NEX ICO Review – Hybrid NEO Decentralized Exchange - Crush Crypto

NEX ICO Review – Hybrid NEO Decentralized Exchange

Summary

  • Project name: Neon Exchange (NEX)
  • Token symbol: NEX
  • Website: https://neonexchange.org/
  • White paper: https://neonexchange.org/pdfs/whitepaper_v1.1.pdf
  • Hard cap: $25 million (ICO Participants receive 50% of total token supply)
  • Conversion rate: 1 NEX = $1
  • Maximum market cap at ICO on a fully diluted basis: $50 million
  • Bonus structure: None
  • Presale or white list: Whitelisting will be done through a lottery system
  • Blockchain platform: NEO's NEP5 token
  • Countries excluded: TBA
  • Timeline: March 12, 2018: NEX opens registration for token sale lottery. March 30, 2018: Registration closes. March 31, 2018: Winners announced. April 7, 2018: KYC closes for the winners of the first lottery. April 8, 2018: Second round lottery winners announced. April 2018: Token Sale (Exact dates TBA - Please Refer to NEX’s website for the most up to date information)
  • Token distribution date: TBA
Video summary (video is 7:40 long):

Project Overview

What does the company/project do?

Being one of the first decentralized exchange supporting NEO’s NEP5 tokens, Neon Exchange hopes to bring high trading volume and advanced features to the decentralized exchange space so users can take advantage of both the convenience of centralized exchanges with the security of decentralized exchanges.

NEX is going to use “off-chain relay” which, instead of executing trades directly on the blockchain, potentially clogging up the network, uses side-chain smart contracts to match orders, and then they are fulfilled on-chain.

In addition, NEX will be using an automatic matching engine (which is semi-centralized) to reduce arbitrage opportunities and to allow for more complex trade orders.

Because of the centralized components, NEX will also host a public record of all trades and orders so that the public can verify transactions, and, if they find out any incorrect behavior with the matching engine, they can claim a compensation award.

To further enhance security while granting ease of access, NEX will have users store their private keys client-side (in a web browser via extension). This will allow users to login and interact with the NEX platform without uploading their private keys. The UI will be similar to MetaMask, but will include the following features:

  • Convenient NEO token listings, and transaction capabilities.
  • Transaction history directly on wallet.
  • Editable contact details.
  • Easy linking to other dApps for purchasing/interacting directly.

The fee structure will divided into maker/taker fees, with makers (users who put the trade order up) having a 0% fee to encourage liquidity, and takers (users who take up the order) having a 0.13-0.25% fee depending on the trading volume they generate.

Another component of the NEX ecosystem will be its Payment Service, which will be a pool of NEO and a NEO equivalent (XNEO), which can more smoothly interact with smart contracts. This will serve to further reduce friction when sending NEO because one can easily convert between the two equivalent currencies before and after transactions complete.

The image below shows some of the features of the platform:

NEX screenshot
How advanced is the project?

The team has announced its partnership with Red Pulse, who they plan on collaborating with to define standards and APIs for NEX’s Payment Service solutions.

This is the published roadmap so far:

Q1 2018 - Release of open source platform for token sales on NEO.

Q2 2018 - Payment service launch on MainNet for both NEO and GAS. Matching engine launched on testnet. Smart wallet and API launch on MainNet.

Q3 2018 - Trading interface and matching engine launch on MainNet. Cross-Chain demo for NEO and ETH on TestNet.

Q4 2018 - Launch cross-chain trading to support trading ETH and ERC20 tokens. Support for margin trading launches.

2019+ - Launch decentralized banking services, which mirror present day banking services, security, etc, but will be primarily done through the use of smart contracts with the logic of those services built in.

What are the tokens used for and how can token value appreciate?

The NEX token does not have a specific use, but will entitle its holders to a share of the fees generated by the NEX exchange. To do this, users will have to stake the tokens in a NEX wallet, and they will automatically get payouts (similar to GAS claim calculations on the NEO network).

The fees received will be a direct cut of fees across each token on the exchange. For example, if Neon Exchange is trading NEO, GAS, NEX, and RPX, the user would receive a share of each of these assets.

The token will appreciate in value if the NEX platform grows and generate more trading volume. As the platform grows, there will be more fees generated, and thus more payout, making the token inherently more valuable.

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Team

There are 10 listed members on the NEX team, and the following are those core members:

Fabio C. Canesin, Co-founder and Developer - Has a combined 12 years’ experience in research and analytics with the most recent experience currently being a research engineer with Schlumberger and co-founder of City of Zion.

Fabian Wahle, Co-founder and Developer - Has a combined 8 years’ experience in research and development with the most current experience being the founder of Altoida AG, an Alzheimer's research group.

Ethan Fast, Co-founder and Developer - Over 10 years’ cumulative experience in research with the last 5 years being dedicated to his Ph.D, and recently as a co-founder of City of Zion.

Luciano Engel, Co-founder and Developer - Over 8 years’ experience in engineering and analytics, with the most recent being with SIGMA, and as a co-founder of City of Zion.

Thomas Saunders, Co-founder and Developer - Over 11 years’ experience in software development with the most recent being as Lead Software Development at iDi, and co-founding City of Zion.

NEX also has 2 listed advisors: Da Hongfei and Erik Zhang, who are the CEO and CTO, respectively, of Onchain, and both are on the NEO Council.


Opportunities

  • Being the only decentralized exchange listing NEP5 token and with the support of NEO Council, Neon Exchange is going to have a dominating market share specializing in NEO projects. This is especially valuable since only a handful of exchanges list NEO-based NEP5 tokens.
  • The team’s technical capabilities is demonstrated by being cofounders of City of Zion, the open-source global NEO developer community.
  • The platform doesn’t require NEX tokens to function, so the introduction of NEX tokens would not create a barrier of entry to use the exchange.

Concerns

  • Even though decentralized exchange is a new space, there are already many projects working on the same area. As NEX eventually expands to include Ethereum-based tokens, it would compete with all other decentralized exchanges which will most likely generate a significant amount of trading volume by then.
  • Because NEX token holders share the fees generated by the exchange, the token is most likely a security token which makes it difficult to be listed on other exchanges.

Conclusion

 Our thoughts of the tokens for short term and long term are as follows:

For short-term holding: A

The project is highly anticipated by the market and rightfully so – a decentralized exchange supporting NEP5 tokens is badly needed. With NEX, all the new NEP5 tokens can be listed quickly to generate liquidity.

With the reasonable token metric and credential of the team and advisors, we believe there will be significant unmet demand during the crowdsale.

For long-term holding: A

Decentralize exchange tokens generally enjoy a rich valuation (0x at $534 million and Kyber at $266 million). With the backing of the NEO Council, we believe Neon Exchange has a good chance to succeed.

If NEX is able to become successful outside of NEP5 tokens, then great; if not, it should still provide substantial upside by dominating the NEP5 token market.


For more information about the ICO, please visit the following links:

* The information contained in this article is for education purpose only and not financial advice. Do your own research before making any investment decisions.

This article is contributed by Victor Lai with the help of our intern John Coburn.

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