NEO Network Went Down as 15 Million Unlocked Tokens Moved

Published on 29 October 2017 by Cryptovest Staff

NEO users experienced network downtime today, on October 28, which seemed to be linked to a major move of 15 million NEO tokens.

The downtime occurred around block 1512993 and it took over an hour before transactions resumed again.

Shortly after the network went down, the community started to question the downtime, especially since there was no prior warning or announcement.

One user managed to get an update from the NEO Slack:

“… we talked to NEO Council, there was some manual checks that needed to be done for 50mm fund unlock”.

Information coming in later clarified that the network went down to complete manual checks in order to unlock the 50 million NEO fund managed by the NEO Council. The fund was locked out for a period of one year, which ended on October 16, 2017.

The transaction details can be viewed on neotracker, which shows that the 50 million NEO fund was broken into 15 million and 35 million tokens. The 15 million unlocked tokens are aimed at long-term investments which will help NEO grow.

While the move was not announced in advance, it has always been in NEO’s original distribution plan, which can be seen here, and is detailed below for reference:

NEO's 100 million tokens is divided into two portions. The first portion is 50 million tokens distributed proportionally to supporters of NEO during the crowdfunding. This portion has been distributed.

The second portion is 50 million NEO managed by the NEO Council to support NEO's long-term development, operation and maintenance and ecosystem. The NEO in this portion has a lockout period of 1 year and is unlocked only after October 16, 2017. This portion will not enter the exchanges and is only for long-term support of NEO projects. The plans for it are as below:

  • 10 million tokens (10% total): to motivate NEO developers and members of the NEO Council
  • 10 million tokens (10% total): to motivate developers in the NEO ecosystem
  • 15 million tokens (15% total): to be used for cross-investing in other block-chain projects, which are owned by the NEO Council and are used only for NEO projects
  • 15 million tokens (15% total): to be retained as contingency
  • Annual use: in principle shall not exceed 15 million tokens

Given the recent unlock, there were fears in the community about a major dump, but given how these tokens are to be used for investment in other blockchain projects, it is very unlikely that they will find their way to exchanges.

Meanwhile however, a lot of the community members have expressed their displeasure with today’s unannounced downtime and a Reddit user by the name of cryptohiwatari seems to have put together a post detailing these issues.

It remains to be seen whether the NEO Council will take more proactive measures in the future about keeping the community in the loop about such moves. However, given the recent sentiments, it would be in their best interest to do so.