NEO

NEO, previously known as Antshares, is a blockchain platform that allows for the execution of trustless smart contracts.

About NEO

NEO, previously known as Antshares, is a blockchain platform that allows for the execution of trustless smart contracts. Similar to Ethereum, it can be used for financial services such as payments, but it can also provide far more complex interactions as well as fully-functional, fully-featured distributed apps, or dApps. However, NEO decided to take a slightly different approach in designing their infrastructure – instead of relying on heavy proof-of-work calculations like Ethereum and Bitcoin, NEO uses a proof-of-stake system with delegated Byzantine Fault Tolerance (dBFT), which means, to put it simply, that consensus is achieved when 66% or more of the nodes on the NEO network confirm a transaction.

In addition, the NEO network and infrastructure contains two tokens in actuality – NEO and GAS. NEO is the main token on the network – determining a user’s stake takes into accout how much NEO he or she owns, and therefore voting rights. Holding NEO in an officially-approved wallet automatically generates a second crypto token called GAS that is used for transactions on the NEO network.

NEO includes digital identity verification features based on a standard called ‘X.509’. Smart contract creators can even choose to make use of biometrics like facial scans, fingerprint scans, and voice scans as well as two-factor confirmations like SMS verification to ensure that users are who they say they are. This standard allows smart contract developers to use a variety of safety mechanisms such as biometrics like fingerprint, facial and voice scans as well as 2FA confirmations like SMS verification, if they choose to implement them. These KYC and security features add multiple layers to the security of the network for dApp developers who wish to implement them, which is also beneficial for NEO facing the might of Chinese regulation.

The NEO token itself is indivisable and can only be held, bought and sold in natural numbers, i.e. 1 NEO or 42 NEO, but not 39.33 or 0.58 NEO. Some exchanges do allow for buying fractions of NEO, but users can only withdraw NEO in natural (‘whole’) numbers.

Transferring NEO is free; although some exchanges might add their own transaction fees. There are 100 million NEO tokens in existence, and a current circulating supply of 65 million, with the rest being held in reserve by the NEO team. Initially, back when NEO was still Antshares, 50 million NEO tokens were distributed to supporters and 50 million NEO were reserved by the team as such:

🔹 10 million tokens (10% total) will be used to motivate NEO developers and members of the NEO Council

🔹 10 million tokens (10% total) will be used to motivate developers in the NEO ecosystem

🔹 15 million tokens (15% total) will be used to cross-invest in other block-chain projects, which are owned by the NEO Council and are used only for NEO projects

🔹 15 million (15% total) will be retained as contingency

🔹 The annual use of NEO in principle shall not exceed 15 million tokens

This means the NEO team can only release 15 million tokens out of the reserve and into the circulation per year, which is the reason there are 65 million NEO in circulation to date as opposed to 50 million. According to documentation, the maximum release schedule is as follows:

the maximum inflation schedule would look like this:

🔹 Year 1: 50M to 50M = 0% inflation

🔹 Year 2: 50M to 65M = 30%

🔹 Year 3: 65M to 80M = 23%

🔹 Year 4: 80M to 95M = 18%

🔹 Year 5: 95M to 100M = 5%

🔹 Year 6+: 100M to 100M = 0%

Unlike NEO, GAS – the token that actually pays for transactions on the NEO network – is divisible into decimals. There is also a hard cap of 100 million GAS tokens, although these tokens are generated over time as users stake their NEO, so the current circulating supply is naturally lower and rests comfortably at 10,109,161 GAS to date.

Use of Blockchain
4.4
Product
Readiness

Is the product ready for use? Is there a working prototype or MVP? How long until it is operational?

4.0
N/A
4 - Beta or initial rollout.
Appeal

How appealing is the product? How good or necessary is it? Does it have a distinct edge?

5.0
N/A
5 - Wow.
Target User Base

Is it mass market or niche?

4.0
N/A
4 - Large audience / wide market.
Competition

Are there many other similar solutions or is this one of just a few, or even one of a kind?

4.0
N/A
4 - Few competitors / a leading solution.
Innovation

How innovative or inventive is the product, either conceptually or technologically?

5.0
N/A
5 - Highly specialized, proprietary.

Product

NEO, famously dubbed, ‘China’s Ethereum’, is a blockchain platform specifically designed to host smart contracts, ICOs, and DApps in a decentralized manner. The nickname truly fits – both Ethereum and NEO are Turing complete, are fueled by a specific crypto-asset (GAS for NEO; Ether for Ethereum), both are open source, responsive, well validated and are backed by a strong community. Ethereum is backed by the EEA (Enterprise Ethereum Alliance; a project that connects Fortune 500 enterprises with Ethereum blockchain experts) while NEO is backed by no other than the Chinese government. Moreover, both platforms utilize a different consesus mechanism. Ethereum’s Proof-of-Work is very energy-intensive and expensive whereas NEO’s dBFT is more energy efficient.

