Neon Exchange (NEX) has become one of this year’s most talked about upcoming ICOs. NEX combines the high performance of a traditional centralized exchange with the trust and security of a decentralized exchange. Due to all the hype surrounding ICO investing, we focus on the facts and prefer to present arguments without any emotions. The team at BlockAlive analyzes ICOs against a number of criteria listed below. This post in particular summarizes and evaluates the NEX project.
What is NEX?
NEX is a cryptocurrency exchange built on the NEO platform. It will allow all sorts of NEO tokens to be exchanged directly from a wallet. Such a service will provide a secure way for you to exchange your coins and provides a fast and reliable environment for payments.
The official slogan from the NEX Whitepaper uses these words:
NEX is a platform for complex decentralized cryptographic trade and payment service creation.
Why do we need a decentralized exchange?
Decentralized exchanges (DEX) are becoming increasingly popular. Many traders and blockchain experts talk about the future of trading. Is the future of trading in decentralized exchanges?
Surely you have heard the term “decentralized ” used with everything. Privacy and security are one of the main concerns of investors and traders, so that is why decentralization has come straight to trading platforms. A good trading exchange must have a combination of performance, trust and security. Those three elements are the most important for any environment that collects or works with money.
How is NEX better than other decentralized exchanges?
Firstly, the NEX platform brings complex order types that aren’t currently available on other decentralized exchanges, such as limit orders, stop losses, margin trading, etc. We believe that more decentralized exchanges will develop similar features, but looking at the current market and development, no doubt NEX is a leader in this area.
Secondly, NEX can handle enormous trade volumes through its unique publicly verifiable off-chain matching engine. Scaling is a big issue across the cryptocurrency market, and NEX introduces a new way how to thrive. We haven’t seen the matching engine at work and we (team of BlockAlive) expect some problems. With every piece of new technology, there are some issues, but the NEX team seem to be able enough to solve potential problems.
Thirdly, the NEX payment service enables third-party smart contracts on NEO to send and receive global assets such as NEO and GAS as part of their computation. In a word: Imagine PayPal. You can pay for any good or service online via PayPal (if a merchant incorporates the PayPay payment method), right? NEX will provide such a service as PayPal today, but decentralized.
NEX ICO Overview
Neon Exchange (NEX) is a decentralized platform on the NEO blockchain. The technology is based on off-chain order matching, on-chain trade commitments and a token exchange layer.
The orders get matched off-chain and are then redistributed on-chain to the individual users. You don’t need to send your coins to a trading platform. This process is much safer than on traditionally centralized exchanges.the
Don’t forget, even though there are some reliable and secure trading platforms, everything can be hacked (centralized exchanges like Binance, Bitfinex, Bitstamp or Coinbase). If you don’t have the private key, you don’t own the coins.
All you need to know about the NEX ICO in 15 minutes
The team hasn’t published any introduction video, so all the video content on YouTube is made by crypto-enthusiasts and vloggers. If you prefer watching videos, here is a great summary of Neon Exchange (NEX) ICO in 15 minutes.
NEX plans to have the trading of NEO tokens operational in mid-2018. The first step is obviously to set up an environment for trading. Beyond enabling a decentralized exchange, NEX’s vision includes the creation of decentralized banking through a smart contract-based funds management service. NEX won’t be just a platform for trading, but moreover, it will provide a place for general secure asset management.
Q4 2017: Smart contract examples for payment service and decentralized exchange, demo of profit distribution mechanism on TestNet.
Q1 2018: NEX token sale and release of open source platform for token sales on NEO
Q2 2018: Payment service launch on MainNet for NEO and GAS. Also, matching engine launch on TestNet, supported by accompanying CLI. Smart wallet and API for integration with tethered tokens in MainNet.
Q3 2018: Trading interface and matching engine launch on MainNet: beginning of NEO, GAS, and NEX trading. Also, cross-chain demo on ETH and NEO TestNets.
Q4 2018: Cross-chain launch to support trading of ETH and ETH tokens. Also, support for margin trading on MainNet.
2019+: Decentralized banking: smart contract asset management across chains
The NEX ICO Team
It appears to be a strong team with a good mixture of experience and abilities. All co-founders are from City of Zeon (https://cityofzion.io/) which is an independent group of developers, designers and translators formed to support the NEO BlockChain core and ecosystem. The City of Zeon team has talented individuals and has a proven record of execution and existing working relationships with NEO core team.
Co-founders and developers:
Developers, designers and marketers:
- Evgeny Boxer (developer)
- David Schwartz (developer)
- Nathaniel Walpole (designer)
- Samuel J. Mansfield (designer)
- Carla F. de Paiva (marketing and PR)
The NEX ICO has two advisors, Da Hongfei and Erik Zhang, both of them are members of NEO Council.
