NEO & GAS: Simply Explained: How It Works
At one point, platform coins were seen as extremely valuable, but the NEO network has failed to sustain the high asset prices of the past.
was considered “the Chinese Ethereum.” However, its market price has sunk to extremely low levels, even lower than the depressed position of Ethereum (ETH) itself.
NEO is under threat of falling below $17 in the latest market downturn, which would effectively wipe out all gains since August 2017. The asset peaked at $196.85 on January 10 as the first days of that month coincided with an apex for the entire crypto market. But there are reasons specific to NEO that may be causing the slide.
Initially, everyone thought the Chinese government would condone NEO, but the most recent crackdown has led to widespread de-platforming of crypto projects. Beijing has taken down news channels on WeChat, and anti-fraud measures continue to depress initial coin offerings (ICOs).
Neo And Gas Price
The renewed Chinese crackdown comes as no surprise, and the markets have absorbed such news before. But coupled with a bear market, the offensive against new projects and the increased scrutiny may continue to hurt NEO. Loss of trust in the project’s future and even its capabilities to work as an ICO platform in such a bleak regulatory climate are factors affecting the market price.
The NEO network has numerous nodes around the world, but network consensus is achieved through a handful of special Bookkeepers. The latest data show there are seven Bookkeeper nodes, with plans to add more in the future. This number is seen as sufficient for achieving consensus, but being so small, it may facilitate censorship of NEO.
NEO was meant to resemble Ethereum in that it would be required to make projects run. But the network actually uses the GAS asset to move tokens, so there is no direct demand for NEO. Additionally, ICOs still prefer to collect Ethereum, Bitcoin, and, lately, cash in US dollars or even euros. NEO is simply not as popular for fund-raising.
The additional trouble is that there are not enough airdrops. Barring the high-profile airdrops of Ontology (ONT) and RedPulse (PHX), as well as a handful of other projects, NEO has not enjoyed much popularity on that front. A few airdrops created extreme hype and demand for NEO, but the mood changed later, and a simple airdrop does not inspire more buying.
NEO used to be supported by the Asian markets, but the asset’s profile changed over time. Now, it is concentrated on Binance and Bitfinex, two exchanges with a large share of USDT trading. NEO has turned into a speculative asset with dollar-like positions. Since USDT is unchanging in terms of price, NEO could be sold for a fixed-price crypto asset to preserve gains temporarily.
https://twitter.com/Crypto_Zephyr/status/1029604143730778112
The underperformance of NEO has brought back memories of the time before the rebranding, when AntShares failed to inspire investments and hovered at much lower prices. NEO is now among the biggest losers, down more than 90% from peak prices.
Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses made as a result of this information. Cryptocurrency trading and investing are risky propositions, and market participants are advised to always conduct thorough research.
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