There are other differences: in programming languages, the coin’s divisibility, the inherent nature of the coin itself, transaction speed and more. But the key difference between NEO and Ethereum is that NEO is focused on making a smart economy by digitizing traditional real world assets via digital identity, while also running dApps and smart contracts, whereas Ethereum aims to be a decentralized aggregated mega-computer that runs smart contracts with various use cases ranging from decentralized exchanges to KYC processes, to simple use-cases like Crypto Kitties.

Neo was originally founded by Da Hongfei and Erik Zhang as AntShares (ANS) in 2014. In 2016, in response to a growing need for blockchain solutions that meet the requirements of both government regulators and private companies, Da and Erik founded OnChain, a venture-backed company that provides blockchain-based financial services. In 2017, AntShares was rebranded as NEO. Ever since the rebrand, NEO’s popularity grew. More and more of NEO’s documentation was translated into English and other Western languages, and numerous companies and developers started collaborating and working on projects fueled by NEO’s platform. NEO supports a multitude of different programming languages and developers found it very easy to adapt to the new field.

To date there are numerous useful dApps running on NEO’s network. QLink is a decentralized mobile network offering global Wi-Fi with incentivized hotspot sharing. NEX is a fully decentralized exchange platform in the making. Zeepin is working on a platform that aims to enable content creators to distribute and manage their content with copyright protection and digital identity. And these are just a few. NEO has created a developer-friendly environment and it is thriving.

 

Product Roadmap
4.0
Use of Blockchain
Blockchain Development

Is blockchain technology essential? Does it make the solution significantly different and better?

4.0
N/A
4 - Innovative use of blockchain technology.
Disruptive Blockchain Advantage

How disruptive is the introduction of blockchain technology into the product's market space?

4.0
N/A
4 - Generally disruptive.
Need for a Custom Token (vs. BTC or ETH)

Is the token essential or could it be done just as well or better with fiat or Bitcoin?

5.0
N/A
5 - Real, tangible, utility-based value.
System Decentralization (besides token)

How decentralized is the system architecture other than the token (e.g., data collection, storage, access, and use, or decision making processes, etc.)?

3.0
N/A
3 - Hybrid; decentralized as far as circumstances allow.
Contribution to Blockchain Ecosystem

How compelling is the solution's contribution to the evolution of blockchain infrastructure and economy?

4.0
N/A
4 - Captivating.

Use of Blockchain

NEO uses blockchain technology with smart contract and digital identity to digitize assets and create a self-managed, secure and distributed ecosystem.
On the NEO blockchain, users are able to register, trade, and circulate multiple types of assets. Proving the connection between digital and physical assets is possible through digital identity. Assets registered through a validated digital identity are protected by law, which is one key benefit NEO has – working and cooperating with Chinese authorities and regulations.

In concept, Neo is a smart contracts ecosystem, similar to Ethereum. It allows users to automate the storage and exchange of digital assets. In order to compete with more established smart contract implementations, Neo takes advantage of evolving technology and its cooperation with Chinese authorities towards the stated goal of a ‘smart economy’.

NEO has two forms of digital assets: global assets and contract assets. Global assets can be recorded in the system space and can be identified by all smart contracts and clients. Contract assets are recorded in the private storage area of the smart contract and require a compatible client to recognize them. Contract assets can adhere to certain standards in order to achieve compatibility with most clients.

NEO’s digital identity system is based on the Public Key Infrastructure X.509 standard. NEO’s digital identity standards, in addition to compatible X.509 level ceritificate issuance models, will also support web-of-trust point to point certificate issuance models. Part of NEO’s identity verification includes fingerprints, voice signatures, facial features, SMS and other multi-factor authentication methods.

Neo employs a consensus mechanism called Delegated Byzantine Fault Tolerance (dBFT) [Add link: http://docs.neo.org/en-us/node/consensus.html], which tackles the Byzantine Generals’ Problem. In the NEO consensus algorithm, Consensus Nodes are elected by NEO holders and vote on validity of transactions. These nodes have also been referred to as ‘Bookkeepers’. A bookkeeper node must maintain a minimum balance of NEO and meet certain performance requirements. Bookkeepers are tasked with verifying the blocks that are written to the blockchain. If two-thirds of the nodes on the network can agree with a bookkeeper’s version of the blockchain, consensus is achieved and the proposed version of the blockchain is validated. If consensus fails, an alternate bookkeeper is called and the process is repeated.

Scalability is a major issue for any blockchain. As the number of transactions and network size increase, the blockchain must be able to scale proportionally. If it cannot scale with demand then transactions will be delayed or never processed at all. We experienced the symptomes of scalability issues in December 2017, when Bitcoin transaction fees and processing times were abnormally large. According to NEO’s documentation, choosing dBFT as the consensus mechanism should allow for better scaling and performance compared to currently existing solutions.

In the NEO dBFT consensus mechanism, taking about 15 to 20 seconds to generate a block, the transaction throughput is measured up to about 1,000TPS. Through appropriate optimization, there is a theoretical potential to reach 10,000TPS, the team claims. The dBFT combines digital identity technology, meaning the bookkeepers can be a real name of the individual or institution. Thus, it is possible to freeze, revoke, inherit, retrieve, and transfer ownership due to judicial decisons. This facilitates the registration of compliant financial assets in the NEO network. The NEO network plans to support such operations when necessary.

