% of the total GAS will be created in the first year, 52% within the first four years, and 80% within the first 12 years. These GAS tokens will be distributed proportionally based on the amount of NEO held by individuals, recorded in their respective addresses. NEO holders can claim their share of GAS tokens at any time by initiating a transaction to their holding address.
3. Governance mechanism
In the Neo network, the ones who own and hold NEO tokens have the power to make important decisions about the network. They can vote on different matters related to the network’s operations and use the GAS tokens generated from holding NEO to access various functions within the network. NEO tokens can also be transferred between different individuals.
Apart from the chain governance, there is also an off-chain governance structure in place. This involves the Neo Council, which is composed of the original members who founded the Neo project. The Neo Council consists of different committees, such as the management committee, technical committee, and secretariat.
These committees are responsible for making strategic decisions, technical decisions, and implementing specific actions for the Neo project. The primary goal of the Neo Council is to promote and develop the Neo ecosystem, and they are accountable to the Neo community for their actions and decisions.
Technology Implementation By NEO
Neo utilizes several key technologies to achieve its goals:
- Byzantine Fault Tolerance (dBFT):
Neo employs the dBFT consensus mechanism, which ensures the security and finality of transactions on the network. dBFT allows for fast block confirmation times and provides resistance against malicious nodes and network disruptions.
- Cross-chain interoperability:
Neo aims to enable seamless interaction and asset exchange between different blockchains. Through cross-chain interoperability protocols, Neo users can access and utilize assets from other blockchains, expanding the possibilities of the Neo ecosystem.
NeoFS is a decentralized file storage system integrated into the Neo platform. It provides users with secure and distributed storage capabilities, allowing them to store and retrieve data in a decentralized manner. NeoFS enhances data privacy, security, and resilience within the Neo ecosystem.
- Oracle services:
To enable interaction between the blockchain and the external world, Neo incorporates oracle services. Oracles act as bridges between the blockchain and real-world data, allowing smart contracts to access and utilize external information, such as market prices, weather data, or events.
Quantum computing poses a potential threat to cryptographic systems. To address this, Neo is developing NeoQS, a quantum-resistant cryptographic algorithm. NeoQS ensures the security of the Neo network and protects user assets even in the face of advancements in quantum computing technology.
By incorporating these technologies, Neo strives to create a robust and efficient platform that can support a wide range of decentralized applications and facilitate the development of the smart economy.
Neo is an innovative blockchain platform that aims to revolutionize the way we manage digital assets, establish digital identities, and execute smart contracts. With its focus on creating a smart economy, Neo provides a decentralized and transparent framework that ensures trust, security, and efficiency.
Through the digitization of assets, the implementation of digital identity standards, and the seamless integration of smart contracts, Neo empowers individuals and organizations to participate in the emerging digital economy. Its comprehensive ecosystem supports various applications and provides developers with the tools they need to build decentralized solutions.
Furthermore, Neo’s economic and governance models, supported by the NEO and GAS tokens, enable stakeholders to actively participate in decision-making and shape the future of the platform. With a commitment to continuous improvement and community development, Neo strives to be a leading blockchain platform driving the adoption of blockchain technology and the realization of the smart economy.
As the blockchain space continues to evolve, Neo remains at the forefront, pushing boundaries and paving the way for a new era of decentralized innovation.