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Buy $NEO. Earn $GAS

If you own NEO but are not using it to participate in governance and earn GAS, you are missing out. I don’t mean missing out in the figurative “oh, you could have enjoyed yourself more” way. I mean, you are literally missing out on a financial benefit of owning the NEO token.

Of course, there are other reasons why you would want to participate in governance besides the financial benefit. Having a stake in the blockchain direction is an important one. Before addressing any reasons, let’s get down to basics.

In this post, we’ll explore what “Buy $NEO, Earn $GAS” means, how to do it, keeping it simple in Neo, and the importance of earning $GAS in preparation for the launch of NEO X.

What does this mean?

NEO tokens represent votes. One NEO equals one vote. As the Neo website states, “NEO token holders decide who is in charge of maintaining the Neo network through the election of the Neo Council. GAS token rewards are distributed to votes and council members alike.” In other words, NEO token holders are rewarded GAS for participating in on-chain governance.

This may come as a surprise to those people who have been token holders since Legacy or Antshares. When N3 launched, the GAS token became more important to the blockchain. Da Hongfei introduced the governance changes and “elastic manageability” philosophy at the end of 2020.

Neo News Today summarized the evolution of GAS in an article published in April 2021. The article highlights the increased utility and improved functionality of GAS in N3. I’d recommend that anyone start their education on $GAS by reading that article. I’ve included here a summary.

• Dual Token Model: NEO for governance, GAS for utility (divisible).

• Neo Legacy Issues: GAS faced adoption hurdles (UTXO, fee structure).

• N3 Improvements: No supply cap, fixed inflation rate (5 GAS/block), deflationary mechanism (fee burning).

• Usage Changes: Removal of 10 free GAS, promoting GAS use in transactions.

• Pricing Mechanism: N3's adjustable fees make NEO more accessible.

• Governance Incentive: Active participation is required for maximum GAS.

• NeoFS and Oracle Networks: GAS payments enable NeoFS and oracle network operations.

• Contract Asset Model: GAS (and NEO) as native contracts, simplifying integration in smart contracts.

A surprisingly common thing I’ve seen recently is the number of Legacy token holders who have not migrated their tokens to N3 and are unaware of the ability to earn GAS.

“. . . Is this something I should look into?” Yes, my guy.

Using NEO to participate in governance ensures a GAS reward.

So, how does Neo governance work? Three key groups participate: the NEO token holders, Council Candidates, and the Neo Council. Any Neo wallet address can register as a candidate and be elected to the Neo Council. The top 21 council candidates are voted in as members of the Neo Council. The council is responsible for maintaining the network.

All three groups are rewarded for their participation in blockchain governance. 5 GAS are minted every new block (approximately 10 million blocks yearly). The GAS is distributed as follows: 10% split between all NEO holders, 80% split between successful voters, and 10% split evenly among the 21 members of the NEO Council.

To maximize the benefits of NEO token ownership, you need to participate in the Neo blockchain governance. To do that, you must vote.

Voting can only take place from a NEO wallet. It cannot be done from a centralized exchange.

How to earn GAS

One NEO equals one vote. Assuming you already own NEO (if you don’t, see this post about how to buy NEO), you’ll then have to decide who to cast your vote for.

The 21 members of the Neo Council reward NEO holders who cast votes for them by sharing some of their GAS distributions. Each Council member chooses to share their GAS at different rates. Generally, the members with the most votes offer the least amount of rewards.

The easiest way to calculate potential GAS rewards is by using the GAS calculator on the ndapp.org website. Below is a comparison of what kind of GAS rewards you would receive for casting votes for the top, middle, and last of the 21 Council members.

As you can see, there is a significant difference in return between voting for the first and last Council member. There is also another option to earn GAS. You can convert your NEO token into bNEO and earn higher GAS rewards.

The bNEO token can be purchased on the Neo Burger website or on Flamingo Finance. With bNEO, you do not have to choose an individual Council member to vote for; Neo Burger handles this step. You claim GAS by “jazzing up” on the Neo Burger website.

Once you have voted for a Council member or converted NEO to bNEO, you begin to earn GAS. You must then “claim gas” either on the neo.org/governance website, the Neo Burger website, or via your wallet.