NEO’s smart contract system consists of three parts: NeoVM – A universal blockchain virtual machine; InteropService – Interoperable services and DevPack – Compiler and IDE plugin.

NeoVM is a lightweight, general-purpose virtual machine whose architecture is very close to the JVM and .NET Runtime, similar to a virtual CPU that reads and executes instructions in the contract in sequence, performs process control based on the functionality of the instruction operations, logic operations and more. The primary language of NEO is C# (Technically .NET, so C#/VC++/VB/F#), but it also supports Python, Java and other programming languages, making it very appealing for developers to learn how to build dApps on the network. The InteropService is used to load the blockchain ledger, digital assets, digital identity, persistent storage area, NeoFS, and other underlying services. They are like virtual machines that are provided for virtual machines, enabling smart contracts to access these services at run time to achieve some advanced functionality. Through this low-coupling design, NeoVM can be ported to any blockchain or even non-blockchain system used, increasing the utility of the smart contracts. The DevPack includes the high-level language compiler and the IDE plug-in. As mentioned, since NeoVM’s architecture is very similar to JVM and .NET Runtime, the compilers in DevPack can compile Java byte code and .NET MSIL into NeoVM’s instruction set. Java / Kotlin, C# developers do not need to learn new languages and will be able to immediately start developing smart contracts in VS, Eclipse and other familiar IDE environments. This greatly reduces the learning curve for developing smart contracts.

NEO’s main competitor is, naturally, Ethereum. But not only Ethereum and NEO are in the mix – Qtum, ETC (Ethereum Classic), Cardano and EOS also offer or aim to offer, in some cases, the same things. They vary in TPS speeds, native languages, and various consensus mechanisms and technicalities, but in practicality aim to do the same thing. What NEO has over its competitors are solid tech coupled with increasing adoption and careful attention to regulations and the crypto-community as a whole.

One major issue critics love to raise is the fact that there are currently 7 bookkeepers – that’s a very small number for a system to be called ‘decentralized’. NEO has publicly admitted that they care more about transaction speeds, partnerships, and focusing on network growth, rather than decentralization, which is a key feature for some investors that is simply missing at the moment. Nonetheless, there are plans to authorize more nodes as bookkeepers in time and to make the system truly decentralized.

There was some criticism raised with regard to poor network performance, especially during ICOs. The statistics, through block explorers, show that there was indeed a decrease in transaction speeds during an ongoing ICO. There was also a recent bug in the network, which rattled the system and the crypto-sphere as a whole. Many leading figures in the crypto world (Charlie Lee, Jared Tate, Xinxi Wang, Vlad Zamfir, Emin Gun Sirer and more) spoke publicly about the topic, until NEO founder and lead developer Erik Zhang commented on the issue, detailing the full scale of the bug and a timeline to solve it.

Use of Blockchain Compliance
4.0
Roadmap
Concreteness

Is there a concrete and practical development plan (vs. just a conceptual vision)?

4.0
N/A
4 - Down to earth.
Feasibility

Is the development plan realistic? Is it based on reasonable goals and timelines?

4.0
N/A
4 - Realistic.
Vision

Is there a larger, long-term vision?

5.0
N/A
5 - Paving the way for the future.
Dependencies (services or capabilities)

How available, operational, or trusted are the other systems or capabilities on which the project relies?

3.0
N/A
3 - Imperfect but available, or using substitutes.
Current Position

Where is the project now, relative to its vision and plans?

4.0
N/A
4 - Past a few hurdles.

Roadmap

NEO’s roadmap was released after the rebrand, around October 2017. It was short and simple, stating what is projected to be completed and when, a one-pager. It had to do with decentralization of consensus nodes, universal data format for wallet/node and promotion and the ecosystem itself. For the decentralization of consensus nodes the team aimed to optimize the P2P network and voting algorithm, and to upload a candidates list for future bookkeepers. The optimization was achieved but there is no website with a candidates list to date. For the universal data format for wallet/node the team planned to work on NEP2 – Private Key En/Decryption and NEP3 Universal Data Format, both of which they did. For the ecosystem and its promotion, this includes DevCoin 1, CoZ Funding, globally legal token-raising framework and more.

Nowadays, NEO is pretty much a full product. The success of the network will build upon or crumble against the numbers of active users, enterprises and dApps on the network or lack thereof. Full decentralization is also an issue many investors hope NEO will manage to overcome and solve.

Roadmap Company and Team
4.6
Compliance
Token Utility (value through usage)

How much use is there for the token itself (regardless of its value as an investment vehicle)?

5.0
N/A
5 - Foundational or varied use cases.
Token as Security (tradable instrument)

How valuable is the token as an investment vehicle or financial instrument?

4.0
N/A
4 - Not as such, or compliance is assured.
Token/Smart-Contract Readiness

Is the blockchain infrastructure of the project ready for use? Is there a working prototype or MVP? How long until it is operational?

