ICO Review: NEO, the New Chinese Ethereum

Since rebranding from ANS in June 2017, investors have flocked to buy NEO. But what exactly is NEO and how is it different from other blockchains? This review will break down all you need to know about the NEO project.

NEO is a blockchain platform commonly referred to as the Chinese Ethereum. As the first open source blockchain from the mainland, NEO has captured the attention of investors from both West and East. Excited investors have flocked to buy NEO tokens after rebranding from ANS in June 2017. NEO has rallied 2000% to a high price of $52 per token since June.

But what exactly is NEO and how is it different from other blockchains?

This review will break down all you need to know about the NEO project. It will cover

  • Background and history of the project
  • The team behind the project
  • The NEO blockchain product and what it can do
  • Features of the NEO blockchain
  • NEO's plans, roadmap, and visions

Background and history

NEO launched in 2014 as an open source blockchain known as Antshares (ANS). It was funded via seed capital with a goal to reinvent commerce into a smart economy powered by blockchain. It was not until November 2016 that Antshares published a white paper outlining details of its lightweight universal blockchain.

Antshares was an ideal name derived from the manner in which ants collaborate in ant colonies. NEO envisions a blockchain powered economy where people can collaborate from anywhere in the world.

Rebranding to NEO, which means young and innovative in Greek, reflects the progress of the project since its phase 1 and 2 initial coin offerings.

Who are the team behind the project?

ONCHAIN, a Chinese corporation based out of Shanghai developed the NEO platform. Da Hongfei, the CEO of Onchain, is also the creator of NEO.

Da Hongfei and the CEO, Eric Zhang co-founded NEO. A team of close to 20 people supports them in development. Two core developers, half a dozen contributing code, a few academic, technical advisors and code developers from the community.

What about the Product?

NEO is a platform for swapping commercial value in the real and virtual world in real time. You can transmit and exchange value as easy as text messages anywhere in the world.

NEO is a decentralized, distributed ledger protocol for enabling the exchange of digitized assets. Not all assets on this platform need to be purely digital assets such as cryptocurrencies. NEO provides a smart bridge for turning real world assets and titles into digitized form. The foundational blocks of a smart economy are first and foremost to represent assets on a blockchain platform.

NEO uses these building blocks, to power the transfer, exchange, and trade of assets on its platform.

Initially, asset owners deposit and register their assets or property on the platform. NEO's e-contracting functions recognize these assets through a legally binding digital certification program. Once on-boarded, assets can be exchanged in a peer to peer fashion. Recording, clearing, and settlement all occur on NEO using its smart contract 2.0 feature.

On NEO's ledger protocol, assets such as equities, claims by creditors, financial contracts, bills, currencies, and loyalty points are digital. Once assets are on record, functions such as supply chain financing, p2p lending, equity crowdfunding and stock ownership plans become possible.

Additionally, a digital assets exchange can exist on NEO to support trading of all types of assets between peers and corporations. There is no limit to devices; trading works on both personal computers and smartphones.

Effectively, NEO connects people from any device across the world to a single smart economy.

How does NEO achieve this smart economy?

NEO has come up with features on its blockchain that is a step up compared to existing blockchains such as Ethereum.

  • NEO has a protocol for making multiple blockchains interoperable. A multichain protocol adds to its utility and means users do not have to switch to another blockchain. NEO has secured a patent for interoperability across distributed chains.
  • NEO supports multiple programming languages such as Java, Go, C#, Kotlin, Python, and Javascript. On Ethereum for example, developers have to learn solidity to write smart contracts. NEO lowers this barrier by allowing programmers to write contracts in their language of choice. A compiler connects and converts common languages into op code smart contracts.
  • Support for conventional programming languages will attract a wider community of developers.
  • NEO supports decentralized applications Dapps and smart contracts just like Ethereum. NEO's design of smart contracts and run time environment is superior to existing smart contract platforms. It is more user-friendly, scales and performs better with improved security.
  • There is a significant reduction in latency for transactions and a drastic improvement in throughput.
  • NEO takes a different approach in design by having electronic contracts instead of tokens.
  • NEO uses delegated proof of stake for consensus. There is no mining on this network.
  • NEO also makes use of digital certificates to assure proof of ownership of assets on the public chain. Certificates are enforceable in the real world because law backs them. Users can trust the digital assets are representative of the real world state.

