NEX (NEON Exchange) or one more piece to the NEO ecosystem puzzle

At a first glance, it might seem like another attempt to make a new DEX (Decentralised EXchange, ED/IDEX etc) or the “killer” of regular exchanges. But it is far more than that, what we see as a “missing link” in a rapidly evolving NEO ecosystem, which soon will connect all elements together in what potentially could a be “the step” that sets us apart from “blockchainization” of different types of assets and building services around it. So let’s dive in and take a look at NEX.

The TEAM

If you’ve heard about NEO you probably know the largest open-source community City of Zion. These guys are behind a Neon wallet and most used Neo libs. Without further introductions:

The team might seem a bit too geeky, rather than business oriented, but it balanced by an all-star advisors:

In fact, the list of all-star advisors will only grow as the project develops and implements a truly ambitious plans.

Main functionality

It’s a DEX in a first place, but the main difference from others DEXs and protocols is Off-Chain Matching Engine. On-Chain matching is among of bottlenecks for regular DEX. All orders matching are going to be handled off-chain, in a trust and secure manner, which would allow making high-speed, high liquidity trading platform.

The final order between two parties will be recorded on a blockchain. There would be an JSON API for developers and partners. As well as the team does not deny of using on-chain protocols, such as 0x, Kyber or Loopring, to improve overall liquidity. There’s one partnership already planned, the Thor (Blockchain-Powered Gig Economy Solutions) is planning to utilise NEX in their infrastructure:

The main focus, as Fabio stated — is to make the platform as User-Friendly as possible. So that even your grandma could make a trade without knowing what is block height or transaction hash.

NEX the interesting part

Before we move on to the NEX role within future NEO ecosystem, let’s first recall that idea behind NEO wasn’t to make just a general-purpose blockchain, such as Ethereum. In short, the main goal of NEO — to be a core of new digital asset universe. One of a key part of it is NeoX, which is Cross-chain distributed transaction protocol. In practice, that means that any blockchain which supports NEO ABI could transfer assets to/from NEO. At this moment there are several that plan to support this: Elastos (operating system on a blockchain), Ontology(peer-to-peer trust network which is cross-chain, cross-system, cross-industry, cross-application, and cross-device), High Perfomance Blockchain.

Payment Service

NeoX is definitely the main part of a whole ecosystem, but the team doesn’t plan to stop only on cross-chain exchange with NEO compatibly blockchain. They plan to support multi-chain transfer (with Ethereum or Cardano for example), as well as fiat pairs.

To achieve this goal they plan to build a network of hubs/partners that would handle on-chain (someone send ETH to exchange) or off-chain (someone sends fiat transfer) events and produce corresponding NEP-5 assets by a help of smart-contracts. So, let’s say ETH will be locked on Ethereum and XETH (NEP-5 version) is going to be emitted on NEO, and vice versa. Same goes for fiat, having a liquidity pool a hub could potentially emit XUSD/XEUR etc. NEX team will start with NEO/GAS, since these are not NEP-5 and thus couldn’t be transferred by a smart-contract.

Decentralised Banking

To be honest, this is kinda of longterm vision, but worth mentioning. Having in mind how NEO tries to build a digital assets universe, it is not hard to imagine who’s going to play a role of your Digital Bank. Having a functionality: asset transfer/exchange, investments and basic payments, which is roughly speaking 99% percent of a bank functionality. Why would you go to tradition bank in that case?

NEX Token

Now let’s jump into advantages of an early investor and the role of NEP-5 NEX token. But before we go to the perks it is important to remember one thing about this token:

“NEX token — is a security, which gives a right to receive a share from company income. According to the Fabio they plan to fill all legal papers first in EU, later maybe with SEC”

In practice, that means the team will officially submit a listing only on exchange with a license to trade securities (there’s none at the moment). While it is not bad at all, but definitely will weed out all flippers.

NEX token staking and perks

As any exchange NEX is plan to take a fee. All NEX token holders are eligible to receive a share from generated fees. In order to apply tokens must be staked to a contract. The longer you stake the more % you get. The final formula is to be determined by the team. Interestingly you can choose in which asset you want to receive your share (NEO let’s say) or you could receive the share from each tradable pair, so if say NEO was exchanged for RPX, you will receive some RPX.

Summary

NEX is definitely a worthwhile project, needed within blockchain infrastructure and as one more step upon breaking the walls of mass adoption. Key points:

1. Easy to use and low entry threshold to attract a wide audience
2. Off-Chain Matching Engine и JSON API for a high-speed trading, liquidity and tech. partnership
3. Payment Service cross-chain and fiat based transactions
4. Decentralised Banking central hub for digital asset management

The team promise to open-source the toolkit so that anyone could build their “Coinbase”. We look forward to the beta release in March and new partnerships and wish the team good luck along this bumpy road of blockchain adoption.