4.0
N/A
4 - Beta or initial rollout.
Attention to Compliance Issues

How much attention is given to compliance (via token and ecosystem design, token sale participation, etc.)? Is this issue addressed directly and coherently?

5.0
N/A
5 - Professional, audited.
Legal Review/Risk Assessment

What kind of legal documentation (reviews or agreements) and risk assessment are provided?

5.0
N/A
5 - Professional and top-tier.

Compliance

Holding and owning NEO grants you shares that give you voting rights and the right to dividends in the form of GAS, which in turn allow the holder to pay for their use of a NEO share. NEO is used to vote for bookkeepers as well as on major issues, and provides rights to dividends in the form of GAS. GAS is used to pay for services on the blockchain as well as a basic fee. A user could also use GAS in the form of a bookkeeper nominee deposit as collateral.

A nifty and popular analogy goes as follows:

Holding GAS is akin to owning a petrol station. As a petrol station owner (GAS holder in this case), you buy fuel (GAS) from a refinery (NEO holders) and then sell that GAS in return for money (i.e. return for a task performed on the NEO blockchain like a transaction). The majority of GAS is sold from worldwide markets (exchanges) where petrol station owners (GAS holders), refineries (NEO holders), and prospective petrol stations/refineries can interact with one another. Owning this petrol station, or holding GAS, you have the option to buy and sell gas quite fast, however you must pay the refinery (NEO holders) a premium for any GAS used. This is like taxes you pay a governing body. To the extent of this analogy, published first by the user u/encephalomagna on Reddit, you have no right to choose who you pay to handle your accounting (which is done by bookkeepers), or how much you can charge for GAS. To start a petrol station (i.e buy GAS) you can either purchase from a gas station (GAS holder), the worldwide market (exchanges) or from a refinery (NEO holder) if they have GAS available for sale.

Holding NEO is akin to both owning a petrol station, and owning a refinery. A refinery owner (NEO holder) can create fuel (GAS) at a rate that will slowly decrease until the year 2038, and sell this to petrol stations and on the worldwide marketplace (people who buy GAS from you). Refinery owners, or NEO holders, also receive payment from petrol stations whenever fuel (GAS) is used. This is similar to paying taxes that are already included in the ‘fuel’ price to ‘refineries’ after you have used the fuel (GAS) you required to get you from point A to B, or performing a task on the NEO blockchain in our case. Moreover, contrary to holding just GAS, NEO holders can band together to vote on large changes to the blockchain such as electing bookkeepers and deciding how much GAS owners should charge for GAS. The amount of NEO you hold determines the size of the ‘refinery’ and will dictate the rate of GAS production and dividends allocation as well as voting/electing rights allocation.

It’s a bit like a stock dividend: the more NEO you own, the more GAS you can collect, and while GAS was designed to be used as a form of payment on the NEO network, it’s also traded in several crypto markets. The amount of GAS your NEO ‘produces’ can be calculated here. (add link: https://neotogas.com/)

Compliance
4.8
Company and Team
Company Stage and Foundation

Is the company already established? Has it raised funds before? Is it mature?

5.0
N/A
5 - Well established, has raised significant funds.
Background of Lead Team Members

Do we know who they are? Do they have LinkedIn profiles? Do they have solid, relevant backgrounds?

4.0
N/A
4 - Verifiable relevant experience.
Team Assembly and Commitment

Is a solid, fully committed core team in place? Do they have online (e.g. LinkedIn) profiles showing sufficient relevant experience? Is their participation transparent?

5.0
N/A
5 - Skilled and balanced, fully committed.
Team Skill Set Relevance

Does the amount of talent and skill in each area seem to fit the project requirements?

5.0
N/A
5 - Meeting and exceeding project requirements.
Team Skill Set Balance

Is the team well-rounded (biz/tech/blockchain)? Is there sufficient talent and skill in all areas of required development?

5.0
N/A
5 - Excellent, all aspects covered.

Company and Team

NEO was originally founded by Da Hongfei and Erik Zhang as AntShares (ANS) in 2014. In 2016, in response to a growing need for blockchain solutions that meet the requirements of both government regulators and private companies, Da and Erik founded OnChain, a venture-backed company that provides blockchain-based financial services. In 2017, AntShares was rebranded as NEO. OnChain approached enterprise blockchain use from the other direction – providing consulting and development services to the many private companies interested in blockchain. Onchain started seeing some high-speed velocity in 2016, further developing Antshares and becoming the first Chinese blockchain company to join Hyperledger, which has helped to further develop Onchain’s product called DNA. DNA, or Distributed Networks Architecture, enables the integration of business systems and the support of cross-chain interoperability.
DNA’s design allows blockchain to be applied to a variety of uses cases while collaborating with government regulations, deciding on a consensus protocol, being unable to connect with other blockchain applications, or even finding developers to build out your own blockchain or applications.
NEO and OnChain’s relationship is akin to that of Ethereum’s and Enterprise Ethereum. Onchain works on blockchain projects with large enterprises and has collaborated with the Chinese government in the past, which ultimately helps the NEO ecosystem.

