Hey folks, this is yet another article on a small marketcap altcoin $NEON, the native token for Neon EVM, which from what I’ll break down further in this article, is a protocol that’s combining the best of both Ethereum and Solana and allowing Ethereum users to essentially build and transact on Solana through parallel executions.

Why would Ethereum users want to transact on Solana?

Sorry if you’re an $ETH maxi, but it’s well known that despite some of its hiccups, Solana is able to allow crazy-high throughput in transactions speeds as well as micro-fraction amounts of gas.

Now to be clear, not only is Ethereum extremely battle-tested and highly secure, but it always has had problems with scaling, as any person who tried to transact on Ethereum at the height of the last bull market knows:

https://finance.yahoo.com/quote/GAS-ETH/

This is scheduled to change significantly for whenever proto-danksharding finally gets rolled out, but for the time being, whenever I write about a token that’s only available on Ethereum Mainnet, I always have to add a caveat that many (if not all) strategies are only worth doing if you’re moving large amounts, otherwise you may be paying more in gas fees than the underlying value of the assets that you’re trying to move.

Despite all of its upgrades over the past year, Ethereum still only averages less than 20 transactions per second, which Solana can do in a fraction of a second:

https://twitter.com/solana_daily/status/1437431166731177988/photo/1

What Neon brings to the table

Neon EVM is a smart contract on Solana that allows Ethereum users to gain access Solana without any code changes, while at the same time being able to access high transaction speeds and lower gas fees.

Through the “Neon Proxy,” the Neon EVM acts as an Ethereum RPC that essentially unwraps incoming data from Ethereum and translates into something that the Solana block chain can read. On both the Neon EVM and Solana, transactions are executed in parallel, thus allowing Ethereum users access to Solana’s framework.

In layman’s terms, Neon basically acts as a translator that can change Ethereum language into Solana that will allow Ethereum dapps to scale on Solana. Unfortunately because I have literally no dev background, that’s as best of an explanation I can give for how this all works, but if you’re curious I’d recommend checking this live demo given recently in ETH Istanbul:

$NEON Tokenomics

The native token of NeonEVM is $NEON, which was launched roughly 6 months ago, with a total fixed supply of 1 billion. 1 billion is a lot of tokens, but the good news is that for at least the first year (until June 2024), the majority of tokens are locked, although there’s a pretty significant linear unlock afterwards:

https://neonevm.org/blog/NEON-tokenomics

Utility: The $NEON token currently has two major functions — fees for executed transactions as well as governance. From what I could tell, the governance arm of utility…just doesn’t have a lot going on…

https://vote.neonevm.org/8SgoDGTWvvudy3Voe5xNQQ2URAS1ZUTG5kq77KK2L9y6

The fees component depends on NeonEVM’s utilization, which hasn’t seen a whole lot of action either…until this past week, where we’ve finally seen some life breathed into the protocol:

Similarly during this same timeframe, we’ve seen $NEON do 3x to all time highs in price action:

As the Solana narrative runs hotter this bull cycle (which I think it will), I think it’s inevitable that more and more protocols will start looking at NeonEVM to tap into Solana’s for its crazy-fast transaction speeds, thus bolstering not only Solana’s entire ecosystem, but potentially Ethereum’s as well. And stuck in the middle between these will $NEON exploding in price. If you’re bullish on Solana, $NEON is a perfect play for an altcoin that might be able to out perform $SOL itself.

Conclusion

Given the data, it’s strongly apparent that we’re still definitely really early, and if NeonEVM picks up more adoption, I would imagine that this might drive a much bigger run-up in price. As bullish as this might seem for the short-term however, I would be wary as we’re getting out of Q1 2024, as there might be more news about proto-danksharding finally allowing Ethereum to scale, as well as the June release of millions of new $NEON hitting the market.

As always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!

Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!