Story Behind Neo
Vadim：My first question for today is about how did you start Neo? What’s the story behind it?
Da：I started Neo in 2014. Around that time, Bitcoin had come to existence for few years. And I personally heard Bitcoin in 2011. So that’s three years after I learned what Bitcoin is and how it works. Around 2013, it was also the time that the Chinese Bitcoin community came to exist. So I started to organize some Meetups, some conference together with several other guys.
And in 2012, when I was browsing the forum called bitcointalk.org, I discovered there was a post about crowdfunding to build Asic Mining Machine. It was started by a guy named, the ID is “friedcat”. It was a very successful event. He got funded for several hundred, I don’t know the exact number, but equivalent to maybe around a million dollars.
And then he successfully built the first Asic Mining Machine. So we were inspired by that event. And around that time, Vitalik was also planning to launch the Ethereum platform for smart contract. So all of these inspired us to build a new smart contract platform to do the crowdfunding. That is the pre-history of Neo, Antshares.
Vadim：Alright. So Neo is your first company in blockchain? Or you did something before that?
Da：Neo is actually the first project we did. But we also did a side project called weangel. It’s a website that we believe in the future, will utilize the Neo blockchain to do the crowdfunding. So we built the frontend website first. It’s called weangel.com. And then at the same time, we are thinking about how to do the architecture, how to do all the protocol stuff. We need some time to think through about it.
Blockchain and China Ecosystem
Vadim：Right, so what are the most challenging things you’ve come across to starting the Blockchain project? And what is the most exciting thing that come along with it?
Da：At very early days, the most challenging thing was to get top talents to work with you. At the very beginning, we only had four people in a tiny office. And the office, the rent was basically free. I was not paid for three or four years. So it’s all about passion, all about the things that you want to do. But it will be difficult to hire or to convince someone with good coding ability to work with you. Because their opportunity costs are very high. They can easily get a high paid job at bigger companies. So I took that as the most challenging factor in the early days.
And nowadays, I think the biggest challenge in China is to how to navigate between compliance and permissions, censorship resistant, public blockchains. So it’s a tricky balance that you need to find.
So I do love these stories, you know, when a person especially who is in our industries starting with something just very small, at first that person just had just 4 team members. But seeing how fast they grow, It was very exciting for me. It is really great, you know, how companies can grow fast and big. And I still do believe that we are in the earliest stage of our industry.
Vadim：So, you also mentioned in compliance. How do you see this direction in China and other countries? So what’s the most challenging part for you? As the founder of one of the biggest blockchains in our industry.
Da：I think, to be compliant is the absolute trend that we are experiencing. For blockchain technology to be adopted by the mainstream society, these applications have to be compliant. We are seeing many jurisdictions issuing licenses to different type of business. For example, I am involved with a company called Onchain Custodian, which is based in Singapore. And Onchain Custodian applied for a Payment Service Act license to do the custody of digital assets, like Bitcoin or ETH.
And the whole crypto market is still relatively small. The overall crypto market cap, I believe is somewhere between one to two trillion these days. Comparing it to the mainstream financial market, it’s really much smaller. So well if you want mainstream adoption, we need to be compliant. We need to build a safe and compliant bridge to introduce capital, to introduce talents to this industry.
About Neo N3
Vadim：And compared with the Neo Legacy, are there other optimization and improvements of Neo N3? How does Neo N3 want to break these borders between digital and physical world in the technology, in the use of new application? What do you think?
Da：There are many new features in N3. So the version number of the current new one is 2.x. And next version will be 3.2. So we decided to call the 2.x Neo the Legacy. Because it will be a wind down of maybe the next year or two. And the upcoming version is N3. And we will launch the main net of N3 in August.So it’s very soon. With N3, there will be new functionalities. We will have some basic modules like NeoID,which is a decentralized identity system,and also Oracle, a built-in Oracle. It enables any smart contract on Neo to have the ability to directly access traditional Internet. So you can visit a URL in smart contract. And the new protocol has the ability to give you authentic data feed from that URL.
It basically connects the next generation Internet, web3.0 to the current Internet the web2.0. So it’s like a bridge to connect these two things. And we also have a new functionality called NeoFS, which is built by a team in Russia. NeoFS basically is a new version of Neo’s equivalent to IPFS and Filecoin. But you use GAS, the utility token in Neo to pay for storage. And it’s built in with new protocol. So you don’t need to visit access to other protocols. So these are the new functionalities.
