Neo X, an EVM-compatible sidechain, is pioneering a new approach to tackle the blockchain industry’s hidden issue of maximal extractable value (MEV), which is often referred to as the “invisible tax.” By leveraging an innovative dBFT consensus model and enveloped transactions, Neo X aims to create a secure and fair environment that enhances both MEV resistance and cross-chain interoperability.
The MEV Problem: An “Invisible Tax” on Blockchain Users
Maximal extractable value (MEV) occurs when block producers or miners manipulate the order of transactions in a block to maximize their profits, typically at the expense of users. This manipulation can lead to practices like front-running, sandwich attacks, and liquidation arbitrage, which drain billions of dollars from users’ pockets, without their knowledge or consent.
The MEV issue has grown increasingly severe, starting with higher transaction fees and network congestion and escalating into more dangerous forms of market manipulation. This undermines the fairness and transparency that blockchains are built on, threatening the decentralized ethos of the entire ecosystem.
Neo X’s Approach: Combatting Toxic MEV with Innovation
In response to the toxic effects of MEV, Neo X introduces a groundbreaking solution that protects blockchain transactions from manipulation. Neo X, which acts as a bridge between the Neo blockchain and Ethereum Virtual Machine (EVM)-based networks, uses a combination of delegated Byzantine fault tolerance (dBFT) consensus and enveloped transactions to create an MEV-resistant environment.
The dBFT consensus mechanism ensures that the blockchain remains secure and functional even in the presence of malicious actors or faulty participants. This consensus method allows the network to quickly and reliably make decisions without compromising its security, even when some validators act maliciously.
Moreover, enveloped transactions add a layer of protection to the blockchain’s transactions by wrapping them in a secure envelope, making it nearly impossible for malicious entities to exploit the system. This technique prevents miners and validators from manipulating the transaction order, thus ensuring that DApps (decentralized applications) maintain the integrity and fairness of their transactions.
Enhancing Interoperability and Cross-Chain Liquidity
Neo X goes beyond MEV resistance by solving one of the biggest challenges facing blockchain technology: interoperability. The platform establishes a native bridge between Neo X and Neo N3, allowing for seamless asset and data transfer across different blockchain ecosystems. This feature addresses the issues of cross-chain scalability and liquidity, which are essential for the growth of decentralized finance (DeFi) and DApps.
Through this innovative design, Neo X is positioned as a highly attractive option for both users and developers, as it facilitates greater access to liquidity and fosters collaboration across different blockchain ecosystems.
Empowering Web3 and AI Developers
Neo X is committed to building a robust and dynamic ecosystem, with a particular focus on integrating with key players in the Web3, blockchain, and artificial intelligence (AI) industries. By partnering with over 20 Web3 projects, including SubQuery (Web3 infrastructure builder), Phoenix (decentralized AI infrastructure), and ZeroX (Web3 game onboarding), Neo X supports the development of essential infrastructure and tools needed to deploy and scale DApps effectively.
In line with its innovation-driven vision, Neo X is also launching the $20 million Elevate Program, which aims to support early-stage projects that contribute to the ecosystem’s growth. Through the Elevate Program, Neo X plans to set new standards for Web3 security and design, encourage the development of next-gen DApps, and open the door to novel use cases in the blockchain space.
Conclusion: A New Era for Blockchain Security and Interoperability
With its unique approach to tackling MEV, Neo X is reshaping the future of blockchain technology. By introducing antitoxic MEV mechanisms, enhancing interoperability, and empowering developers, Neo X is paving the way for a more secure, fair, and efficient decentralized ecosystem. This makes Neo X an essential player in the blockchain space, contributing to the growth of Web3 and the broader digital economy.