After the cryptic (pre?)announcement not too long ago, NEO has today officially announced NEO 3.0 which will bring significant upgrades to the NEO blockchain in almost all aspects.
NEO 3.0
NEO 3.0 has been in development since Q2 of 2018 and today through Erik Zhang, lead developer of NEO, we learn what it should entail. According to Zhang NEO 3.0 will feature higher tps and stability, expanded API's for smart contracts, an optimized economic & pricing model and more. In his own words "we will entirely redesign NEO's core modules".
Higher TPS
The technicals of most of this are beyond me, but to copy & paste from the announcement, NEO will increase transactions-per-second by:- Refactor the code and core modules
- Optimize the network protocol
- Implement the feature manifest and permission system for NeoContract
- Prepare for dynamic sharding
- Detach state persistence and block persistence
What this exactly entails, I'm not sure - though it sounds great - but I did notice the 'dynamic' part of dynamic sharding, which is a term I don't think I've come across before. We know about sharding, but the wording of this makes me wonder if dynamic sharding is perhaps some kind of different (better?) variety of the same technology.
Improving the tokenomics
This has to do with the divisibility-issue of NEO, where if the token appreciates in value too much it will quickly become out of reach for ordinary investors to own even 1 NEO. There is a current proposal to change the indivisibility of the NEO token in NEO 3.0, as well as introduce a yearly inflation of GAS and a mechanism for rewarding consensus nodes.
These are still only proposals though, and as I've written recently I have contributed to a new proposal with regards to the tokenomics, which would introduce a lock-down period. The proposal is currently on github and was looked at by Erik Zhang, and has been enthusiastically received on the NEO sub-reddit so far. I'd get a real kick out of it if this makes it into NEO 3.0!
Lowering the GAS cost for smart contracts
Another upgrade planned is to lower the cost for launching a smart contract on NEO. According to the announcement it will be significantly cheaper to do so in NEO 3.0.Smart Contract upgrades
Here again my technical knowledge is limited, but I do make out some interesting points. Firstly, NEO 3.0 will feature cross-platform smart contracts. From what I understand they will create a unified API for smart contracts to connect with the NEO blockchain. Together with a platform detection method, this should enable any blockchain to become compatible with NEO if they put in the work to connect with the API.
Khaleesi is still hodling NEO. Are you?
Another interesting thing is the feature manifest and permission system. I would need more details on this, but I believe this means that there will be methods of constraining smart contracts and limiting their functionality. Think of it similar to your Android phone apps, which request your permission to access any of your phone's features, and simply cannot use these features if they are not allowed to do so. Similarly, smart contracts could be limited to certain functions too. This could be very helpful in preventing hacks or other abuse - simply by taking these cards off the table.
NEO and GAS will soon be handled like NEP-5 tokens. This is something that would be very welcome! It's an issue with Ethereum and the ERC-20 standard too, the fact that ETH is not the same 'sort' of token as an ERC-20 token. This is why you can find Ethereum DEXes for ERC-20 tokens but they will make you 'wrap' the ETH first into W-ETH, because ETH itself is different. The same principle applies to NEO. Perhaps you've tried the NEO DEX Switcheo and you may have noticed a somewhat similar process happens there. With NEO 3.0 however, both NEO and GAS will have the same function as any other NEP-5 token and no more 'wrapping' should be required.
API & NeoVM changes
Sorry, this is where I must utterly fail you in explaining what will be improved. There are multiple improvements listed for the API and NeoVM, but you'd need a programmer to explain what these features do and why these improvements are improvements. I'm sure that some coder somewhere must be wetting his/her pants over the announced changes, though.
Who remembers this little guy?
All in all I'm excited about NEO 3.0, but also a bit uncertain. I like all of the proposed improvements a lot, but what concerns me are the words of Erik Zhang "we will entirely redesign NEO's core modules". It gives me an uneasy feeling when a project that has been running since 2015 and is well on it's way, is now deciding to do a complete overhaul. Surely, if it's for the better then it is a good thing but it also begs the question: What have you guys been doing all this time?
At the same time, when market leader Ethereum is also doing a complete overhaul with Casper's PoS protocol and other things, perhaps it is better to remain flexible rather than rigid. After all, these technologies are still very new and every roadblock in the road teaches us something new about what does and doesn't work. Right now regulations play a large role, also in technical development, and that wasn't so much the case before. In discussions on github and reddit you can find snippets here and there discussing governance tokens vs utility tokens, and often the regulatory aspect is not overlooked. After all, you can make the best technical decision but if that puts you at odds with regulars you're not getting very far either.