NEO Surges 15% After $100mln Funding Announcement
The founder of NEO has disclosed that a $100 mln funding is to be injected into the decentralized app (dApp) platform’s ecosystem. Da Hongfei made the disclosure on Tuesday May 14 while presenting at the ongoing annual gathering of the cryptocurrency and blockchain technology world, Consensus 2019 in New York.
According to him, the NEOEcoBoost funding will be used to activate seed projects, support dApps growth, further develop infrastructure and bolster institutional collaborations.
Da: We are exhilarated to unveil #NEOEcoBoost $100M funding into NEO's ecosystem! The goal is to activate seed proj, support dApps growth, further dvlp infrastructure & bolster institutional collab. NEOEcoBoost extends beyond funding to tech support, community synergy & promotion pic.twitter.com/G9P8xnpwVo
— NEO Smart Economy (@NEO_Blockchain) May 14, 2019
But he neither indicate the source of the funding nor link it to the 10 million tokens (10% total) earmarked according to the platform’s whitepaper “to motivate developers in the NEO ecosystem”. There have been insinuations even in the NEO community that it could be from selling remaining NEO. Others, for lack of clarity, assume that the liquidation of NEO has already happened. The NEO token price saw a 20% uptick immediately after the news.
But NEO is centralized
NEO, a dApp platform with a same-block transaction finality (i.e. no confirmations) and uses popular programming languages like Python for contracts. Despite its efforts at differentiation, it has been dubbed one of the most centralized networks especially among crypto projects with the top market cap. This is because the network still holds about half the supply (43%) of its native asset and the NEO Foundation runs five of the seven available nodes on the network amassing a large amount of voting power.
Its proponents maintain its centralized form is necessary since it uses a consensus mechanism called Delegated Byzantine Fault Tolerance (dBFT). The new dBFT protocol requires all nodes to come to a majority agreement on each new block before it is added to the blockchain. NEO supporters say consensus cannot be guaranteed on the network without its being centralized. That is, as a young network using finality in every block, being centralized is the only way to guarantee that nodes will reach consensus – at least at this take-off stage.
The progression towards being fully decentralized as the underlying blockchain technology demands is in progress though. It starts as nodes controlled by the Foundation are being handed over to third-party entities and new nodes are added to the network (to exceed seven). The NEO Foundation would also have to distribute more of its NEO tokens to the community for users’ to have more voting power.
Competitive blockchain space
NEO plans to integrate more functionalities later like the Layer 2 protocol for scaling and a decentralized identity and data storage services. It continues to work on projecting its smart economy agenda to position itself as the most useful blockchain for various purposes.
It will have to continue differentiate itself from others in the fast-growing landscape especially Ethereum. NEO maintains its code is different from Ethereum’s, it is written in a different programming language, uses a different consensus mechanism and a virtual machine. Other promising competing platforms with advanced decentralization mechanisms include Cardano, tangle-based IOTA and IOST which recently introduced OnBlock, which allows everyday users to interact with dApps on the IOST network using just their mobile number or email address.
In all, the funding is a great development for the overall growth of the NEO ecosystem as it will support NEO-based projects to take off.
As of press time, NEO is trading at $11.89, up nearly 15% on the day.