Partnership with Red Pulse
There hasn’t been much information about partnerships. But recently NEX announced a partnership with Red Pulse at the beginning of February. Red Pulse is an event-driven research firm in Hong Kong covering market events impacting Chinese companies, sectors and the overall economy. Red Pulse (RPX) will be the first NEP-5 based decentralized application token using the NEX platform. NEX will develop solutions for payment services and will collaborate with Red Pulse on defining standards and APIs for the delivery of these services.
The whitepaper (available for download in PDF) is 12 pages long with two reference pages. It explains the current status of the cryptocurrency market and why it is needed to build a decentralized exchange. You will also find an answer to why they choose NEO instead of Ethereum (ETH) as the basic building block. This is a very non-technical piece, easy to read and understand.
The main part of the whitepaper is about the Neon Exchange and explains three major parts of the system:
- Off-chain Matching Engine
- Trusted Off-chain Matching
- Centralized User Accounts
We can read about the NEX initial fee structure for trading. There is a 0% maker fee and 0.13% – 0.25% taker fee. NEX exposes a public JSON API that third-party applications can use to trade tokens.
This part and the following part of the payment service is quite technical.
What we like about the NEX whitepaper is the attitude of the writers – it is a short and easy to read document intended for the majority of investors and enthusiasts. Some parts are technical and not so easy to understand, but since the project is about cutting-edge tech, it has to be a bit technical.
The Neo blockchain can handle many times more transactions than Ethereum. The‘Neo Eco-system’ will launch in the course of the year.
Similar cryptocurrencies (though not decentralized) such as Binance Coin or KuCoin Shares have succeeded and each one has a market cap of around a billion dollars. Decentralized exchange tokens have thus far enjoyed a generous valuation (e.g., 0x project at $534 million and Kyber network at $266 million). The Neon Exchange can reach beyond that.
Two ways how to make a profit from investing in NEX
This ICO is interesting for investors because they can make money in more than one way.
- Tokens gain value over time (this applies to tokens in general, so nothing new here)
- Regular income through their share of the generated fees (a new way)
What does it mean?
The NEX token will entitle its holders to a share of the fees generated by the NEX exchange. Based on the information from the NEX whitepaper, staking tokens in a NEX wallet for a longer period will result in more fees for the user to claim. It is similar to the GAS claim calculation on the NEO network.
Some investors speculate that buying NEX early could turn out as a smart investment because you can gain a profit not only from a token’s raising value but also get a regular income. We can expect that with more users using the Neon Exchange, more fees will be generated.
There are more ICOs (upcoming and ended as well) building a decentralized exchange, and one of the promising is Switcheo. Switcheo Exchange lets you trade any NEP-5 token with NEO and GAS immediately. Read more about it on Medium blog by Gamma Ra.
You can also have a look at a decentralized exchange like the Kyber network, Loopring or 0x project and compare their strengths and weaknesses.
It won’t be easy to list the NEX token on the all popular exchanges, because the token is most likely a security token (holders of the NEX token share the fees generated by the exchange).
NEX ICO Facts
- Project Name: Neon Exchange
- Token Symbol: NEX
- Crowdsale Hard Cap: $25 million
- Total Cap size: 50 million tokens
- Token Distribution: 50% to crowdsale (public sale)
- Price per Token: 1 NEX = 1 USD
- Presale Terms: No pre-sale
- Technology: NEO blockchain
- Token Release: TBA
There will be 50 million tokens created in total, and half of them will be available in the public sale.
Token sale information
There will be a public sale where investors have equal buying opportunities. There is no pre-sale of tokens.
The NEX token sale will occur in April and will require contributions through the NEX extension or the token sale feature in the NEON wallet.
March 12: NEX opens registration for the token sale lotteries.
How to participate in the NEX ICO
The NEX token sale begins in April 2018.
All users who want to contribute to the NEX token sale are required to go through a KYC process. KYC is an identity verification process that allows compliance with government and banking regulations.
There will be two rounds of token sale lotteries (on 12th March and 8th April). The first lottery will select up to 25k participants to contribute up to $1,000 each. If you want to participate in the NEX token sale, go to the official website and register for a lottery.
Make sure you follow NEX on twitter.
- Always pay attention to URLs and double-check spelling.
- KYC will be mandatory and enforced.
- The NEX team will never ask you to send contributions to a wallet address.
It will be possible to participate in the ICO through the NEON wallet. If you don’t own any NEO cryptocurrency, you can buy it on Binance exchange.
The Verdict on NEX ICO
This ICO is attracting a lot of buzz. It is one of the upcoming ICOs that it is worth keeping an eye on.
What we see in NEX is not the only groundbreaking tech that found a perfect niche within crypto, but we also see a strong and experienced team capable of delivering a much needed product in the crypto space. The roadmap seems good. With the backing of the NEO Council, the Neon Exchange has a very promising chance to succeed.
Disclaimer: The information provided here is for informational purposes only and should not be seen as investing advice. We are not a financial advisor. This is just our opinion. Always do your own research before investing. Investing in ICOs is extremely risky.