In the past few years, NEO has witnessed tremendous growth in its tech infrastructure and ecosystem over the past few years. In 2019, NEO will take a step forward in the continuation of our vision of supporting large-scale commercial applications with blockchain technology.


NEO 3.0 is a robust blockchain implementation with high throughput, enhanced stability and security, an optimized smart contract system, and a feature-packed infrastructure set for diverse business application scenarios. NEO 3.0 will also focus on governance’s pivotal role in the long-term evolution of a blockchain as the common good collectively owned by stakeholders and more broadly the entire surrounding communities. The the process of implementing NEO 3.0 we will explore various governance mechanisms including liquid democracy, futarchy and so forth, in many cases treating the economic model as an integrated system with the governance mechanism, therefore they will be treated as an integrated system.

Delegated Byzantine Fault Tolerance (dBFT) is a consensus mechanism designed specifically for blockchains. A set of consensus nodes are selected through a voting process, and these consensus nodes jointly generate and validate blocks. As consensus nodes are required to come to a shared consensus on a new block before it is committed to the blockchain, dBFT provides single block finality, meaning the NEO blockchain cannot be forked and transactions are irreversible. Once a transaction is confirmed on the blockchain, it cannot be reversed or cancelled. For financial applications, the finality of a transaction is a necessity.


In dBFT 2.0, we added a recovery mechanism that greatly improved the stability of the consensus algorithm. In the rare occurrence of a network failure or a node failure, a quick recovery is expected.

NEO 3.0 will include a built-in oracle implementation, thanks to which smart contracts can read data from external resources on the Internet during execution. This feature is made possible by the design of dBFT 2.0, which allows consensus nodes to resolve any inconsistency in the external data. By allowing developers to access data from the Internet, NEO contracts will be able to serve an extended variety of use cases.

NEO 3.0 will include its own decentralized storage platform, called NeoFS. It is designed for data-intensive dApps, small and medium enterprises, and IoT companies. NeoFS can also be used as a Content Delivery Network. NeoFS will also be integrated with the NEO blockchain, allowing to store old block data off-ledger and minimize computational costs on storage nodes and validation nodes. This will mean a much greater scalability of NEO.


Those participants who provide storage space will be rewarded by data owners and participants via a smart contract. A special subset of the network map and storage policy rules for object placement, along with Rendezvous hashing for node selection will allow us to achieve fine control over object location and minimal data movement in case of storage node failures.

NeoID is a decentralized identity protocol built on NEO. It empowers users and organizations to have better control of their identities and delivers a higher degree of trust and security to the smart economy.


NeoID consists of three main parts:


█ Trust Model – describes the rules of trust in this distributed network.
█ Privacy Model – describes the privacy protection scheme for users’ online data.
█ Game Model – describes the benefits and penalties of actions within the trust network.


These three parts provide a mathematical model to abstract the real world, forming the basis of NeoID.

Pricing Models


Currently, the relatively high cost of deploying and running smart contracts on NEO leads to a reluctance in smart contract usage and development. In NEO 3.0, we will address this issue by significantly reducing the deployment and execution costs of smart contracts. Prior to the NEO 3.0 implementation, credible projects can apply for grants from the NEO Foundation with contract deployment costs.




Simplified Architecture


In NEO 3.0, all assets are created in smart contracts, including neo and gas. It will become possible to unify all transaction types. Transactions dealing with complex application scenarios will be removed and replaced with interop services in smart contracts. As a result, there is only a need for a single transaction type in NEO 3.0, which is used to execute smart contracts. We have also proposed a simplified validation model that will greatly improve the speed of transaction verification, and allow these validations to be performed concurrently.

NeoVM


NeoVM is a lightweight virtual machine for executing smart contracts. It features fast startup, low resource consumption, and supports multiple high-level programming languages to allow developers to build contracts with familiar tools. In NEO 3.0, NeoVM will be completely decoupled from the blockchain and become a pure virtual machine. The benefits include easy implementation of native contracts, smooth integration of NeoVM into any IDE and easy debugging of smart contracts without loading blockchain data.




P2P Protocol


In NEO 3.0, the P2P protocol will be redesigned to include support for the UDP communications protocol and compression options. This is expected to greatly improve the TPS and stability of the network.

NEO 3.0’s roadmap includes some architectural improvements that will greatly improve NEO’s performance and stability. Some of these improvements are not compatible with NEO 2.x.


Therefore, NEO 3.0 will launch as a new blockchain network from a genesis block. However, before the launch of the NEO 3.0 MainNet, we will have two concurrent development branches for NEO 2.x and NEO 3.0.


The costs incurred during the migration process, such as contract redeployment and testing, will be reimbursed by the NEO Foundation. We will al provide comprehensive technical support for the migration of DApps.


Token holders will need to swap tokens to activate new ones on NEO 3.0. The swap procedure will be initiated on June 16, 2019.