Neo X Beta TestNet Unveils Interoperability and Governance Advancements

Neo has released the Neo X Beta TestNet, introducing multi-node governance and an upgraded bridge connecting Neo N3 and Neo X. Unlike Neo N3's dual token model, Neo X utilizes GAS as both a utility and governance token. The bridge now supports both deposits and withdrawals of GAS and features security enhancements, role management, and preparations for ERC-20 and NEP-17 asset support.

Neo X Beta TestNet: Interoperability and Governance Enhancements

Neo has unveiled the Neo X Beta TestNet, marking a significant milestone in the blockchain's evolution towards its MainNet launch. This latest iteration introduces groundbreaking governance capabilities and an enhanced, bi-directional bridge between Neo N3 and Neo X.

Interoperability and GAS Utility

The Neo X Beta TestNet boasts significant advancements in interoperability and governance, redefining the utility of GAS, the network's native asset. Unlike Neo N3's dual token model, Neo X consolidates GAS as both the governance and utility token.

GAS will continue to be generated solely on the Neo N3 network as a reward for validators and NEO holders/voters. To utilize GAS on Neo X, bridging from Neo N3 is necessary. A dedicated native bridge has been developed to facilitate this process, now enhanced with a range of new functionalities.

Bridge Enhancements

The upgraded bridge incorporates numerous security and user experience improvements. The original version allowed for one-way transfer of TestNet GAS from N3 to Neo X. With this update, both deposits and withdrawals of GAS are supported.

As before, the TestNet bridge operates seamlessly with NeoLine and MetaMask wallets. Bridging incurs a fixed fee of 0.1 GAS in either direction.

A robust role management system has been implemented, empowering a designated "Security Guard" to pause bridge operations and a "Governor" to propose updates and resume functionality, ensuring a smooth upgrade process. Preparations are also underway to support other ERC-20 or NEP-17 assets, including NEO.

Governance on Neo X

Analogous to Neo N3, Neo X employs the delegated Byzantine Fault Tolerance (dBFT) consensus mechanism, enabling elected nodes to collaboratively adjust protocol-level parameters. The Beta TestNet debut marks the first opportunity for entities to register their candidacy for election, earning GAS rewards in the process.

Candidate Registration and Voting

Neo X consensus node candidates must meet stringent hardware specifications, guaranteeing optimal performance, maintenance, and robustness. Candidates are expected to represent established entities or institutions active within the blockchain ecosystem.

Candidate registration entails a deposit of 1,000 GAS. Unlike Neo N3, however, this sum remains a deposit rather than being burned. The tokens are staked, with an exit process to reclaim them. The lockup period is tentatively set as two weeks, approximating two epochs (120,960 blocks).

One epoch represents an election cycle, culminating in the selection of seven consensus nodes by voters. All GAS holders are eligible to vote for candidates by staking GAS. The staked GAS amount determines the vote power and potential rewards for the participating address.

Incentive Mechanism

Since GAS is not produced on Neo X, election rewards originate from transaction fees accrued during each election epoch. These fees are distributed equally among the seven nodes validating blocks for that epoch.

Each consensus node may determine its distribution ratio, specifying the percentage of rewards shared with its voters. This ratio cannot be altered without the node exiting the process. For instance, a consensus node with a 50% distribution rate retains half of the 1/7 share of epoch transaction fees, distributing the remaining half among its voters. The individual voter's share is proportional to their relative vote contribution.

Penalty System

A penalty system is being developed to deter malicious or negligent consensus node operation. Potential penalties include temporary or permanent blacklisting from the consensus process, as well as the forfeiture of candidate deposits. Examples of malicious actions encompass failing to produce valid blocks or neglecting anti-MEV decryption key distribution.

Standby Consensus Nodes

Seven standby consensus nodes will initially safeguard network operations during the beta phase. However, these will be substituted with qualified candidate nodes once the requisite number of nodes is available and the staked GAS for voting exceeds 3 million units. This phased approach will facilitate thorough testing of fully decentralized governance before Neo X's eventual MainNet launch.

Additional Information

For more details regarding the Neo X Beta TestNet launch, please refer to the official announcement:

https://medium.com/neo-smart-economy/neo-launches-the-neo-x-beta-testnet-0b861b3dd366

Tags: GAS, NEO, NeoX