One of the most notable and often understated roles Hongfei has played has been in establishing a constructive line of communication with Chinese government officials. China has recently released their 13th 5-year-plan (Add link: https://www.uscc.gov/Research/13th-five-year-plan), which discusses the prioritization of blockchain development.

Erik Zhang is NEO’s co-founder and core developer, co-founder and CTO of OnChain, and author of the dBFT consensus mechanism. Both Erik and Da play a major leading and verbal role – Da continues to lead NEO in terms of growth, popularity, compliance and regulations, whereas Erik is still the main developer. Both are very responsive and release updates every so often. The NEO council also releases their report once a month.

Other than Da and Erik, the team is very well assembled and well balanced. There are about half a dozen to a dozen full-time developers in Shanghai (main offices). Other than that, there are a few dozens more contributing code and ideas as community members, some of them are even DNA developers. There is also the City of Zion, a global, independent group of open source developers, designers and translators formed to support the NEO core and ecosystem. They work on various projects, dApps, wallet and more.

Product

NEO, famously dubbed, ‘China’s Ethereum’, is a blockchain platform specifically designed to host smart contracts, ICOs, and DApps in a decentralized manner. The nickname truly fits – both Ethereum and NEO are Turing complete, are fueled by a specific crypto-asset (GAS for NEO; Ether for Ethereum), both are open source, responsive, well validated and are backed by a strong community. Ethereum is backed by the EEA (Enterprise Ethereum Alliance; a project that connects Fortune 500 enterprises with Ethereum blockchain experts) while NEO is backed by no other than the Chinese government. Moreover, both platforms utilize a different consesus mechanism. Ethereum’s Proof-of-Work is very energy-intensive and expensive whereas NEO’s dBFT is more energy efficient.

There are other differences: in programming languages, the coin’s divisibility, the inherent nature of the coin itself, transaction speed and more. But the key difference between NEO and Ethereum is that NEO is focused on making a smart economy by digitizing traditional real world assets via digital identity, while also running dApps and smart contracts, whereas Ethereum aims to be a decentralized aggregated mega-computer that runs smart contracts with various use cases ranging from decentralized exchanges to KYC processes, to simple use-cases like Crypto Kitties.

Neo was originally founded by Da Hongfei and Erik Zhang as AntShares (ANS) in 2014. In 2016, in response to a growing need for blockchain solutions that meet the requirements of both government regulators and private companies, Da and Erik founded OnChain, a venture-backed company that provides blockchain-based financial services. In 2017, AntShares was rebranded as NEO. Ever since the rebrand, NEO’s popularity grew. More and more of NEO’s documentation was translated into English and other Western languages, and numerous companies and developers started collaborating and working on projects fueled by NEO’s platform. NEO supports a multitude of different programming languages and developers found it very easy to adapt to the new field.

To date there are numerous useful dApps running on NEO’s network. QLink is a decentralized mobile network offering global Wi-Fi with incentivized hotspot sharing. NEX is a fully decentralized exchange platform in the making. Zeepin is working on a platform that aims to enable content creators to distribute and manage their content with copyright protection and digital identity. And these are just a few. NEO has created a developer-friendly environment and it is thriving.

 

Category Breakdown
Readiness

Is the product ready for use? Is there a working prototype or MVP? How long until it is operational?

4.0
N/A
4 - Beta or initial rollout.
Appeal

How appealing is the product? How good or necessary is it? Does it have a distinct edge?

5.0
N/A
5 - Wow.
Target User Base

Is it mass market or niche?

4.0
N/A
4 - Large audience / wide market.
Competition

Are there many other similar solutions or is this one of just a few, or even one of a kind?

4.0
N/A
4 - Few competitors / a leading solution.
Innovation

How innovative or inventive is the product, either conceptually or technologically?

5.0
N/A
5 - Highly specialized, proprietary.
Product Score:
4.4

Use of Blockchain

NEO uses blockchain technology with smart contract and digital identity to digitize assets and create a self-managed, secure and distributed ecosystem.
On the NEO blockchain, users are able to register, trade, and circulate multiple types of assets. Proving the connection between digital and physical assets is possible through digital identity. Assets registered through a validated digital identity are protected by law, which is one key benefit NEO has – working and cooperating with Chinese authorities and regulations.

In concept, Neo is a smart contracts ecosystem, similar to Ethereum. It allows users to automate the storage and exchange of digital assets. In order to compete with more established smart contract implementations, Neo takes advantage of evolving technology and its cooperation with Chinese authorities towards the stated goal of a ‘smart economy’.

NEO has two forms of digital assets: global assets and contract assets. Global assets can be recorded in the system space and can be identified by all smart contracts and clients. Contract assets are recorded in the private storage area of the smart contract and require a compatible client to recognize them. Contract assets can adhere to certain standards in order to achieve compatibility with most clients.

NEO’s digital identity system is based on the Public Key Infrastructure X.509 standard. NEO’s digital identity standards, in addition to compatible X.509 level ceritificate issuance models, will also support web-of-trust point to point certificate issuance models. Part of NEO’s identity verification includes fingerprints, voice signatures, facial features, SMS and other multi-factor authentication methods.

