The price of NEO (NEO), a blockchain platform for smart contracts often referred to as the Ethereum of China, has struggled through the first half of the year, dropping from a peak of $180 in January to its current price of $26.93.
NEO now holds a $1.75 billion market cap, which is roughly 3% the value of Ethereum (ETH). While the entire market has continued to be unforgiving to investors and macro trends point downwards, NEO stands as an interesting investment to consider scaling into over the coming weeks.
With any cryptocurrency investment, it’s important to note that fundamentals outweigh technicals, especially if an investor aims to take a mid-to-long term stake. For NEO, the major upcoming value driver comes in the form of the much-anticipated version 3.0 platform update.
What’s Next for NEO?
Here’s a sneak peek unveiled by NEO Core Dev Erik Zhang. https://t.co/Ln5NHZzKcs
— NEO Smart Economy (@NEO_Blockchain) July 10, 2018
According to a recent announcement by NEO co-founder and core developer Erik Zhang, NEO 3.0 is designed to address key technical areas and boost the platform’s transactions per second (TPS), in an effort to address future scaling issues.
To achieve this technical upgrade, NEO plans on optimizing the network protocol, implementing a permission system for NeoContract, and prepping the system for dynamic sharding. These three alterations are ultimately designed to support larger-scale DApps on NEO.
NEO also recently partnered with CertiK, a blockchain and smart contract verification platform, to improve the security of smart contracts on the NEO blockchain. According to the announcement, CertiK will act as a security auditor and provide a tailored solution for the verification of digital assets and user identities on the NEO platform.
Interestingly, as part of NEO 3.0, the project aims to update the unit economics of both NEO and GAS. In their current state, NEO as a currency is indivisible and GAS cannot be divided when paying for system fees. To address this, NEO proposes the following with 3.0:
- A small increase in the supply of gas every year
- Reward consensus nodes
- Make NEO divisible
- Allow gas to use the decimal part when being used for system fees
However, there has been pushback on the idea from some investors, as detailed in a recent report by Coindesk. Essentially, investors are worried that a divisible NEO will ultimately result in downward price pressure. These concerns are compounded by the fact that NEO is relatively centralized given its organization structure, meaning investors really don’t have a say in this significant decision.
Nonetheless, the combination of its massive upside relative to Ethereum’s valuation and former all-time highs, in addition to its upcoming update designed to address key scaling issues, NEO stands as an interesting investment opportunity worthy of consideration.
Related: Here’s What We Know About NEO 3.0
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.