What are the terms of the ICO token sale distribution?

NEO conducted its token sale in 2 phases: the first on October 2015 and the second on August 8th, 2016. The total amount raised in both phases was 8,220 BTC. This token sale raised 2,100 BTC in phase 1 totaling $ 1.05 million and 6,120 BTC was in phase 2 totaling $4 million. 

  • A total supply of 100 million ANS is available
  • 40 million ANS distribution for the ICO token sale
    • 17.5 million in phase 1
    • 22.5 million in phase 2
  • 10 million token reservation for early contributors and development team
  • The remaining 50 million ANS  escrowed via a smart contract for a year exclusively for bounty programs and strategic investments. Also, only a maximum of 15 million is withdrawable for distribution per year.

NEO tokens do not represent any stake or equity. Their only utility is to vote as nodes and confirm transactions on the NEO blockchain. NEO tokens can also be used to acquire AntCoins (ANC). Any person or entity registering assets on the NEO blockchain will have to buy and use ANC. ANC supply is fixed at 100 M which are destroyed immediately after use for registering an asset.

Since rebranding to NEO and simultaneously announcing partnerships and road map, the market cap surged to $2.6 billion in 3 months. 1 NEO token traded at a high of $52 on August 14, 2017.  On 11 cryptocurrency exchanges, mostly in China NEO is traded against bitcoin BTC, ethereum ETH and Chinese Yuan CNY.

The exchanges include Bittrex, Yunbi, Binance, and Yuanbo. Major Western cryptocurrency exchanges are yet to list NEO.

Coinmarket cap ranks NEO as the 10th most capitalized cryptocurrency in the world.

The project has got investors excited, especially after being linked to Microsoft and Alibaba.

What are the plans, vision, and roadmap of NEO for the coming year? 

NEO has positioned itself as the Ethereum of China. It has attracted strategic partnerships with top corporations in China as well as companies in the cryptocurrency industry.

  • NEO has partnered with Bancor, a decentralized smart token platform that raised $150 million through an ICO in June. Binance a digital assets exchange agreed to list NEO tokens on its platform alongside Coindash, a social trading platform for crypto assets. Binance and Coindash plan to leverage NEO's asset exchange smart contracts for future integration.
  • Software giant Microsoft announced active ongoing projects with NEO. Microsoft will collaborate on linking NEO to its Azure blockchain platform as a service.
  • Nest fund is a decentralized autonomous corporation built using smart contracts on NEO's blockchain. It is an outcome of collaboration with Wings and Coindash to create and manage a decentralized autonomous organization using NEO's smart contract 2.0 technology.
  • NEO is working closely with Chinese government agencies to map assets on the real world with smart contracts by leveraging digital certification. Chinese authorities will aid in certifying real world assets before digitization.
  • NEO has big plans to dominate China's blockchain industry. The project featured at two government sponsored blockchain events. As the only open source blockchain project in China, it has managed to stir the Western blockchain industry. 

Verdict

NEO is a project worth watching because of its presence in the world's largest economy. It is comparable to Ethereum, which has taken off wildly in the past 6 months.

It is difficult to predict the future and which blockchain platform will win in the end. The West has largely benefited from the development of decentralized applications on Ethereum. Initial Coin offering (ICOs) fund raisers have largely been from the west. The language barrier between East and West blurs what knowledge of the potential demand for smart contracts in China. The potential for a similar ICO craze in China could bode well for NEO.

If NEO can capture this market, it will power ICOs and new decentralized apps tailored for China's economy. With its improved features, scalability, and throughput, NEO has the potential to be as big as Ethereum.