Neo employs a consensus mechanism called Delegated Byzantine Fault Tolerance (dBFT) [Add link: http://docs.neo.org/en-us/node/consensus.html], which tackles the Byzantine Generals’ Problem. In the NEO consensus algorithm, Consensus Nodes are elected by NEO holders and vote on validity of transactions. These nodes have also been referred to as ‘Bookkeepers’. A bookkeeper node must maintain a minimum balance of NEO and meet certain performance requirements. Bookkeepers are tasked with verifying the blocks that are written to the blockchain. If two-thirds of the nodes on the network can agree with a bookkeeper’s version of the blockchain, consensus is achieved and the proposed version of the blockchain is validated. If consensus fails, an alternate bookkeeper is called and the process is repeated.

Scalability is a major issue for any blockchain. As the number of transactions and network size increase, the blockchain must be able to scale proportionally. If it cannot scale with demand then transactions will be delayed or never processed at all. We experienced the symptomes of scalability issues in December 2017, when Bitcoin transaction fees and processing times were abnormally large. According to NEO’s documentation, choosing dBFT as the consensus mechanism should allow for better scaling and performance compared to currently existing solutions.

In the NEO dBFT consensus mechanism, taking about 15 to 20 seconds to generate a block, the transaction throughput is measured up to about 1,000TPS. Through appropriate optimization, there is a theoretical potential to reach 10,000TPS, the team claims. The dBFT combines digital identity technology, meaning the bookkeepers can be a real name of the individual or institution. Thus, it is possible to freeze, revoke, inherit, retrieve, and transfer ownership due to judicial decisons. This facilitates the registration of compliant financial assets in the NEO network. The NEO network plans to support such operations when necessary.

NEO’s smart contract system consists of three parts: NeoVM – A universal blockchain virtual machine; InteropService – Interoperable services and DevPack – Compiler and IDE plugin.

NeoVM is a lightweight, general-purpose virtual machine whose architecture is very close to the JVM and .NET Runtime, similar to a virtual CPU that reads and executes instructions in the contract in sequence, performs process control based on the functionality of the instruction operations, logic operations and more. The primary language of NEO is C# (Technically .NET, so C#/VC++/VB/F#), but it also supports Python, Java and other programming languages, making it very appealing for developers to learn how to build dApps on the network. The InteropService is used to load the blockchain ledger, digital assets, digital identity, persistent storage area, NeoFS, and other underlying services. They are like virtual machines that are provided for virtual machines, enabling smart contracts to access these services at run time to achieve some advanced functionality. Through this low-coupling design, NeoVM can be ported to any blockchain or even non-blockchain system used, increasing the utility of the smart contracts. The DevPack includes the high-level language compiler and the IDE plug-in. As mentioned, since NeoVM’s architecture is very similar to JVM and .NET Runtime, the compilers in DevPack can compile Java byte code and .NET MSIL into NeoVM’s instruction set. Java / Kotlin, C# developers do not need to learn new languages and will be able to immediately start developing smart contracts in VS, Eclipse and other familiar IDE environments. This greatly reduces the learning curve for developing smart contracts.

NEO’s main competitor is, naturally, Ethereum. But not only Ethereum and NEO are in the mix – Qtum, ETC (Ethereum Classic), Cardano and EOS also offer or aim to offer, in some cases, the same things. They vary in TPS speeds, native languages, and various consensus mechanisms and technicalities, but in practicality aim to do the same thing. What NEO has over its competitors are solid tech coupled with increasing adoption and careful attention to regulations and the crypto-community as a whole.

One major issue critics love to raise is the fact that there are currently 7 bookkeepers – that’s a very small number for a system to be called ‘decentralized’. NEO has publicly admitted that they care more about transaction speeds, partnerships, and focusing on network growth, rather than decentralization, which is a key feature for some investors that is simply missing at the moment. Nonetheless, there are plans to authorize more nodes as bookkeepers in time and to make the system truly decentralized.

There was some criticism raised with regard to poor network performance, especially during ICOs. The statistics, through block explorers, show that there was indeed a decrease in transaction speeds during an ongoing ICO. There was also a recent bug in the network, which rattled the system and the crypto-sphere as a whole. Many leading figures in the crypto world (Charlie Lee, Jared Tate, Xinxi Wang, Vlad Zamfir, Emin Gun Sirer and more) spoke publicly about the topic, until NEO founder and lead developer Erik Zhang commented on the issue, detailing the full scale of the bug and a timeline to solve it.

Category Breakdown
Blockchain Development

Is blockchain technology essential? Does it make the solution significantly different and better?

4.0
N/A
4 - Innovative use of blockchain technology.
Disruptive Blockchain Advantage

How disruptive is the introduction of blockchain technology into the product's market space?

4.0
N/A
4 - Generally disruptive.
Need for a Custom Token (vs. BTC or ETH)

Is the token essential or could it be done just as well or better with fiat or Bitcoin?

