Da Hongfei appeared on CNBC Africa today to do an interview with host Ran Neu-Ner regarding China and the NEO platform. The interview transcript can be found below.
Ran Neu-Ner: China. China. China. And China. That’s all we hear in the crypto markets this week. This week all the way from China, are the guys who run what is being called the ‘Ethereum of China’, and that’s called NEO. With me is the founder, Da Hongfei. Da, you guys are in China, how are the regulations effecting what you guys are doing?
Da Hongfei: The trading and the market, the volume dropped very dramatically, and the rumours are that all the exchanges will be closed in China. So everyone is waiting for the regulations.
Ran: How does that stop what you guys are doing at NEO? Tell us a little bit about what you guys are actually doing at NEO.
Da: NEO actually is a blockchain, or an open network for the Smart Economy. So it is not built for ICO’s. A few weeks ago the Chinese regulators just said that ICOs are not allowed in China, and it definitely affects us.
Ran: So your blockchain is not actually made for ICOs, it’s made for smart economies. Whats the difference?
Da: As of today you can see a lot of ICOs, they are very, they’re not connected to the real economy. So there are many decentralised applications on Ethereum, but rarely I meet someone who is actually using these decentralised applications. All the usage is trading, trading different tokens. That is not what we want to do. We want to have real economy running on the NEO blockchain.
Ran: So you want to create economic applications, that run on smart contracts, on the NEO blockchain – Is that right?
Da: Yes. Absolutely, yes.
Ran: And not to be used as this token, or this platform for issuing tokens for ICOs?
Da: Yeah, so not solely to be used by issuing tokens, because there can be a lot of real economic activities. There are three fundamental pillars of NEO, the blockchain. So these are digital assets, smart contracts and digital identities. Only if you have digital identity you can to link the real economy, the real world, the physical world, with the blockchain world.
Ran: And is your blockchain already working? Is your blockchain up and running already?
Da: Actually the mainnet has been launched for about a year, and a month ago we upgraded to 2.0 after the rebranding. After we rebranded from Antshares to NEO we launched the 2.0 mainnet.
Ran: Are there any applications working on your blockchain already?
Da: Yeah, there are some test applications, but not full blown digital applications. We just launched the smart contract a month ago, so there are many developments ongoing, but they have not been officially launched yet.
Ran: How many contributors in your blockchain?
Da: NEO is a very community driven project, so we have I would say about 100 – 300 developers over the world, but only a few of them are the core developers.
Ran: And there is two tokens when you look at NEO. There is the NEO token and then there is this GAS token. What’s the difference between the two?
Da: So it’s a very innovative design. We have this so called duel token design. Because in Ethereum and in other blockchains, the token serves two functions. One is like the equity, or the voting power, or the ownership of the blockchain, and also as the transaction fee. So it’s coupled, the two usages are coupled. It’s very weird. It’s like when you want to buy a cup of coffee in Starbucks, you need to spend the equity, the shares of Starbucks, so it’s a little bit unnatural. So we’ve decoupled those two usages. The NEO token is what we call the governance token. You use NEO to vote, to govern the blockchain, and GAS token is what we call the utility token. You use it to pay for transaction fees, to deploy smart contracts, and to execute smart contracts.
Ran: So GAS is the mineable token and NEO is in fixed supply then?
Da: It’s a little bit like you’re virtually mining GAS with your NEO token. So every GAS that is consumed on the blockchain will be redistributed proportionally to all the NEO holders.
Ran: Do you think this ban of ICOs in China is temporary or permanent?
Da: I won’t say it’s temporary because the regulators have said very clearly that raising money from the general public is not allowed in China. Or otherwise at least you need to get approved first. But raising money from accredited private investors is still legal in China. So if you want to build a decentralised application, you want to get money from the Chinese investors, you can talk to them privately. And if there is less than 200 investors, that would be regarded as private fundraising.
Ran: So they’ve gone from public fundraising to attracting just a few high net worth individuals or institutions.