NEO's darkest hour

Editor's Note: This article comes fromChain catcher (ID: iqklbs)Editor's Note: This article comes from

Chain catcher (ID: iqklbs)

, author Gong Quanyu, reproduced by Odaily with authorization.

NEO, once the "Ethereum of China", seems to be gradually fading out of the mainstream view of the public.

On the one hand, NEO, as a public chain project established in 2014 and launched on the mainnet in 2016, has not shown better performance in terms of performance, ecology, and momentum than EOS, TRON and other 18-year mainnet projects. Centralization has been criticized.

In the official annual report of NGD (NEO Global development), "Darkest Hour" has also become the official description of the year and appeared on the title, and another word is "Before Dawn".

So, after NEO has experienced many years of highlights, what is the progress of its technology research and development and ecological construction? What kind of bottleneck has NEO encountered in its darkest moment? What is their latest strategy? After several days of in-depth research, Chain Catcher (ID: iqklbs) hopes to show readers the true development of NEO and its possible future direction through this article.

The road to rise

NEO, formerly known as Little Ant, was first established in June 2014. It was invested by seven people including Da Hongfei, Wang Guan, Xu Yiji, Dianfu Datou, and Chu Xiahu. Many of them became well-known figures in the currency circle later, but only Da Hongfei and Wang Guan continued to carry out the follow-up preparation and development of NEO after the investment, and others actually rarely participated.

NEO’s early investors took a group photo with V God, crown on the left, Kaku on the second, third head on the left, Uncle Da Da on the fourth, V God in the middle, blue collar on the right, Chu Xiahu on the second on the right, Yiji Xu on the third, and Cancer Liu Jialing on the fourth

In the earliest days, NEO's project concept was actually quite different from the current smart economy. Its original intention was to digitize assets and rights in the physical world based on blockchain technology, and to conduct registration and issuance, transfer transactions, liquidation and delivery, etc. through a peer-to-peer network. It is a decentralized network protocol for financial services, and it is planned to be used in equity registration and crowdfunding, P2P online loan registration and transactions and other fields.

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NEO early white paper content, official production

To use the popular terminology to describe it, what NEO has to do is "asset chaining" and "decentralized transactions", which made NEO attract a lot of attention at the beginning of its creation. In September 2015, NEO's official website and white paper were launched at the same time, and the first ICO was launched one month later. The total financing amount reached 2100 bitcoins, which came from 186 accounts. According to the information released by NEO afterwards, the team immediately converted all bitcoins into RMB 4.65 million through the exchange after the completion of the first ICO.

After receiving this money, NEO has fully accelerated in terms of technology development and community building. At the technical level, the NEO testnet was released in November 2015, and the first domestic original consensus mechanism dBFT was released in April 2016; at the talent recruitment level, independent executives such as Tao Rongqi, Li Jun, Yang Wentao, and Wang Tingting joined NEO one after another The team has expanded from the previous team of four or five to 13 full-time members in May 2016; at the level of community building, NEO has built a huge community that is self-operated through volunteers, and has increased investment in overseas communities According to the official statement, the number of people in the community increased from 300 at the end of 2015 to nearly 5,000 in August 2016.

At the same time, NEO’s second ICO started in August 2016, and raised 5,539.19 bitcoins within one month, equivalent to RMB 22.25 million. The number of participants was 1,360, and its popularity was second to none in 2016.

However, with the launch of the NEO mainnet and decentralized exchanges, the conflict between NEO's early vision and reality gradually emerged. Although NEO has made a lot of efforts to promote the digitization of physical assets, due to technical feasibility, policies and regulations, etc., NEO has almost failed to realize the registration, issuance or circulation of any physical assets on NEO. The officially launched smart fund similar to TheDAO Nest also all but disappeared after its release. Affected by this, the NEO currency price hovered below the issue price of the second ICO for a long time.

Under the predicament, NEO started the most important transformation since its establishment in June 2017, which is to upgrade from a digital asset platform to a smart economic platform or public chain, and introduce new concepts such as "smart contracts" and "digital identities". Emphasize the need to attract developers to develop and extend various applications based on the NEO platform. Obviously, these initiatives all bear a strong imprint of "Ethereum", and NEO has since been given the title of "Chinese Ethereum".

Since then, the crazy price rise of NEO currency has also started, from 0.11 US dollars in early 2017 to 9 US dollars in June, 48 US dollars in August, until it reached 162 US dollars in January 2018, and successfully ranked among the "thousand times coins".

