Neo will launch EVM-compatible and MEV-resistant side chains, aiming to improve DeFi friendliness

On October 27, 2023, seven years after the release of the Neo mainnet, Neo founder Da Hongfei announced a major new initiative for Neo: Neo is creating a platform that can resist miner extractable value (MEV) attacks and be compatible with Ethereum. Virtual Machine (EVM) compatible sidechain. Da Hongfei announced the news during the keynote speech at the Neo Asia Pacific Hackathon Hong Kong Finals. He said that as an extension of Neo N3, the new side chain will inherit Neo N3’s solid economic model and dBFT consensus mechanism, while having the additional advantage of resisting malicious MEV attacks.

Features of Neo sidechain

The mission of Neo sidechains is to ensure security, privacy, and a smooth experience in the increasingly complex DeFi space. The goals of sidechains include reducing friction, lowering barriers to entry, and providing a smooth user experience.

Neo’s goal is to resist malicious MEV attacks to balance the competitive relationship among users in DeFi and dApps and create a safe and fair playing field. These efforts demonstrate Neo’s commitment to fostering an open, fair, and value-driven blockchain platform that benefits users, developers, and stakeholders.

The sidechain is under development and is expected to be released by the end of 2023. It inherits the Neo mainnet’s ability to resist malicious MEV attacks.

Since transaction details in DeFi are publicly visible, malicious MEV attacks have become a significant threat in this space. Due to this visibility, attackers can attack transactions using advanced bots; these bots can continuously monitor menpools, perform profitable arbitrage, or even manipulate the order of trades to advance trades. As DeFi expands rapidly, the threat level grows in tandem with it.

Neo sidechain provides a powerful solution to these problems, including many innovative features, such as transaction packaging or agency contracts:

• By packaging transactions, sidechains will allow users to encrypt transaction content and metadata, effectively hiding sensitive information from potential attackers.

• Proxy contracts will enhance user privacy by hiding their identity, disguising the true sender of transactions and introducing anonymity to deter abuse.

The above security measures combined with Neos dBFT consensus mechanism will establish an environment free of malicious MEV attacks and improve the transaction experience of network users.

The original intention of Neo sidechain

The new Neo sidechain will take full advantage of Neo N3, such as:

- dBFT consensus mechanism developed by Neo: improves transaction speed, scalability, and fairness while maintaining decentralization and resilience.

- NeoVM (the first non-EVM smart contract system): enables developers to write smart contracts in multiple preferred languages ​​(including C#, Go, Python, Java, and TypeScript).

- Dual-token NEO and GAS model pioneered by Neo: Improves flexibility, scalability, and enhanced governance while reducing volatility and providing incentives for the Neo ecosystem.

Neos consensus and economic model always reflect advancement. But the team also recognized the need to provide better development experiences and opportunities for developers who are unfamiliar with the Neo development environment. However, building a multi-language-friendly development environment like Neo is expensive. As WebAssembly (Wasm) matures, it becomes a viable alternative. Ultimately, Neo decided to cultivate a new option for the Neo ecosystem that is more developer-friendly by introducing EVM-compatible Neo sidechains in parallel to the Neo mainnet.

A new chapter for Neo

The release of sidechains will open a new chapter in Neo’s continued evolution. Through this innovation, Neo will further become a mutually beneficial ecosystem that provides new opportunities for all participants.

(1) User-friendly

User-focused improvements include:

- Wallet compatibility similar to Metamask, providing users with seamless access to the Neo ecosystem and simplifying the onboarding process.

- Emphasizes fairness and aims to provide strong protection against abuse and unethical behavior within the network.

- Free transactions that reduce barriers to entry and promote an inclusive user experience.

(2) Friendly to developers

Through Neo sidechains, developers in the ecosystem will receive:

- Enhanced security: The battle-tested foundation on which applications are built guarantees a high level of security.

- Enhanced scalability and decentralization support: The powerful architecture guarantees high transaction volumes per second, improves scalability, and provides necessary support for decentralized applications (dApps) with fast transaction speeds.

- The most streamlined migration experience yet: a smooth migration process with seamless tools to migrate Solidity contracts from Ethereum.

(3) Friendly to other stakeholders

As a driving force for Neos growth, new sidechains provide:

- Strengthen the utility of the value proposition of NEO and GAS tokens.

- Expand use cases to make GAS more functional.

- Enhanced on-chain activities and applications to create a more dynamic and liquid market environment.

How can the community get involved?

With the upcoming release of Neo sidechains, Neo invites community members to join the action and contribute to the new stage that Neo has entered:

1. Vote for the consensus node: Community voting will determine the Neo side chain consensus node;

2. Use creativity: We welcome the creativity of developers and innovators and build together;

3. Name the future: Neo is soliciting a name for a Neo sidechain that reflects its transformative nature.

The above related activities will be launched in the near future. For details, you can follow the Neo official account to get the details of the activities.