Scathing Study Reveals NEO Has Little Chance of Achieving Any Of Its Crypto Goals
NEO has plummeted in value in recent months along with the rest of the crypto industry. A scathing study, however, shows that NEO is most likely going to completely fail as a project and has little chance of achieving its goals.
The study was first posted on Steemit last month under the title, “Serious Issues With $NEO: It Does Not Work.” Then, this past week, the same team uploaded a follow-up post with further details about why they believe NEO to be a failure. The first part of that study is called, “$NEO: The Great Heist (An Analytical Research Case Study) Pt. 1.”
The team decided to upload the more detailed version of the study after receiving criticism from the NEO community for their original post. The community felt the original post lacked detail. Now, with this latest version of the study, the team goes into greater detail about why they believe NEO is a complete failure.
Basically, the post spends thousands of words explaining why NEO is a failure. The researchers explore the technological capabilities of NEO, the history of AntShares, and the ICOs that have taken place on the NEO platform.
The piece covers every aspect of NEO’s core existence, including its creators, its current developers, and the fundamental code underpinning NEO. After studying all of these components, the team comes up with a simple conclusion:
“$NEO is a project that falls well short of its promises and its leadership more than likely does not possess the competency or the skillset necessary to ensure that this product is a success on any commercial level.”
Let’s take a closer look at what the team found.
The Founding of NEO is Controversial, and AntShares Was Created Just a Few Months Before the NEO Rebrand
First, even the very early days of NEO are controversial. NEO was rebranded from AntShares in mid-2017. The Wikipedia page for NEO insists, to this day, that AntShares dates back to 2014, suggesting that NEO’s team had multiple years of blockchain development experience before rebranding to NEO.
That’s not true, according to this new report:
“Antshares was a project that was incepted only a few short months before the rebrand to $NEO.”
This runs contradictory to statements made by Da Hongfei (the de-facto CEO of NEO). A CoinTelegraph article from 2016, for example, describes how Da Hongfei started the AntShares project two years ago.
“Specifically, the statement, “The team started the project two years ago”, rings false and there are no verified results to prove that the project was active in any meaningful way at that point in time.”
NEO’s website even emphasizes this fact. The NEO website states that NEO was formally established in 2014 and has been open sourced on GitHub since June 2015, for example. The Antshares testnet, however, did not launch until November 2015, according to a YouTube video posted by the project.
NEO Never Partnered with Microsoft
NEO is also criticized for alleging to have a partnership with Microsoft.
“The claim that Antshares (effectively $NEO) had ever partnered with Microsoft (which is something that the team perpetuated through their own ANN thread) is patently false. This same claim was also reiterated numerous times by the $NEO project through their own platforms in the latter months of 2017 and in early 2018. However, talks of Microsoft have died down substantially after additional scrutiny on the relationship was given in the early months of 2018, specifically January and February.”
In other words, NEO quietly allowed rumors to circulate that they had partnered with Microsoft. They did little to dispel the rumors, and the team even perpetuated the rumors in the NEO announcement thread.
NEO Has Run Three ICOs for the Same Project
The original AntShares announcement thread mentions a unique ICO structure.
The company claims to have completed phase 1 of its ICO in October 2015, raising 2100 bitcoins. At the time, bitcoin was worth about $262, which means the company raised about $550,200 in its initial ICO.
The AntShares video then announces the second phase of the ICO, which was scheduled to take place on August 8, 2016. “Antshares shall commence Phase II of its global ICO” on August 8, 2016, explains the video.
The second ICO appeared to take place, and news outlets reported the AntShares ICO at the time, claiming that the company raised 6,119.53 bitcoins or approximately $3.7 to $4 million during the first half of the ICO.
It was also reported that the total funding for the second ICO was approximately $4.5 million, with that money raised to develop Onchain. Here’s why that’s important, according to the report:
“In addition, the article which revealed the total funding for second ICO for Antshares also divulged that approximately $4.5 million was raised in total between both crowdsales by the Antshares team in order to manifest ‘Onchain’. Thus, $NEO is effectively the owners of Onchain.”