With the improvement of NEO's various infrastructures and the increase in popularity, many projects such as Red Pulse have also come to NEO to issue tokens, and most of them have achieved good gains. In terms of organizational structure, the original NEO Council was officially changed to the NEO Foundation in May 2016, with Da Hongfei and Zhang Zhengwen serving as co-chairs. At the same time, NGD (NEO Global Development) and NGC (NEO Global Capital) were established. The former is dedicated to technology research and development , community operation, and the latter, as a profit-making investment institution, promotes high-quality projects and NEO ecological development.

So, is NEO's lack of publicity leading to a bias in public perception, or is the technology and ecology really progressing slowly and hindering the project?

Technological development

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Technological development

The technology of the public chain generally includes consensus mechanism, smart contract, virtual machine, cross-chain, etc., and is manifested in the level of TPS and developer friendliness.

NEO has adopted its 16-year-old original dBFT mechanism, which is a Byzantine fault-tolerant consensus mechanism that achieves large-scale node participation in consensus through proxy voting. "At that time, everyone was using the PoW mechanism, and NEO dared to adopt a brand-new consensus mechanism designed by itself, which is very worthy of respect." Said Mao Zhihong, founder of ArcBlock.

In the dBFT mechanism, ordinary users vote to determine the bookkeeping nodes based on the proportion of currency holdings. When a consensus needs to be passed, a spokesperson is randomly selected from among these bookkeeping nodes to draw up a plan. If more than 66% of the nodes agree If this plan is adopted, a consensus is reached; otherwise, the speaker is re-elected and the voting process is repeated.

In terms of TPS performance, the chain catcher did not find any relevant information in the NEO block browser, but NGD R&D director Lin Pengtao told the chain catcher that the TPS of the NEO main network can reach a maximum of 1000 in the laboratory and 300 to 500 in the production environment. To prevent traffic attacks and other system security issues, NEO currently has restrictions on TPS.

The aforementioned mechanism guarantees the NEO system to reach a consensus decision to a certain extent, and prevents forks and negative impacts from malicious nodes. At present, NEO has a total of 7 consensus nodes, but before July 2018, all nodes were controlled by the NEO Foundation. In July 2018 and October 2018, it was elected as the consensus node of the NEO main network, and the NEO main network took the first step towards decentralization.

According to Dr. Aaron, a senior blockchain expert, this is because NEO has temporarily abandoned the fundamental nature of blockchain decentralization in pursuit of efficiency. Its essence is a private chain that can be accessed by the outside world, and user participation is low. "NEO does not give power to the community, only distributed office, no decentralized empowerment, and it is not even as good as EOS's much-criticized super nodes. This may be the most prominent community governance issue of NEO." Aaron explain. Ou Lin (pseudonym), the chief scientist of a public chain, also believes that the governance model of NEO lacks democracy.

At the same time, many developers also recognized NEO's approach, "Blockchain is still in its infancy, and complete decentralization will lead to slow project development. Early centralization is beneficial to project development, as long as the project party maintains its original intention and adheres to the blockchain. The concept can weaken the centralization method." A public chain developer Li Li (pseudonym) commented.

There are signs that NEO is accelerating the pace of decentralization. In addition to the aforementioned new nodes, Swisscom Blockchain has now become the consensus node of the NEO test network. The NEO consensus node application system on the official website has been opened again after April 2016. The official said that in 2019 NEO will fully open the consensus node election and voting.

However, since the NEO Foundation itself has obtained 50% of the management rights of NEO tokens, and a large number of NEO tokens have been obtained after the September 4 withdrawal, at least 50% of the NEO tokens are still under the control of the NEO Foundation. It means that the election result is still determined by the NEO Foundation in many ways. “Because of NEO’s previous accumulation, we have launched on-chain governance and off-chain governance mechanisms respectively. We will vote for each other as long as they can prove that they are of great help to the NEO ecosystem.” said Lin Pengtao, R&D director of NGD.

At the smart contract level, NEO uses the self-developed NeoVM (NEO Virtual Machine) as its smart contract execution environment, which also makes NEO the second public chain project to launch its own VM. "NEO's most influential technology is its NeoVM, which is relatively leading in the entire industry." Lu Xinhao, co-founder of Wanwu Chain, commented.