And we also have new economic model. We have new on-chain governance. For example, within Neo Legacy, you don’t need to do anything.You can earn GAS by simply holding NEO token, which is not optimistic, which is not the best way to do it. So the participation rate of governance in Neo Legacy is pretty low. So we decided to change it, we decided to give incentives to the voters. So from Neo N3, you have to vote for the correct community member. Only if you vote for the correct community member, you’ll get awarded. And there will be 21 council members. So these 21 council members will decide different parameters of the blockchain, of the protocol.
I do believe that competition between different blockchains and public chains is in fact, is more like a ecosystem competition rather than only technology competition.
Vadim：As I heard in addition to 100 million dollar Neo EcoFund, Neo also launched N3 Early Adoption Program recently, which announced that Neo is going to invest 10 million dollar equivalent money to funding several selected projects this year,in June, July, August, September,right? So can you tell me, elaborate a little bit more about this program and what’s your personal preferences? What kind of projects you want to bring to your ecosystem?
Da：The motivation behind the Early Adopter Program is brand new. We change a lot of things. It breaks the compatibility with Neo Legacy. So the developers, they have to rebuild their projects. And we need them. So we decided to give some incentive to them. And the projects that I’m mostly willing to see or to fund are those projects that can enable other projects to build on top of it. So they are more like the foundations of other projects. They are like the infrastructures of other projects. For example, if we want, because we want a thriving ecosystem of DeFi projects, we welcome Uniswap, which is a foundation for any DeFi project. We also want a Compound like lending and borrowing protocols. I think these two are the very essential components for DeFi. And we also welcome stable coin projects. There will be different trading pairs with stable coins. These are enabling building blocks of DeFi projects.
The Future of Neo and Its Potential
Vadim：Is it really a lack of true good developers and good projects at the market now or this is just another way to bring the most talented people to your public chain to your ecosystem. How do you see this in the next several years? So this let’s say money-driven motivation is the best choice? How to bring projects and developers or there should be something else there?
Da：Yeah definitely, money is not the only thing that the developers are looking for. But some incentive is a good starter, a good bootstrap for those projects. And once you have those fundamental building blocks, it will be easier to roll the snowball and it will become bigger and bigger. With Neo Legacy, we had some success, adopting this method. We believe we will also be successful with Neo N3.
Vadim：Maybe some potential founders of blockchain projects look at, you’re looking for more like a big project who already exist, who have big follower base or user base or you are looking for some more like, some new startups, new companies who can bring some new ideas and new solutions to your public chain, to your company?
Da：my preference will be the latter, new ideas, new technologies, new way of thinking.We currently are talking with a team in US. And they are planning to do a Oracle project, which is similar to Chainlink. But they will try to resolve several problems that are existed with Chainlink. And I think they have great potential. And we are talking with them how to work with them. Because to have a working Oracle, a working data fit you need to work with layer 1. So it will be more stable, more secure to provide data fit with their Oracle project. And Neo Foundation or Neo EcoFund will probably invest in their project. And I do like their project very much. They are a very small team, with strong academic background.
Vadim：So excellent developers have always been an important part of the ecosystem construction for sure. So what makes Neo N3 technically attractive to developers?And what kind of support does this program give to developers?
Da：Neo is the first public blockchain adopted BFT Style Consensus and we improved our BFT Consensus with Neo N3. And we will be able to process thousands of transactions per second and the cost will be much much lower than Ethereum. And also we have our completely original and new Neo smart contract system. Developers can use their familiar language like C#, Python or Go Language to write smart contracts. And we also have good integration with VS Code as ID tools.
Vadim：Right. In that way, I want to ask you next question, what milestones are Neo looking to achieve in the next several months, let’s say this year?
Da：The biggest milestone, or the biggest task we need to finish is to do the migration. Because basically, you can regard Neo Legacy and Neo N3 as two different blockchains. So we are trying to migrate from Legacy to N3. It’s basically moving all the assets, smart contracts on a blockchain A to blockchain B. So that’s a big challenge. And I believe Neo is the first one to do it in the blockchain industry. we figure out a way to do it by using Poly Network, a across-chain protocol. So Neo Legacy and N3 will be connected through Poly. And all the assets, we will do a migration of all the assets in the next few months. And also then, we will help developer at the same time, we will help developers to deploy, to modify and deploy the new projects on Neo N3. So the migration will be the biggest challenge and task that we are facing in the next few months.
