On October 27th, seven years after the launch of the Neo MainNet, Neo founder Da Hongfei revealed a seminal new step for Neo: Neo is creating an Ethereum Virtual Machine (EVM)-compatible sidechain that resists manipulation of Miner Extractable Value (MEV). Da Hongfei discussed the news in his keynote speech at the Neo APAC Hackathon Hong Kong Finale. He advised that as a true extension of Neo N3, the new sidechain inherits Neo N3’s robust dBFT consensus mechanism, with the added advantage of MEV protection.
This significant announcement opens a new chapter for Neo, empowering users, developers, and stakeholders with unparalleled possibilities and launching a new wave of innovation that will shape the Web3 landscape.
The Neo Sidechain’s mission is to ensure security, privacy, and a smooth experience in the increasingly complex DeFi landscape. Guiding objectives for the sidechain include lower friction, more accessible entry, and a seamless user experience. We aim to implement MEV-resistance to level the playing field for DeFi and app users, creating a secure and fair environment. We’re also committed to enhancing the utility of NEO and GAS tokens in the Neo ecosystem. Together, these steps represent Neo’s dedication to fostering an open, fair, and value-driven blockchain platform that benefits users, developers, and stakeholders alike.
The sidechain is under development and the TestNet is aimed to be launched at the end of 2023. It inherits several of the differentiating attributes of the Neo MainNet, as discussed below.
The sidechain will further set itself apart with MEV resistance. MEV attacks have posed a significant threat as DeFi has risen to prominence in the blockchain sphere, primarily because transaction details are openly visible in this sphere. The threat level continues to grow in tandem with DeFi’s rapid expansion. Thanks to this visibility, attackers can use sophisticated bots to attack transactions; the bots can continuously monitor mempools, execute lucrative arbitrage, and even manipulate transaction orders to front-run them.
The Neo Sidechain offers a robust response to these concerns, incorporating innovative transaction “enveloping”. By “enveloping” transactions, the sidechain will let users encrypt transaction content and metadata, effectively concealing sensitive information from potential attackers.
Alongside Neo’s sophisticated Delegated Byzantine Fault Tolerance (dBFT) consensus mechanism, these advanced security measures will establish an MEV-free environment and enhance the trading experience for network users.
Neo’s consensus and economic models perform well today. But we see an opportunity to improve the developer experience for those less familiar with Neo’s development environment.
Supporting a multilanguage-friendly development environment as Neo does comes at a high cost. By introducing the EVM-compatible Neo Sidechain alongside the Neo MainNet, we aim to cultivate a new option for the Neo ecosystem that can attract existing blockchain innovators who have built their skills using the Ethereum stack and toolchains. Welcoming a broader range of developers will further accelerate innovation and growth across the ecosystem.
A New Chapter for Neo
This announcement opens a new chapter in Neo’s ongoing evolution. With this step, we look to further transform Neo into a mutually beneficial ecosystem offering new opportunities for all participants.
User-centric enhancements include
- Compatibility with EVM wallets such as MetaMask, offering seamless access to Neo’s ecosystem for Ethereum natives to streamline the onboarding process
- An emphasis on fairness designed to provide robust protection against exploitation and unethical practices within the network
With the Neo Sidechain, developers in the ecosystem will gain
- Enhanced security: A battle-tested foundation for building applications ensures a high level of security.
- Enhanced scalability and decentralization support: A robust architecture guarantees high transactions per second (TPS), enhancing scalability and providing the necessary support for decentralized applications (dApps) with swift transaction speeds
- The easiest migration experience yet: A streamlined migration process, complete with seamless tooling to port over Solidity contracts from Ethereum
For stakeholders, the driving force behind Neo’s growth, the new sidechain offers
- A fresh utility that strengthens the value proposition of the NEO and GAS tokens
- Expanded use cases that make GAS a more versatile asset
- Heightened activity and usage, creating a more dynamic and liquid market environment
Call to Action
As we move closer to our official launch of Neo Sidechain, we invite you, our Neo community members, to join us in a key set of actions that will set the stage for this much-anticipated new phase in the journey for Neo:
1. Watch for the possibility of voting for consensus nodes: The architecture for the Neo Sidechain governance is under active design now. $GAS holder votes may play a role in helping to decide the Neo Sidechain Consensus Nodes. Watch for prospective opportunities to engage in this process as we shape the future of the sidechain.
2. Unleash Your creativity: Developers and innovators, we welcome your ideas. We hope you will use this newly accessible avenue to BUIDL to turn your visions into reality.
3. Name the future: We’re looking for a name for the new Neo Sidechain that reflects its transformative nature. We welcome your creative suggestions.
Watch for community incentives to foster each of these actions as we work toward the launch of the Neo Sidechain. Together with you, we look forward to ushering in a new era for Neo!
Founded in 2014, Neo is an open-source, community-driven blockchain platform designed to welcome developers into the Smart Economy. By enabling developers to digitize and automate the management of assets through smart contracts, Neo is built to realize the optimized digital world of the future. As the most developer-friendly blockchain, Neo meets developers where they are by integrating seamlessly with the world’s most widely used languages and tools, and providing the most feature-complete blockchain platform for building full-stack decentralized applications. With native support for powerful infrastructure including decentralized storage, oracles, and domain name service, Neo is the ideal foundation for developers to build the next generation Internet.
*This article has been updated as of Dec. 5th, 2023, to reflect the evolving nature of the Neo EVM project.