According to Chain Catcher (ID: iqklbs), NeoVM already supports C#, Java, Python and other traditional development languages, which has considerable advantages in attracting traditional developers. However, NeoVM is not compatible with Ethereum's Solidity development language like Tron and other projects, which forms a certain threshold for Ethereum developers to migrate DApps.

In 2018, NEO has also upgraded its VM several times. While realizing stack isolation between smart contracts and improving the security and reliability of smart contracts, the scope of application has also been further expanded. Developers can deploy it outside the NEO network. place.

Since its launch more than two years ago, the NEO main network has generally operated stably, and there have been almost no public security incidents. However, the core security team of Qihoo 360, Tencent Zhanlu Lab, and security audit company Red4Sec have repeatedly pointed out vulnerabilities.

In the white paper, NEO also proposed technical highlights such as cross-chain interoperability protocol, anti-quantum cryptography mechanism, and distributed storage protocol. At present, NEO officials rarely talk about the development progress. "From a conceptual point of view, these technologies have certain innovations, but they have not revolutionized the existing blockchain technology." Aaron said, "NEO's technology can only be said to be quite satisfactory, and there are no special highlights."

Lu Xinhao used "solid" to describe NEO's technical level. He believed that the NEO team has no problems in research and development, but is lacking in ecological implementation.

NEO also proposed the concept of NEO3.0 in July 2018, redesigning the core modules of NEO, including adjusting the dual-token economic model, implementing dynamic sharding, expanding smart contract APIs, and supporting global variables, etc., to better serve Enterprise-level large-scale applications.

"The established strategy and technology orientation in the early stage of the project are difficult to carry out effective iteration and strategy revision in the later stage, so the founding team is more likely to start anew after the first project gets fuel. This is a kind of internal value fork." Aaron said.

Ecological construction

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Another crucial task of the public chain is ecological construction, which requires NEO to attract as many developers as possible to build DApps and related infrastructure on the one hand, and to attract as many ordinary users as possible to use these DApps, Improve the activity of the main chain, and finally build a complete public chain ecosystem.

The most intuitive achievement of ecological construction is reflected in the main network data. According to the data of the block browser Tokenview, the daily transaction volume of the NEO main network in the past month is about 20,000, the daily active addresses are about 4000-5000, and the daily new addresses are about 400-700, and All showed a downward trend.

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The trend chart of the number of transactions and the number of active addresses on the NEO mainnet Source: Tokenview

At the same time, the main data of public chains such as NEO's competitors Ethereum, EOS, and Tron have remained stable or even increased, and the absolute value of multiple data far exceeds NEO. Therefore, NEO's slightly bleak data cannot be mainly attributed to the impact of the bear market, and may be more of its own reasons.

From the perspective of DApp development, although the block browser shows that NEO already has nearly a hundred asset types, many asset projects have not been further developed into DApps, and other DApps have not entered the mainstream field of vision due to practicality and other reasons, and there are very few users. . No matter in the DApp display areas of major wallets or major DApp collection websites, there are very few NEO DApps. "It's like a big shopping mall with a lot of products on sale, but not many customers," Aaron said.

In addition, NEO has also invested in a large number of blockchain projects through NGC. Last year, at least more than 20 public investment cases were initiated, but most of the projects have not yet produced substantial synergy with NEO, and their contribution to NEO's DApp ecology is weak.

As for competing public chains such as EOS and Tron, although they are also slow to advance in practical DApps, they have acquired a large number of users through vigorous development of gambling games and marketing, thereby obtaining beautiful data performance on the main network.

"We are also increasing our investment in the game field, hoping to become the preferred platform for game developers, but unlike developing casino games, we want to attract games that are really playable, such as turn-based games or sandboxes. Such games.” Zeng Cheng, head of NGD Overseas Community Operations, said, “We also intend to provide some good solutions and infrastructure for the blockchain game industry.”

In the past year, NEO has also held several blockchain game competitions with generous rewards, trying to attract game developers. According to Zeng Cheng, currently NEO has launched three or four game DApps, and another twenty or thirty games are under development.

Wang Kuo, founder of NEO's partner LAYA.ONE, agreed with NEO's game strategy: "Those fund games are not real games, and they are played by tens of thousands of coin-holding users in the blockchain industry. NEO We hope to attract traditional gamers and bring ordinary players into this market.”

