Pros and Cons Unwrapped: NEO to GAS Swapping
In 2023, the crypto community has mainly focused on Ethereum, layer 2 solutions, and its competitors. However, one blockchain project that has lost a bit of the attention of the public in NEO.
This smart contract platform has continuously provided huge upgrades to its ecosystem and can still directly compete with Ethereum. In this article, we explore the NEO blockchain and its two native assets — NEO and GAS. We will provide you with the basics of both tokens and the benefits and drawbacks of swapping NEO to GAS.
This should give you a good idea of whether you should use a NEO to GAS calculator and start exchanging these assets.
Exploring NEO
The NEO blockchain launched in 2016, not long after the advent of Ethereum and its revolutionary smart contracts. In this regard, NEO became one of the biggest competitors to Ethereum, as it provided similar functionalities.
At the time, NEO had an edge over Ethereum when considering the power consumption of the networks. Ethereum’s PoW didn’t scale very well, whereas NEO’s dBFT (delegated Byzantine Fault Tolerance) allowed for cheap and energy-efficient transactions. This allowed the NEO network to surge among the most used smart contract platforms in that period.
However, the new wave of hyper-scalable chains like Solana and Avalanche have put a shade over NEO. When comparing CRO vs ATOM vs NEO, investors should consider various aspects, including technological advancements, adoption rates, partnerships, etc.
The blockchain uses a double token standard where NEO is the main asset on the chain and GAS serves to pay for the transaction fees on the network. As such, NEO remains the main investment asset for users who want to participate in upholding network security.
What Is GAS?
GAS is the secondary token of the NEO blockchain. NEO holders can generate GAS in their wallets just by holding the primary asset of the project.
The main use case for GAS (as its name suggests) is to pay for the transaction fees on the NEO network. This includes asset transfers and smart contract interactions.
Swapping NEO to GAS: Advantages
Let’s take a look at the benefits of swapping NEO to GAS.
Increased GAS Generation
Users can generate GAS just by holding NEO in their wallet. More precisely, the protocol mints 5 GAS per block and distributes it proportionally to each NEO holder.
Swapping NEO to GAS would allow developers to access a larger amount of gas tokens to pay for contract deployment, for instance.
Ecosystem Benefits
Holding GAS tokens is crucial when trying to interact with the NEO ecosystem of dApps. Developers need GAS tokens to be able to deploy smart contracts, whereas users need them to interact in the DeFi ecosystem on NEO.
The NEO token, on the other hand, has only yield-generation and speculative use cases.
Swapping NEO to GAS: Disadvantages
With that in mind, there are some drawbacks to exchanging NEO for GAS.
Potential Loss of NEO Dividends
NEO holders receive GAS tokens with each block. Consequently, NEO acts as a liquid staking token, where you get yields without having to lock it in. It’s an incredibly powerful narrative that users who swap to GAS will miss out on.
Moreover, NEO holders can participate in governance, which yields even more GAS upon distribution.
Market Volatility
Compared to NEO, GAS has a much more erratic and volatile price action. This means that investors looking for steady yields and safer assets should conserve their NEO holdings instead.
Swapping NEO to GAS: Is It Worth It?
If you are planning to participate in the NEO blockchain, you will need to hold both NEO and GAS. Depending on the usage you are planning, swapping NEO for GAs can bring several benefits, such as instant access to gas and a more volatile crypto for speculation.
On the other hand, if you want to remain long-term in the ecosystem, holding NEO, participating in governance, and generating GAS is the best choice.
