Neo sets sights on DeFi, unveils EVM-compatible sidechain

Neo founder Da Hongfei during his speech at Neo’s APAC hackathon’s

Neo blockchain has announced the development of a new Ethereum virtual machine (EVM)-compatible sidechain. An EVM-compatible blockchain can execute smart contracts written for Ethereum without changes.

See related article: In Conversation with Da Hongfei, Neo: China-Born Digital Asset Protocol

Fast facts

• Neo founder, Da Hongfei, introduced the sidechain during his keynote speech at Neo’s 2023 Asia-Pacific hackathon’s grand finale held in Hong Kong.
• The Neo Sidechain will further allow the deployment of smart contracts, paving the way for trading-specific applications, including decentralized finance.
• The sidechain will be interoperable with Neo N3 (mainnet). Additionally, the sidechain is structured to counteract Maximum Extractable Value (MEV) attacks like frontrunning, to enhance the trading experience.
• DeFi has become a popular use case of blockchain technology with over US$41 billion worth of value locked in decentralized applications, according to DeFiLlama data.
• However, MEV attacks threaten its sustainability. The transparency of most DeFi transactions allows attackers to manipulate and exploit transaction details. They use sophisticated algorithms to monitor mempools, enabling them to execute profitable actions, including transaction reordering.
• Neo’s cryptocurrency, NEO, rose 13.7% to US$8.87 in the 24 hours to 8:20 p.m. in Hong Kong on Friday, putting on the strongest daily performance among the top 100 cryptocurrencies by market capitalization.

See related article: BSN to integrate Neo’s chain to bolster NFT issuance in China