A new proposal from COZ’s Tyler Adams has been posted on the neo.community forum, outlining a set of possible changes aimed at enhancing Neo’s competitiveness on both cost and performance. Titled “Competitive Fee and Blocktime Enhancements,” the proposal combines recently enabled protocol features to dramatically lower transaction fees and reduce block generation time.

Fee reduction and performance gains

At the heart of the proposal is a major reduction to the execution fee factor from its current level down to 0.01. This change would lower the cost of transaction execution across the board, bringing system fees for most smart contract interactions to near-zero levels. Adams describes this shift as making transactions “effectively compute-free,” a move aimed at stimulating greater network activity and attracting projects with narrow per-transaction margins.

For developers building applications on Neo, the implications are direct. Flamingo Finance, for instance, would see average swap fees drop below $0.02 even when factoring in GAS price fluctuations over the past twelve months. According to Adams, this change would position Flamingo to “compete directly on fees,” and allow more complex or compute-heavy applications to become financially viable.

The fee adjustment leverages enhancements introduced in Neo‑CLI v3.9.0, particularly the ability to set the execution fee factor with greater precision. These protocol improvements enable fine-grained tuning of fee economics, supporting more dynamic network policy while maintaining backward compatibility with Neo N3.

Faster block production

Alongside the fee reduction, the proposal calls for a network-wide transition to three-second block times. This change builds on groundwork laid in Neo‑CLI v3.8.0, which introduced block time configurability via the Policy native contract. With this functionality already live in the protocol, implementing the shorter block interval requires only a manual configuration update by consensus node operators.

To preserve network stability at this faster cadence, the proposal also calls for a reduction in the number of transactions per block, down to 200, and a fivefold decrease in GAS generated per block. These adjustments are intended to maintain equilibrium in GAS issuance and avoid potential performance bottlenecks.

Reducing block time would improve overall network responsiveness and enhance the user experience for applications that rely on fast transaction finality. Adams noted that the change is “insensitive to congestion risk” and can be reversed if necessary, but argued that the benefits outweigh the trade-offs.

Governance and implementation path

To enact the proposal, coordination is required across multiple roles within the Neo ecosystem. Policy-level changes – such as adjusting the execution fee factor, GAS per block, and the maximum valid block range – must be committed to the chain through a governance transaction. This process involves drafting the appropriate transaction, collecting the required number of Council member signatures, and submitting it for on-chain execution.

A one-week governance window is also proposed to accommodate the faster block cadence and ensure adequate time for community coordination.

While the proposal introduces a degree of congestion risk by simultaneously lowering fees and increasing transaction throughput, it argues that these trade-offs are acceptable. “Having transactions on the network is a good problem to have,” Adams wrote, noting that parameters can be dialed back if needed.

The proposal is currently open for discussion on neo.community, Neo’s new governance forum MVP. Both Council members and community participants are encouraged to review the details, offer feedback, and signal their support.

The full proposal can be found below:
https://neo.community/proposals/698248d380b112125a296fc4

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