Neon Exchange (NEX) Review – Neon Exchange ICO Ratings and Details

Ticker:
NEX

Token type:
NEO BLOCKCHAIN

ICO Token Price:
1 NEX = 1.00 USD

Fundraising Goal:
25,000,000 USD

Sold on pre-sale:
NO PRESALE

Total Tokens:
50,000,000

Available for Token Sale:
50%

 

What is Neon Exchange?

Neon Exchange, or NEX, is a decentralized exchange that is designed to combine the security of decentralized exchanges with the performance of centralized ones. As cryptocurrency has exploded in popularity so have decentralized exchanges because they cut out the intermediaries that put your money at risk. Unfortunately, the smart contracts that are used for decentralized exchanges are often too slow to perform high volume exchanges smoothly.

As a result, NEX is proposing a decentralized exchange that is paired with an off-chain matching engine. The matching engine will be tasked with handling order matching, which is the most expensive aspect of running an exchange. By performing the order matching through an off-chain engine, users will see an improvement in speed and an ability to perform complex orders that blockchains previously have not been able to execute.

The NEX roadmap begins in late 2017 with examples of the smart contracts being demoed. They plan to conduct the token sale and an open source platform launch within the first quarter of 2018, and a payment service launch in the second quarter. By the end of 2018 they expect to have a cross-chain launch and margin trading. There has yet to be a timeframe given for when the decentralized banking will occur.

How Does Neon Exchange Work?

As stated, the plan for Neon Exchange to give it an advantage over other decentralized exchanges is to use an off-chain matching engine. The matching engine will handle the order book along with order matching, and it uses deterministic algorithm to perform it. Additionally, it utilizes independent supervisor services that monitor the order matching in order to pick up on any suspicious behavior.

The trades from the off-chain matching are bundled together and then moved to an on-chain smart contract. The actual token exchange uses UTXO which requires that all global assets be converted into NEP-5 standard so they can be processed quickly. The smart contracts can exchange global assets at a 1:1 ratio by using the NEP-5 smart contract tokens, meanwhile users can deposit their global assets in order to conduct trades with an equivalent NEP-5 asset.

Features and Benefits of Neon Exchange

The ICO does not go into much detail through its site regarding the benefits that its platform can provide, but they do highlight some of their anticipated strengths. One such strength is the ability of the exchange to handle high volumes of trade because of its use of a verifiable off-chain matching engine.

Its unique payment service also makes it possible for third-party smart contracts to send and receive global assets within their computation. The level of complexity within trades that can be handled by NEX are often not available through other decentralized exchanges, using market and limit orders as examples.

For security purposes and to ensure that third-parties are not able to commit fraudulent trades, the trade method of the smart contact will only accept orders that are signed using a private key held within the matching systems.

The Neon Exchange Token Sale

The public token sale for Neon Exchange is scheduled to being on April 1st, 2018 with an end date to be announced later. At this time there is no presale scheduled to occur. There are no geographic limitations to participating within the sale. In total, 50,000,000 tokens will be created and half of them will be made available as part of the sale. The tokens will be referred to as NEX and will be on the NEO Blockchain.

$25 million is the fundraising goal for the token sale, and 1 NEX is equivalent to $1.00. The sale will accept NEO and GAS. The whitelist registration for the sale is set to occur between March 10th a d March 31st. No minimum or maximum contributions have been set.

The allocation of tokens is explained through a graph on the website, though there is no information provided regarding the intended use of the money raised during the token sale. As mentioned, 50% of the tokens will go to the public ICO, 20% will go to the founding partners, 15% to the NEO council, 10% to partnerships, 4% into a company fund, and the list 1% to ESOP.

Who’s Behind Neon Exchange?

There are five co-founders of Neon Exchange, each of which also holds a developer position within the company. Fabio C. Canesin is a co-founder who also co-founded City of Zion and worked as a research engineer with Schlumberger. Fabian Wahle also founded Altoida AG and holds a PhD. Ethan Fast also holds a PhD – from Stanford – and was one of the co-founders of City of Zion.

The fourth co-founder, Luciano Engel, also helped to co-found City of Zion and has worked as a mechanical engineer after being educated at The Federal University of Santa Catarina. The final co-founder is Thomas Saunders who works as a Lead Software Developer for the Institute or Design Innovation and has a BA in Philosophy of Language from the University of Minnesota.

In total the team consists of twelve people – mostly designers and developers – and links to their LinkedIn pages are provided. Strangely, there is no mention of an advisory board for the company and only two advisors are identified, which may be of some concern to potential investors who are worried about the experience level of the team.

Conclusion

As the whitepaper for the ICO accurately points out in its opening, the market for cryptocurrency has exploded over the past couple of years and exchanges are still struggling to accommodate trading. The move to decentralized exchanges has made this sort of trading more possible but the performance of those exchanges has often been less than ideal. The idea of combining a decentralized exchange with an off-chain matching engine certainly has some appeal and may be the next step in making cryptocurrency exchanging more accessible and palatable.

There are some concerns we have regarding Neon Exchange however. First is that there are only two advisors mentioned as being part of the team, and most of the rest of the team hold positions with City of Zion, which may complicate their ability to dedicate the appropriate amount of time to the platform. Additionally, there is not much information provided through the platform website regarding the functionality of the platform or the upcoming token sale. Most concerning is the lack of information about how they plan to utilize the funds they are raising.

There is also a lot of competition within this area, but it also seems to have generated a lot of interest which is promising for its future.

Peter Lehmann

Peter is a blockchain investor and cryptocurrency writer at Vkool.com. Since 2014 Peter has advised blockchain startups and ICOs on content marketing, strategy and business development.

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