And one of the biggest challenges among them is to talk to the exchanges. Because exchanges are really busy these days. So we need to talk to them, we need to convince them to do the migration with us together. I believe it will take a few months to finish all of these.
Vadim：So, since you’ve been in the blockchain for many many years, I think one of the first person especially from Chinese speaking regions here, So what would you foresee how the industry will lead to? So where are we going now?
Da：There are a few directions that are very intriguing. From the technological standpoint, layer 2 is definitely a way to go, to solve the scalability issues. And we will see many layer 2 solutions in the broader sense,including sidechains like Polygon. So that’s one of the directions that the industry is going to.
And from business perspective, DeFi is definitely the most anticipated directions that everybody is building stuff around it. We saw CompoundLabs announced a 4% deposit. And I anticipate many new finance innovations comes out from DeFi sector. And Metaverse and NFT are also very interesting. But it will take a few years to be mature. It is very interesting. Regarding to these directions and these sectors of our industry, as NFT, as DeFi, we see a huge growth these sectors during this bull run.
Vadim：And many people are saying that we are already sort of in the middle of massive adoption, something like that. How do you feel? Do we close to the massive adoption or we still have a lot of things to bring a real amount of user cases, real people to use blockchain on daily life?
Da：I’m not very familiar with the US market.I believe there are Coinbase compliant crypto exchange in US market. And I don’t know whether it is easy to open an account with Coinbase if you are US citizen and how many active users they have. But I can definitely say in China, in Asia, in Asia-Pacific region, it’s definitely not massively adopted yet. Very few people ever tried DeFi projects. So I think we have a long way to go. It will be an exciting journey for us, for the blockchain entrepreneurs to explore what we can do.
Vadim：Right. Let’s talk a little bit about the current market.I think, since the last time we had a talk, you made quite exact predictions actually. If I’m correct, you told me that you’re sort of, you know, pessimistic and you predict Bitcoin to be forty thousand or something like that, which is more than you predict, but right now we are in sort of this range, your previous idea.So how do you see situation in the market now?July 2021, what do you see in the moment? So should we expect another bull run this year or we are already on the bear market, and we don’t need to expect any new growth?Or if you don’t mind I can ask in that way, or cryptocurrency market won’t have the same bull and bear cycles as the one before,and we are going to experience something absolutely new?
Da：My theory behind my prediction regarding price is that if something goes up too quickly and people become rich too quickly,there will be some corrections.And I truly believe Bitcoin is a better store of value than gold.And I truly believe that one day the market cap of Bitcoin will surpass gold, which is around ten trillion at this moment.But I don’t know in which year it will surpass, but I do know it takes time.If the Bitcoin somehow in two years or in one year surpass the overall market cap of gold, I would say that it’s too easy for those Bitcoin holders to make such a big fortune.And you can say in some sense, it’s not fair. It’s not the way that the wealth of this society should be distributed to.Personally, I will prefer a longer run to appreciate the price,and a lot of change of hands of Bitcoins, so it will be more evenly distributed to the holders, to the believers, to the late-comers.
So from the personal preference and also from my theory, I think it will take time for Bitcoin to reach, let’s say a hundred thousand US dollars, and eventually surpass the gold market cap. Right, still about this year, I think many people, they sort of hesitate now. They don’t know what they should do. Should they just store the coins somewhere for the next bill run, or actively buy more till the bull run visits?I think it’s definitely a bear market. We have, the price had slumped fifty percent from the highest point. So I think it’s a bear market. I don’t know when another bull run will come. I don’t think it will be this year. We need some time to do the change of hands, to absorb this bear market.
Vadim：I do believe you were excited when you first time see the Bitcoin White Paper. And what would you say to Satoshi Nakamoto if you two were to meet?
Da：I would say the word,“Thank you for your invention. And it’s one of the most beautiful things that we saw in many decades,and it enables a new possibility for a new type of human society in the future.”That’s the first sentenceI would say.
And second will probably, if I can give some advice to Satoshi as a time traveler, I probably will say that, “Maybe you can change the title to Peer-to-peer Digital Gold, because it’s more like gold than cash.”It’s been a real pleasure talking to you today.