NEO coin is comfortably sitting at the 39^th spot on Coinmarketcap and is trading at $31.03. Its price is down by 22.99% in the last 24 hours at the time of this press and 39.63% in the last 7 days.

Its performance largely reflects the prevailing bearish conditions which means it is trading at a fairer entry point. It is also a long way off from its all-time high of $141 which it achieved in May at the height of the 2021 crypto bull run. The price is currently trading at a critical support level at $31 after substantial sell-offs during Monday’s trading session.

A recovery to its previous ATH means its current price would be a favorable entry point. However, its ability to recover largely depends on what the project is doing and how it will generate value for NEO. A deeper look at the project might shed some light on the potential direction of the NEO cryptocurrency and its potential future.

NEO’s history and development

NEO has been around since 2014 and was previously known as Antshares. It has barely made the headlines for the last few years and its developers want to change that through a recent relaunch under the name NEO 3.0 or N3. It is a smart-contract-enabled platform that has earned the nickname ‘Chinese Ethereum’ but it is a fully-fledged network that can stand on its own.

Its latest upgrade introduced various features such as a decentralized file storage solution, a decentralized protocol known as Flamingo which will take on the competitor Filecoin and enable users to have full control of their data. It will provide data to smart contracts through a built-in oracle. It also has cross-chain interoperability which will allow it to interact with other blockchain projects and also enable the transition of projects to its network. These updates highlight the network’s plan to dive deep into DeFi because most of those solutions are certainly aimed at facilitating Dapps.

Since it is heavily focused on DeFi, it offers opportunities for the participant to stake and provide liquidity on its network in exchange for rewards. Users can thus directly be involved in the network operations while earning a share of the value generated by the network. Cross-chain interoperability is an important growth area for the platform especially now that other major networks such as Ethereum are experiencing congestion and high transaction fees.

The new N3 network replaces the NEP5 asset standard with NEP17. The network also has a new consensus mechanism that leverages a new democratic and on-chain governance mechanism that requires 21 candidates to join the NEO council. NEO holders have to vote for the 21 candidates and anyone can participate. The platform’s top 7 nodes will become the consensus nodes and council voting will take place every 21 blocks. This approach provides the flexibility and agility that the blockchain needs.

NEO holders can hodl to earn GAS by staking their tokens and the gas they earn can then be used to buy more NEO. There is also another major aspect of the NEO platform that sets it apart from other blockchain projects and that is the digital identity feature. It makes it easy to digitize assets in a decentralized, trustless, and open manner, without the involvement of intermediaries. Digital identities are an essential part of the network and it is a requirement for everyone including entities and corporations.

Transactions between participants in the network will only be possible if the participants have the right identity. This approach is also ideal for regulatory compliance. While NEO appears to be the Swiss army knife of blockchains, it has a lot of competition to deal with. More competition means slower growth and NEO is currently overshadowed by the Ethereum network. However, NEO has been steadily growing and its robust features and offerings make it an attractive network for blockchain projects.