Neo, the open-source blockchain platform, has announced its ambitious plans to develop a new Ethereum Virtual Machine (EVM)-compatible sidechain. This strategic move is aimed at expanding Neo’s capabilities in the decentralized finance (DeFi) sector, a rapidly growing segment of the blockchain industry.
Enhanced Interoperability and Key Features
In a press release shared with CryptoNews, Neo revealed that its sidechain will offer full interoperability with Neo N3 (Mainnet), while retaining the essential Neo features that have contributed to its success. One of these key features is the delegated Byzantine Fault Tolerance (dBFT) consensus mechanism, ensuring reliable and secure transaction processing.
By leveraging the new sidechain, users can expect faster transactions, improved scalability, and enhanced fairness within the Neo network. Additionally, developers will benefit from the Neo Virtual Machine (Neo-VM) multi-language development environment which allows them to create smart contracts in the programming language of their choice. This flexibility empowers developers to unleash their creative potential and contribute to the rapidly expanding DeFi ecosystem.
Addressing Security Concerns in DeFi
While DeFi has gained significant traction as a revolutionary application of blockchain technology, it has also faced challenges, including the threat of Miner Extractable Value (MEV) attacks. These exploitative attacks take advantage of the transparent nature of DeFi transactions, resulting in issues such as front-running and sandwich attacks.
Neo has taken these security concerns seriously and engineered its sidechain with advanced security measures. One notable feature is the option to “envelop” transactions, allowing users to encrypt transaction content and metadata to protect sensitive information from potential attackers. Additionally, users can utilize proxy contracts to enhance privacy, effectively concealing their identity and deterring exploitation.
These measures, coupled with Neo’s dBFT consensus mechanism, aim to create a more secure and fair trading environment for participants. Neo Founder, Da Hongfei, emphasized the importance of these enhancements, stating:
“Our goal is to enable developers and users to fully capitalize on the potential of DeFi while prioritizing security and fairness. With the development of our EVM-compatible sidechain, we are confident that we can address the pressing challenges and pave the way for the future of decentralized finance.”
