The Definitive Guide to the Neo Blockchain

The Ultimate Resource on All Things Neo

In this article, we will explore Neo, a blockchain platform that facilitates the development of smart contracts and tokens. This guide will be a short as possible, while still covering all aspects of Neo. This is the definitive guide to the Neo Blockchain, covering:

Neo’s history

How Neo works

The ecosystem: dApps, wallets, block explorers and dev communities

Common criticisms

Price history

Neo’s relation to Ethereum and Ontology

Neo’s roadmap.

A brief history

Originally, Neo was called AntShares. The project was launched in 2014 Da Hongfei and Erik Zhang. The project held an initial coin offering, in which Antshare tokens were sold for $0.03 (current prices hover around $10). A total of 100 million Neo were created in the Genesis Block, of which 50 million were retained by the project itself.

The old Antshares logo

The project’s popularity increased further in 2017, when it re-branded to Neo. It is often referred to as ‘China’s Ethereum’, due to Neo’s geographical roots and its similarity to Ethereum in terms of functionality.

Neo has developed quite rapidly since the launch of its main-net in 2016, and the project is well on its way to its biggest release yet: Neo 3.0. According to Neo’s website, the project now has:

2,000,000+ user addresses

5,00,000+ community members

100+ deployed dApps

300+ technical contributors

In 2018, a new organizational structure was adopted, with the Neo Foundation, Neo Global Development and Neo Global Capital being introduced. More recently, the Neo Ecoboost program was set up, with the aim to grow Neo’s ecosystem by investing over $100 million into high-potential projects.

Neo’s vision is to realize a ‘smart economy’, by utilizing blockchain technology and smart contracts to issue and manage digital assets.

The basics:

Consensus mechanism:

Neo uses a delegated Byzantine Fault Tolerant (dBFT) consensus mechanism to maintain and update its blockchain. There are 7 nodes, called bookkeepers. These bookkeepers create all blocks and add them to the blockchain. They are elected by token holders, through a staking/voting process.

The low amount of nodes make the network fast, allowing for a theoretical 1000 transactions per second. While this is much more than most competing chains, this transaction throughput is achieved at the cost of a substantial amount of decentralization. However, nodes have strong incentives not to behave maliciously, as they are heavily invested into Neo. dBFT also ensures finality, making blockchain splits (forks) impossible, ensuring transactions are never reverted.

Smart contracts

Neo is a smart contract platform, which means it enables more complex transactions than blockchains such as Bitcoin or Litecoin. Users can program and deploy their smart contracts, for others to interact with. With smart contracts, users are free to build decentralized applications (DApps) which are run by the nodes of Neo’s blockchain. Smart contract programming on Neo can be done in a variety of programming languages, including C#, Python, Java, JavaScript (JS/TS) and Go, which makes it easy to on-board new developers into the ecosystem

Neo and Gas

Neo’s blockchain makes use of two native tokens: NEO and GAS. Whereas NEO allows token holders to vote on bookkeepers (and in the future, more governance aspects), GAS is the fuel required to run smart contracts. In other words, users pay the nodes who execute all transactions with GAS, in order to invoke smart contracts. While NEO itself was distributed in an ICO, all GAS (a corresponding 100m in total) is distributed to NEO holders over a timespan of about 22 years.

NeoVM, NeoFS and Neo ID

The NeoVM is a virtual machine built by Neo, which executes the smart contracts on the network. It is lightweight and has the advantages of high certainty, high concurrency, and high scalability.

is a virtual machine built by Neo, which executes the smart contracts on the network. It is lightweight and has the advantages of high certainty, high concurrency, and high scalability. NeoFS is a distributed storage protocol and is primarily intended to be primarily used by DApps for data storage and as a Content Delivery Network. It is a separate, although integrated, protocol, which “can be used to create private distributed storage systems for SMEs, which use regular servers or clusters (data centers), and for storing large amounts of unstructured IoT data.”

is a distributed storage protocol and is primarily intended to be primarily used by DApps for data storage and as a Content Delivery Network. It is a separate, although integrated, protocol, which “can be used to create private distributed storage systems for SMEs, which use regular servers or clusters (data centers), and for storing large amounts of unstructured IoT data.” NeoID is a decentralized identity protocol built on NEO. It empowers users and organizations to have better control of their identities and delivers a higher degree of trust and security to the smart economy. (under development)

The ecosystem

This guide wouldn’t qualify as the definitive resource on Neo without also discussing Neo’s ecosystem.

Neo Foundation, NGD, and NGC

Neo Foundation: The main foundation, which partakes in the development of the ecosystem, running of nodes, marketing efforts, etc. The Neo Foundation regularly releases Financial Reports.