However, there are still many difficulties. NEO is not only facing competition from public chains such as EOS and Tron for developers and users, but the blockchain game industry itself is also facing many difficulties that have not yet been overcome. "All payment behaviors in blockchain games are actually based on digital currency wallet payments, but real players may not have wallets, so how to build a system that allows traditional payment methods to be smoothly connected to the blockchain world is very important, and this aspect There is no good solution yet,” said Wang Kuo, founder of LAYA.ONE.

Ou Lin pointed out that blockchain games have high requirements on the performance of the chain, and NEO may not be able to keep up in terms of block generation time and throughput.

Another shortcoming of NEO's ecological construction is the lack of third-party developers. At present, a large number of developers come based on the funding, investment or competition awards of the NEO Foundation. This does play a more important role, but it also shows that NEO is still It does not have the industry influence of Ethereum and EOS.

Although NEO has long been known for its excellent community building, there are mainly two types of NEO communities. The first is the technical community. They used to be more enthusiastic about the main network and its supporting facilities such as compilers, block browsers, and technical documents. , or promote NEO technology through various activities, less involved in the application development level; the second is the community of token holders or enthusiasts, they mainly gather because of the rise of NEO tokens or project vision, and progress in NEO itself It is difficult to contribute at the level of ecological application under unfavorable circumstances.

Another bad issue is a major diversion in the NEO community. At the end of 2017, the Ontology project initiated by Onchain was officially born, and Onchain was a profitable company founded by Da Hongfei, Zhang Zhengwen and other NEO teams in early 2016. At that time, the official said that Onchain was the operating entity of Xiaoyi, mainly responsible for Xiaoyi System development and operation, while providing blockchain customization services for other financial institutions.

After the birth of Ontology as a separate public chain, many Onchain executives or technicians joined the Ontology project, including Li Jun, Chief Architect of Onchain, Yang Wentao, VP of Onchain Business Development, etc., because most of their previous work revolved around NEO After that, NEO's talent strength and related businesses will inevitably be impacted.

At the same time, the project also attracted many developers and followers from the original NEO community, which had a negative impact on NEO's community building. Lu Xinhao believes that the current performance of the Ontology community is even more eye-catching than the NEO community.

In addition, many NEO executives have left in recent years to create other projects, such as Wang Guan, the co-founder of NEO and the co-founder of Nebulas, and Wang Tingting, the former vice president of Onchain and the founder of Bottos Chain. Tao Rongqi, the former secretary-general of the NEO Foundation, became the founding partner of the sub-organization NGC in the second half of 2018, but he often appeared at major events as the founder of the research institution X-Order, not as NGC.

"NEO encourages entrepreneurship within NEO. Some people in the company and many volunteers have formed a new team with new ideas, and Uncle Da is also very supportive." Wang Tingting told the chain catcher (ID: iqklbs). While more and more high-level people are leaving, there is very little information about a certain industry leader joining the NEO team.

Of course, there are also employees of the NEO system who continue to contribute to the NEO ecosystem after leaving their jobs, such as Liu Yongxin and Li Jianying. They established the NEL New Economy Laboratory after leaving Onchain. With the funding of the NEO Foundation, they assisted in the development of the NEO block on the one hand. Browsers, wallets and SDKs, etc. On the other hand, organize course teaching, online exchange group forums and offline MeetUp, etc., becoming one of the largest developer communities in NEO China.

However, on the whole, NEO’s ecological construction has largely been affected by this, and its original value has been diverted many times. At the same time, it has not been able to find a breakthrough in the development strategy.

Aaron further pointed out that the deep-seated reason for NEO's ecological construction is that NEO's power and rights are in the hands of the project party, and third-party development teams are unwilling to develop new Dapps on such a private chain with little freedom. Its DApp project is built for quantity, and there is not much competitiveness in essence. "If there is no real valuable product, how can it attract customers?"

Media person Zhang Jilai (pseudonym) pointed out that public chain projects such as Ethereum, EOS, and wave field all have a leader who is good at raising flags and publicity. However, he seldom speaks out on social media or communicates with the public. Generally speaking, he only occasionally speaks out in communities or activities, and most of his words are not very spreadable. Although this is just a personal style preference, it has actually become a disadvantage of NEO .

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In general, NEO is experiencing a crisis that is no less dangerous than its predecessor Ethereum, and has encountered bottlenecks of varying degrees at the technical and ecological levels.