5.0
N/A
5 - Real, tangible, utility-based value.
System Decentralization (besides token)

How decentralized is the system architecture other than the token (e.g., data collection, storage, access, and use, or decision making processes, etc.)?

3.0
N/A
3 - Hybrid; decentralized as far as circumstances allow.
Contribution to Blockchain Ecosystem

How compelling is the solution's contribution to the evolution of blockchain infrastructure and economy?

4.0
N/A
4 - Captivating.
Use of Blockchain Score:
4.0

Whitepaper

Category Breakdown
Comprehensiveness

Does it cover the full scope of the problem and solution?

N.0
N/A
N/A
Readability

Is it easy enough to understand?

N.0
N/A
N/A
Transparency

Does it candidly describe and disclose where the project now stands, how much exists and how much still needs to be done, etc.?

N.0
N/A
N/A
Business Plan Presentation

Does it contain a viable, comprehensive business plan?

N.0
N/A
N/A
Technology Presentation

Does it present a well thought out technological architecture? Does it address implementational challenges?

N.0
N/A
N/A
Whitepaper Score:
0.0

Roadmap

NEO’s roadmap was released after the rebrand, around October 2017. It was short and simple, stating what is projected to be completed and when, a one-pager. It had to do with decentralization of consensus nodes, universal data format for wallet/node and promotion and the ecosystem itself. For the decentralization of consensus nodes the team aimed to optimize the P2P network and voting algorithm, and to upload a candidates list for future bookkeepers. The optimization was achieved but there is no website with a candidates list to date. For the universal data format for wallet/node the team planned to work on NEP2 – Private Key En/Decryption and NEP3 Universal Data Format, both of which they did. For the ecosystem and its promotion, this includes DevCoin 1, CoZ Funding, globally legal token-raising framework and more.

Nowadays, NEO is pretty much a full product. The success of the network will build upon or crumble against the numbers of active users, enterprises and dApps on the network or lack thereof. Full decentralization is also an issue many investors hope NEO will manage to overcome and solve.

Category Breakdown
Concreteness

Is there a concrete and practical development plan (vs. just a conceptual vision)?

4.0
N/A
4 - Down to earth.
Feasibility

Is the development plan realistic? Is it based on reasonable goals and timelines?

4.0
N/A
4 - Realistic.
Vision

Is there a larger, long-term vision?

5.0
N/A
5 - Paving the way for the future.
Dependencies (services or capabilities)

How available, operational, or trusted are the other systems or capabilities on which the project relies?

3.0
N/A
3 - Imperfect but available, or using substitutes.
Current Position

Where is the project now, relative to its vision and plans?

4.0
N/A
4 - Past a few hurdles.
Roadmap Score:
4.0

Compliance

Holding and owning NEO grants you shares that give you voting rights and the right to dividends in the form of GAS, which in turn allow the holder to pay for their use of a NEO share. NEO is used to vote for bookkeepers as well as on major issues, and provides rights to dividends in the form of GAS. GAS is used to pay for services on the blockchain as well as a basic fee. A user could also use GAS in the form of a bookkeeper nominee deposit as collateral.

A nifty and popular analogy goes as follows:

Holding GAS is akin to owning a petrol station. As a petrol station owner (GAS holder in this case), you buy fuel (GAS) from a refinery (NEO holders) and then sell that GAS in return for money (i.e. return for a task performed on the NEO blockchain like a transaction). The majority of GAS is sold from worldwide markets (exchanges) where petrol station owners (GAS holders), refineries (NEO holders), and prospective petrol stations/refineries can interact with one another. Owning this petrol station, or holding GAS, you have the option to buy and sell gas quite fast, however you must pay the refinery (NEO holders) a premium for any GAS used. This is like taxes you pay a governing body. To the extent of this analogy, published first by the user u/encephalomagna on Reddit, you have no right to choose who you pay to handle your accounting (which is done by bookkeepers), or how much you can charge for GAS. To start a petrol station (i.e buy GAS) you can either purchase from a gas station (GAS holder), the worldwide market (exchanges) or from a refinery (NEO holder) if they have GAS available for sale.

Holding NEO is akin to both owning a petrol station, and owning a refinery. A refinery owner (NEO holder) can create fuel (GAS) at a rate that will slowly decrease until the year 2038, and sell this to petrol stations and on the worldwide marketplace (people who buy GAS from you). Refinery owners, or NEO holders, also receive payment from petrol stations whenever fuel (GAS) is used. This is similar to paying taxes that are already included in the ‘fuel’ price to ‘refineries’ after you have used the fuel (GAS) you required to get you from point A to B, or performing a task on the NEO blockchain in our case. Moreover, contrary to holding just GAS, NEO holders can band together to vote on large changes to the blockchain such as electing bookkeepers and deciding how much GAS owners should charge for GAS. The amount of NEO you hold determines the size of the ‘refinery’ and will dictate the rate of GAS production and dividends allocation as well as voting/electing rights allocation.

