The many changes in the release of the new Neo N3 have an important role to play for GAS, and this article will explain some of the most important changes that have been made to GAS in addition to their increasing usefulness.
The unique feature of Neo is the dual symbol model where NEO acts as a governance and indivisible symbol, while GAS acts as a utility symbol for Neo's network and is divisible by the eighth decimal.
And the many changes in the release of the new Neo N3 have an important role to play for GAS, not only expanding the use cases of the token, but also in addition to the conditions that make it useful and more convenient.
In Neo Legacy, GAS is used as payment for network resources, smart contract deployment, and other services on the network. However, a host of issues such as GAS being a UTXO asset, an inflexible pricing structure for fees, and user access to free transactions mean that GAS has not really been used to its full potential.
While all of the GAS use cases found in Neo Legacy remain in N3, this article will explain the most important changes to GAS as well as their growing usefulness.
Supplying tokens
In Neo Legacy, GAS is gradually launched into the network for every block out of a total supply of 100 million, spread over a 22-year period through a decay rate algorithm. This means that less gas is produced per mass over time until 100 million are released.
And in N3, GAS no longer has an overall supply cap and is distributed with a fixed inflation rate of 5 gases per block, as the GAS that is spent on transaction fees is burned, and this differs from Neo Legacy, where system fees are collected and distributed to NEO holders.
In Neo Legacy the GAS was intended as a mode of transportation, but its model incentivizes savings in gas rather than spending. The problem of unused gases (i.e. lost addresses with NEO or NEO sent to copy address) is compounded by unclaimed gases that will never enter the network. But N3 will alleviate this problem with an unlimited supply of new gases that can exceed the rate of loss in forgotten wallets or copy addresses.
Since there is no limit to the amount of GAS generated, users will be incentivized to use the token as a means of transportation. In N3 the implementation of 10 free gases per contract has been removed, and GAS is required to pay the fees for each network and system.
Remove 10 free gases
On the Neo Legacy network, the first 10 GAS spent system fees are waived in the transaction, and system call fees vary depending on the function used.
Most of the fees are costly and include 5,000 GAS for global asset creation (or UTXO), 1,000 GAS for auditor registration, and between 100 to 1,000 GAS for contract creation, depending on the need to store the contract or vital protest. And these costs are permanently included in the NeoVM along with the Neo blockchain.
10 GAS support is designed to cover most of the smaller system fees, examples include system-to-blockchain calls ranging from 0.1 or 0.2 GAS, or OpCode instruction fees ranging from 0.001 to 0.02 GAS.
The 10 GAS waiver ensures that a user can send NEO, GAS, or NEP-5 assets onto the network at no cost unless they choose to pay for priority. It also encourages developers to write effective contracts, as keeping implementation costs below 10 GAS costs effectively means that users are able to use their applications for free.
GAS fee waiver is no longer present in N3, however, the pricing model is more diversified and responsive to user needs from the blockchain and ancillary services.
Using a separate virtual machine in N3, system fees could be adjusted by the new Neo Board elected by the token holders without affecting the state of the blockchain.
Change the pricing mechanism
Changes in pricing fees in the N3 make Neo much easier for developers.
At Neo Legacy, gas prices for smart contract deployment were a barrier to entry, and Neo hopes that lower gas costs in N3 may spur new project development.
The N3 also has a more comprehensive fee structure than its predecessor, and with most fees significantly reduced cost reductions are possible due to pricing scheme changes at the smart contract level.
Examples of price cuts from the Neo Legacy to the N3 include:
Smart contract deployment:
1000 GAS to 10 GAS
Runtime check witness :
0.2 GAS to 0.003 GAS
Storage.get:
0.1 GAS to 0.01 GAS
The N3 pricing model applies a new, customizable approach, and the new model relies on a basic implementation fee, defined as the execution time for the simplest operating symbol, NOP, expressed in GAS.
All other instruction fees are defined as a parameter that is applied to those basic fees depending on the relative execution time. These execution times are aggregated from a table derived using two different VM applications, in C # and Go, to provide fair estimates across different programs.
Also, one of the major advantages of the new design is that it is easy to adjust system fee rates if the market value of GAS changes.
Because each fee is defined as a parameter for one base fee, only the base fee needs to be adjusted, and a 10 base fee reduction will automatically extend that price across all other system fees. The basic fee adjustment can be done by the new board, providing a decentralized mechanism for the network to adapt to natural gas fluctuations and stay competitively priced.
Voting Incentive / Governance
NEO holders received GAS distributions just to keep NEO tokens in a private wallet. While this is still true for N3, NEO holders will need to take an active interest in the platform management process to receive the maximum amount of GAS available. Under the new model, NEO holders will elect a new board of 21 members who will be responsible for overseeing network upgrades, fees, and assigning infrastructure roles (for example, NeoFS internal loops, Oracle nodes, StateRoot auditors) and more.
Any individual, organization, or entity can apply for board membership directly on the blockchain, and a 1,000 GAS fee must be paid to register as a candidate from among the 21 board members, and the first seven who receive the most votes will be a consensus contract responsible for producing the blocks.
In Neo Legacy, 100% of the new GAS is distributed directly to token holders just to load NEO.
In N3, this will drop to 10% with 80% given to users who voted for a New Council member and the final 10% will be distributed to New Council members as a reward for their work.
NeoFS Payments
NeoFS Decentralized Distributed Object Storage System provides hardware providers the opportunity to rent unused volumes in exchange for GAS.
Potential use cases for NeoFS include users' private data storage, digital applications and content delivery networks, data exchange for small and medium-sized enterprises, unstructured IoT data, NFT content and metadata storage, and static document storage.
GAS payments are used in NeoFS for various network operations and examples include asset exchange, gas deposit and withdrawal, and maintenance of network gas account balances.
But after N3 TestNet was launched in March 2021, NeoFS was published and made available to all users.
Now that the TestNet version of NeoFS has been published on the Neo N3, Neo SPCC aims to launch a CDN based on N3 and NeoFS to attract the largest network participants such as data centers and ISPs, to provide storage capacity.
Oracles payments
N3 offers a blockchain native oracle network, Oracles enables smart contracts to obtain data from external sources, making it available for use by blockchain applications.
The original oracle network also supports general applications and widespread uses such as making calls to URLs and accessing NeoFS Distributed Storage.
Each Oracle request carries a fee of 0.5 GAS and each verification 0.01 GAS, and like other price changes in N3, these fees can be adjusted through future governance processes.
GAS as the original contract asset
Finally, GAS (and NEO) exist in N3 as original contracts and no longer use the Unspent Transactions Output Model (UTXO). It allows the token to be used more easily by smart contracts and digital applications.
UTXO on Neo Legacy made it extremely difficult to use NEO or GAS in smart contracts, so different wrapped versions of NEO and GAS on Neo Legacy were created to solve this problem.
Examples include Flamingo financing with nNEO, Alchemint using sNEO and other gas-to-cGAS operations, however the experience is not ideal as users will need to switch the asset back and forth according to their needs.
Ultimately, this prevented GAS from being widely adopted as a token for in-dApps payments, in the way one might see ETH being used on Ethereum.
But now N3 features the contract-based algorithm for NEO and GAS that is currently used by NEP-5 tokens, and the creation of all Neo N3 assets using smart contracts, allowing to simplify all types of transactions and make GAS easier to integrate into applications.