Neo Global Development (NGD) has announced a new version of the core Neo2 node client, neo-cli v2.12.0. The new update changes the transaction priority mechanism, free GAS discount, and block size limit.

The update will be performed by consensus node operators on the Neo2 MainNet between 8-11 AM (UTC) on September 20th, 2020. During this time, the network may show some instability. The included protocol changes will go into effect at block height 6,200,000; node runners are urged to perform the upgrade before this occurs.

The primary change in v2.12.0 is an increase to the free GAS discount on system fees. These fees are most often paid when deploying or invoking smart contracts. The current 10 GAS allowance increases to 50 in the new update.

Existing contracts are designed to operate below 10 GAS-worth of computation by nodes. This allows efficient contracts to execute for free but makes it too expensive to include more complex logic.

The increase to 50 accommodates the upcoming Flamingo DeFi platform. Some of its modules, such as the automated market maker, have high computational requirements. Other contracts on Neo can also benefit from increased access to network resources.

The update also lowers the maximum number of transactions per block from 500 to 200, for both free and paid transactions. This change should help ensure network stability by compensating for an expected increase in contract execution time.

Finally, neo-cli v2.12.0 also introduces a priority bidding mode on transactions. It will be possible for blocks to fill all the way up to 200 transactions (past the previous limit of 20) without any network fees paid. However, the priority mechanism changes ensure that transactions will receive priority relative to the fee paid.

As a result, if network activity increases to the point that blocks are frequently filled to 200, users will need to start adding transaction fees (minimum 0.001 GAS) to raise the probability they are processed in the next block.

EDIT: Since this article was published, a hotfixed version was released. The latest update, v2.12.1, can be downloaded here.