The Flamingo Joe Public Wallet holds 5 NEO and votes for Neo News Today. The assets are kept on a Ledger, and the NEON wallet app manages the wallet (learn more here). In the approximately 20 days that the wallet has voted for Neo News Today, it has earned 0.1 GAS.

When deciding who to vote for, there are arguments to be made in favor of every Council member. I chose Neo News Today because I appreciate their content and its impact on my understanding of Neo. Additionally, they have an “open letter regarding NNT’s candidacy for the Neo Council.” In voting for NNT I understand not only what my APR is (by the way, ndapp and the GAS calculator were created by NNT!) but I also understand what impact the shared GAS rewards will have on securing the network and benefiting the Neo community and ecosystem growth.

Regardless of who you vote for, you should vote. Participation in governance will ensure GAS rewards. Those rewards can mean a lot to different people; what you choose to do with them is up to you. You could use GAS rewards to swap for more NEO and earn greater GAS rewards. You could use GAS to pay transaction fees on the network. You could convert GAS to another N3 token. You could accumulate GAS in anticipation of future price action.

Whatever you do with GAS is up to you, but don’t miss out on earning it by failing to participate in governance.

Keep It Simple

In crypto, it’s easy to overcomplicate things. In a space where people measure their time by “cycles” and financial returns by “pumps” or “rug pulls,” it’s not hard to understand why complicated concepts could be looked upon as the solution to financial gain. If it’s complicated, it must mean there is a financial gain to be had. Right?

I’ve fallen victim to my own complexity bias before. Complexity bias is a logical fallacy that leads us to give undue credence to complex concepts. In the crypto context, this bias usually exists where we think the more complicated the concept or scheme, the more promise of financial return there is.

At the same time, we may overlook the simple solutions right in front of us due to our complexity bias. If we think gains are to be found only in the complex, then we might forget to seek them elsewhere.

The beauty of the GAS rewards is their simplicity. Every NEO token holder is incentivized to vote, and every vote is rewarded. No one is prevented from changing their vote at any time.

In Neo, a token holder can vote for a different Council member anytime. They simply cast their vote for another member. A NEO holder can choose to vote for a non-Council member. They just have to select a candidate's wallet address. Anyone can make their wallet a candidate address. It would be interesting to see more addresses become candidates alongside with NEO token adoption.

Unlike other chains with “lock-ups” or “unbinding” periods, you can vote with your NEO however you choose, whenever you want. Competition among the Council members at this time isn’t that tight because of the allocation of votes. However, a Neo blockchain with more daily active addresses and tokens, more significant investment, and more at stake would likely be a more competitive environment. All Council members would need to compete for votes.

Keeping it simple with NEO is rewarding. In the past year, the price of NEO has increased by 26%, and the price of GAS has increased by 117.5%. Since there is no lock-up or bonding period, you would have been able to sell or trade your NEO used for governance at any time during the past year. If you had just held NEO and voted for a Council member for the past year, you would have been rewarded an appreciating asset in GAS while having the option to trade or sell at any time.

For comparison, ATOM rewards staking with OSMO. ATOM staking does have a 21-day unbinding period, and switching validator votes is instant but can only be done once every 21 days. When looking at asset prices from a year ago today (3/27/24), the price of ATOM is up 13%, and the price of OSMO is up 60%. The price of NEO is up $26%, and the price of $GAS is up $117.5%.

Simplicity is rewarding with NEO. Sometimes, it may seem too simple, but resist the urge to overcomplicate the matter and simply HOLD NEO, EARN GAS.

Now Is A Good Time To Accumulate GAS

The time to accumulate GAS is now. The upcoming NEO X sidechain will directly impact the price of GAS. When news of the EVM sidechain development broke in November 2023, the price of GAS spiked.

At one point, the price of GAS was nearly double that of NEO. There is no telling what the price of GAS will do long-term after the launch of NEO X because there is so much more that needs to be determined (projects, devs, capital inflow, etc). However, we have seen what the news of an EVM sidechain and NEO has done in the past. It would be safe to assume that it is likely to have a positive impact on the price of GAS in the future as well. At least temporarily.

The launch date for NEO X hasn’t been announced yet, but if we take the bullish case of saying six months from now, you have some time to start accumulating GAS with NEO now.

For the love of GAS, get your NEO off exchanges into a wallet, and vote for a Neo Council Member. When the GAS pump comes, you’ll be glad you did.

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