It’s a bit like a stock dividend: the more NEO you own, the more GAS you can collect, and while GAS was designed to be used as a form of payment on the NEO network, it’s also traded in several crypto markets. The amount of GAS your NEO ‘produces’ can be calculated here. (add link: https://neotogas.com/)

Category Breakdown
Token Utility (value through usage)

How much use is there for the token itself (regardless of its value as an investment vehicle)?

5.0
N/A
5 - Foundational or varied use cases.
Token as Security (tradable instrument)

How valuable is the token as an investment vehicle or financial instrument?

4.0
N/A
4 - Not as such, or compliance is assured.
Token/Smart-Contract Readiness

Is the blockchain infrastructure of the project ready for use? Is there a working prototype or MVP? How long until it is operational?

4.0
N/A
4 - Beta or initial rollout.
Attention to Compliance Issues

How much attention is given to compliance (via token and ecosystem design, token sale participation, etc.)? Is this issue addressed directly and coherently?

5.0
N/A
5 - Professional, audited.
Legal Review/Risk Assessment

What kind of legal documentation (reviews or agreements) and risk assessment are provided?

5.0
N/A
5 - Professional and top-tier.
Compliance Score:
4.6

Company and Team

NEO was originally founded by Da Hongfei and Erik Zhang as AntShares (ANS) in 2014. In 2016, in response to a growing need for blockchain solutions that meet the requirements of both government regulators and private companies, Da and Erik founded OnChain, a venture-backed company that provides blockchain-based financial services. In 2017, AntShares was rebranded as NEO. OnChain approached enterprise blockchain use from the other direction – providing consulting and development services to the many private companies interested in blockchain. Onchain started seeing some high-speed velocity in 2016, further developing Antshares and becoming the first Chinese blockchain company to join Hyperledger, which has helped to further develop Onchain’s product called DNA. DNA, or Distributed Networks Architecture, enables the integration of business systems and the support of cross-chain interoperability.
DNA’s design allows blockchain to be applied to a variety of uses cases while collaborating with government regulations, deciding on a consensus protocol, being unable to connect with other blockchain applications, or even finding developers to build out your own blockchain or applications.
NEO and OnChain’s relationship is akin to that of Ethereum’s and Enterprise Ethereum. Onchain works on blockchain projects with large enterprises and has collaborated with the Chinese government in the past, which ultimately helps the NEO ecosystem.

One of the most notable and often understated roles Hongfei has played has been in establishing a constructive line of communication with Chinese government officials. China has recently released their 13th 5-year-plan (Add link: https://www.uscc.gov/Research/13th-five-year-plan), which discusses the prioritization of blockchain development.

Erik Zhang is NEO’s co-founder and core developer, co-founder and CTO of OnChain, and author of the dBFT consensus mechanism. Both Erik and Da play a major leading and verbal role – Da continues to lead NEO in terms of growth, popularity, compliance and regulations, whereas Erik is still the main developer. Both are very responsive and release updates every so often. The NEO council also releases their report once a month.

Other than Da and Erik, the team is very well assembled and well balanced. There are about half a dozen to a dozen full-time developers in Shanghai (main offices). Other than that, there are a few dozens more contributing code and ideas as community members, some of them are even DNA developers. There is also the City of Zion, a global, independent group of open source developers, designers and translators formed to support the NEO core and ecosystem. They work on various projects, dApps, wallet and more.

Category Breakdown
Company Stage and Foundation

Is the company already established? Has it raised funds before? Is it mature?

5.0
N/A
5 - Well established, has raised significant funds.
Background of Lead Team Members

Do we know who they are? Do they have LinkedIn profiles? Do they have solid, relevant backgrounds?

4.0
N/A
4 - Verifiable relevant experience.
Team Assembly and Commitment

Is a solid, fully committed core team in place? Do they have online (e.g. LinkedIn) profiles showing sufficient relevant experience? Is their participation transparent?

5.0
N/A
5 - Skilled and balanced, fully committed.
Team Skill Set Relevance

Does the amount of talent and skill in each area seem to fit the project requirements?

5.0
N/A
5 - Meeting and exceeding project requirements.
Team Skill Set Balance

Is the team well-rounded (biz/tech/blockchain)? Is there sufficient talent and skill in all areas of required development?

5.0
N/A
5 - Excellent, all aspects covered.
Company and Team Score:
4.8

Token Sale

Category Breakdown
Raise Amount Max

Is there a clear cap? Is the maximum raise amount modestly sufficient (as opposed to either greedy or insufficient)?

N.0
N/A
N/A
Raise Amount Min

Is the minimum raise reasonable considering the development plan? Are there raise-amount dependent milestones?

N.0
N/A
N/A
Fund Allocation

Is fund distribution and allocation reasonable and justified?

N.0
N/A
N/A
Token Allocation

Is the ratio of tokens sold to those kept reasonable? Does it prevent the company from having too much control?

N.0
N/A
N/A
Media Presence and Following

Is the sale being talked about in Reddit, Bitcointalk, Social Media, Medium, etc.? Is information available and accessible? Is there interest?

N.0
N/A
N/A
Token Sale Score:
0.0
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