The main foundation, which partakes in the development of the ecosystem, running of nodes, marketing efforts, etc. The Neo Foundation regularly releases Financial Reports. Neo Global Development: Manages the Neo Eco Fund, aimed at ecosystem development, by providing developer grants, establishing partnerships and support communities and projects.

Manages the Neo Eco Fund, aimed at ecosystem development, by providing developer grants, establishing partnerships and support communities and projects. Neo Global Capital: Manages Neo Global Capital Fund 1, which aims at investing in high-potential projects. Focused on returns.

Developer communities

Aside from Neo itself, several independent developer communities have emerged. Here are the most important ones:

The (English-speaking) Neo community can be found on Neo’s telegram, GitHub, Discord, and Reddit.

Wallets

NeoLogin logo

Wallets are the software used to receive, store and send tokens. You will find a list of Neo’s most-used wallets below. To understand the differences between these wallets, read our guide on Neo wallets.

dApps

Arguably the biggest dApps in Neo’s ecosystem are Nash and Switcheo, both decentralized exchanges. Cool projects also include Novemgold, a gold exchange and ecosystem, and Alchemint, a stablecoin issuing platform. Neo is furthermore increasingly attracting new blockchain-based games. Notable mentions in this category include Cardmaker, NEOLand, NEOFish, Monster World, Blocklords, and Blockchain Cuties.

A (slightly outdated) overview of Neo’s DApp ecosystem

A full list of Neo-based DApps is maintained on ndapp.org. To see usage statistics, visit State of the Dapps.

Block explorers

Block explorers are an important resource for a blockchain ecosystem as they allow users to easily verify blocks and their transactions. Here are the most important block explorers for Neo:

Dev resources

To get started with developing smart contracts and dApps on Neo, a few great resources for developers exist:

Neo’s dev resources

Neo one: a resource with tools to write smart contracts in typescript.

Awesome Neo: a CoZ curated list of awesome Neo libraries, applications, and resources. ← highly recommended

Common Criticisms of Neo

Centralization of nodes : The Neo Foundation itself runs 5 out of 7 nodes. As such, critics argue that the chain is not a decentralized system at all, and is fully dependent on a centralized party for its maintenance. However, the current model does allow Neo-based Dapps to scale, and plans exist to adopt a more decentralized model in the future.

: The Neo Foundation itself runs 5 out of 7 nodes. As such, critics argue that the chain is not a decentralized system at all, and is fully dependent on a centralized party for its maintenance. However, the current model does allow Neo-based Dapps to scale, and plans exist to adopt a more decentralized model in the future. Lack of developer activity: In terms of development by third party teams and app developers, Neo lags considerably when compared to Ethereum. Empty blocks still occur regularly, and the amount of applications deployed on Neo is relatively low. Currently, high costs associated with the deployment of smart contracts are a barrier for new developers to fool around. This pricing model is completely revamped with the upcoming Neo 3.0 update.

Alexa statistics show a steady increase in terms of interest in Neo over the last 2 years.

Price history

Of course, this is crypto, so this article wouldn’t be complete without a small overview of historic prices for Neo and GAS. Like any crypto, both Neo and Gas peaked in Januari 2018, after which the bear market took its toll. Recently, volumes and prices have started recovering after the near 95% decline since the highs.

Neo price history

Gas price history

Relation to Ontology

Ontology logo

Ontology, another blockchain project, was founded by Onchain, a Shanghai-based R&D company founded by Neo’s founders, Da Hongfei and Erick Zhang. Neo and Ontology are independent projects, with their own blockchain. The two projects collaborate and signed an“MOU Concerning Strategy and Technology” in May 2018. However, whereas Neo is a permissionless blockchain focused on the adoption by smart contract developers globally, Ontology focuses on enterprise adoption. Ontology, however, does use the Neo Virtual Machine for its execution of smart contracts.

Neo vs. Ethereum

The Neo blockchain is a competitor to Ethereum, as their goals and functionality largely overlap: both blockchains allow users and developers to deploy their smart contracts. Both allow for the creation of decentralized applications (DApps) and blockchain-based games. Still, differences exist, so here’s a short side-by-side comparison:

Side-by-side comparison Neo and Ethereum

Neo’s Future

Neo is gradually moving towards Neo 3.0. This will be a major upgrade for the blockchain project, which includes optimizations to its consensus mechanism and pricing model, an on-chain governance system for Neo holders, a P2P-protocol redesign, NeoVM optimization, the implementation of NeoFS and the introduction of NeoID. See the roadmap for Neo 3.0 for more information.