Finally, the third ICO for AntShares came after the rebrand to NEO. This ICO took place between August 8 and September 9, 2017, raising $28 million.
“Perhaps what is most notable is that there was no reason given to the general public for the initiation of yet another ICO, a year after the conclusion of a two-part fundraise.”
In other words, the team behind AntShares scheduled three ICOs while trying to quietly keep news about their first and second ICOs away from the public.
NEO Has Hosted Few Legitimate ICOs, and Even the Successful ICOs Have Shady Connections to the NEO Team
NEO was designed to be the Ethereum of China. Part of NEO’s goal was to create an effective crowdfunding platform where companies could launch their own ICOs.
This latest report analyzes four ICOs specifically, including Loopring, ONT, Deepbrain, and THEKEY. The researchers found a number of curious things with all of these ICOs.
The Loppring ICO, for example, reportedly raised $45 million. Crunchbase, however, reported that the $45 million in funding came directly from the $NEO team. Crunchbase lists only one Loopring investor: NEO. It also lists Da Hongfei, CEO of NEO, as a board member for Loopring.
Today, Loopring has declined significantly from its peak. The $NEO iteration of Loopring has a 24-hour trading volume of $45,000 on average, down from a peak of $9 million at one point in Loopring’s history.
The researchers found problems with the token distribution system for Loopring. One Reddit user claimed to have found documents showing that 60% of the tokens were owned by the Loopring team, for example. There’s limited public disclosure over how Loopring tokens are distributed:
“Considering the fact that $NEO is the sole owner of any distributed tokens from a $45 million investment into the project and the potential that 60% of the tokens were kept by the team themselves, it is possible that the vast majority of all tokens were owned by $NEO in some manner or the other members of Loopring (which contains $NEO) at some point.”
Researchers found more unusual information about the Deepbrain Chain ICO. When that ICO originally took place, it was reported that NEO Council (a subsidiary of NEO) was one of the direct investors into Deepbrain Chain. Since then, however, all mentions of this have been scrubbed from the internet. Researchers also expressed concern about the technological challenges facing Deepbrain Chain.
Ontology, meanwhile, was one of the most prominent projects to launch on the NEO blockchain. Researchers found curious information about this project as well. The founder of Ontology, for example, is the project lead for NEO and the co-founder of Onchain: Li Jun. Da Hongfei is also reportedly connected to the Ontology project, leading researchers to conclude “that $ONT is indeed a subsidiary of $NEO.”
All of these shady ICOs lead researchers to conclude the following:
“When considering fairly astronomical lies… the relaunch of another ICO, the obfuscation of team member roles in other projects, the centralization of the chain as well as the manipulation of information flow into the community, it becomes hard to think of $NEO as a legitimate project.”
NEO is Facing Huge Technical Problems and Cannot Scale As Advertised
After discussing the ICOs that have taken place on NEO, researchers turn their attention to the technical capabilities of the NEO network. They find that NEO’s code is insufficient for achieving its goals, and NEO is unlikely to achieve its stated goals at any point in the future based on its current platform:
The NEO blockchain claims to be scalable to 1,000 transactions per second, but researchers find this unlikely
- NEO claims their blockchain will eventually scale to 10,000 transactions per second
- NEO claims to use delegated byzantine fault tolerance as a consensus protocol
Researchers believe NEO’s technical capabilities are vastly overstated, and that it’s unlikely for NEO to scale upward to the capacities listed.
What Does All of This Mean?
Ultimately, the researchers are arguing that NEO is a failed project that stands little chance of being successful in the future.
The project has failed to achieve any meaningful goals. The major ICOs that have taken place on the NEO platform have suspiciously strong connections to NEO and the NEO team. There’s unclear token distribution among many of these projects, leading researchers to conclude that NEO’s ecosystem is a house of cards with little real value.
For all of these reasons, the researchers of this latest report believe NEO is “a heist” and a failure. You can read the full report here.