Gas Price (GAS)

Everything You Need to Know About GAS!

Talking about powering smart contracts and decentralized applications on the NEO blockchain, a coin that plays a vital behind-the-scenes role is GAS. Usually overshadowed by its sister token, NEO, GAS is the vital organ keeping the whole network functional. Every transaction executed, or every smart contract deployed on NEO, is due to GAS doing the heavy lifting in the background.

But it’s not just a fee token — it’s a utility, a reward, and, more importantly, a critical component of the NEO ecosystem’s dual-token design. Since inception, GAS has been offering value to traders, holders and developers alike, becoming an asset on its own. GAS price is tightly coupled with NEO, so it mirrors the broader activity and the sentiment of the NEO ecosystem. 

We’ll break down everything about GAS, its history, how it works and where it’s headed in the near future, along with GAS price prediction. From tokenomics to utility and trading stats, here’s your complete guide on GAS.

What is GAS?

Developed by the Neo Foundation, the organization behind the NEO blockchain, GAS is one of two native tokens. NEO is majorly used for governance — like voting on protocol changes, etc — and GAS is literally the fuel of the network. It takes care of all on-chain activities like smart contract extensions to transactions and network resources.

If we had to draw parallels, one could say GAS is the equivalent of “ether” on Ethereum — basically the token that gets consumed every time something happens on the NEO blockchain. Not only is this crucial for keeping the network secure, but it’s also important for keeping it economically sustainable and efficient.

Unlike other blockchains that use a single-token model, NEO’s dual-token system has a separation of utility and governance. GAS incentivizes the network nodes to keep them running and helps facilitate cost-effective interactions with DApps built on NEO. It’s also a passive income opportunity in the long term for holders and stakers as it’s an automatically generated reward for holding NEO.

Who Are the Founders of GAS?

As we’ve covered already, GAS is part of the NEO ecosystem. That ecosystem was developed by Erik Zhang and Da Hongfei, also the co-founders of the Neo Foundation. Originally, it was launched as Antshares back in 2014, with the platform rebranding to NEO three years later, in 2017. The aim was to build a smart economy — integrating digital identity, smart contracts, and digital assets.

Da Hongfei has been a major player in the blockchain space, especially in China. NEO is often called China’s Ethereum, with Hongfei’s vision being to create a blockchain that would balance decentralization with regulatory friendliness. Zhang, on the other hand, is the mastermind behind the technical infrastructure and authored the dBFT (Delegated Byzantine Fault Tolerance) consensus algorithm. It’s a unique protocol allowing GAS to be earned and used.

Together, the two laid the foundation for a two-token model, and their decision to separate NEO and GAS has not only shaped how the NEO ecosystem functions but has also played a key role in influencing GAS price.

What Makes GAS Unique?

If you’re not familiar with the blockchain, you might think GAS is just another utility token. The truth is, it’s far from it. Under the hood, it’s extremely different, especially when you compare it to tokens that rely on Proof of Work or even the traditional Proof of Stake models.

Thanks to Erik Zhang’s dBFT, which is a variation of PoS, NEO relies on raw computing power similar to Bitcoin. It also assigns consensus responsibilities to a very small number of delegated nodes simply by staking coins to validate blocks like Ethereum 2.0.

These nodes in turn are voted in by NEO holders and end up being responsible for maintaining network integrity and validating transactions. 

So, naturally, the question is, how does GAS fit in? It is the processing fee token, which is required to interact with smart contracts, execute transactions, and deploy dApps on the network. In fact, what makes it extremely interesting is that GAS is generated over time as a reward for holding NEO. This allows for a unique incentive structure that relies on one another: hold NEO, earn GAS, and use the token, based on the current GAS price, by trading it on the open market or to power applications.

Early on, if you held 1,000 NEO, you could generate around 1 GAS per day. But over time, the reward rate has decreased as the total supply of GAS approaches its cap. This intentional gradual deflation balances the value given its increasing utility across the ecosystem.

At the end of the day, separating utility and governance allows the NEO platform to avoid volatile spikes in fee during governance events. All in all, assuring long-term incentives for ecosystem participants, giving holders a truly distinctive edge.

How Many GAS Coins Are There in Circulation?

There are about 65 million GAS tokens currently in circulation out of a total of 100 million. It’s important to note that GAS is not pre-minted, it’s generated gradually over time, as discussed earlier, being a reward to NEO holders.

This generation mechanism is not unique but is also tied directly to the block height of the NEO blockchain. Every time a new block comes into existence, a tiny amount of GAS is released to holders staking or holding NEO in compatible wallets. Functionally, this makes GAS quite similar to dividend payments in traditional finance.

Similarly GAS price is in many ways tied to the supply and demand of NEO. So, if NEO is in demand, it’s likely that GAS price will also be quite high.

Now, with the network’s gradual deflationary model, the token isn’t handed out as frequently as it was early on. This mechanism is helping sustain the GAS price in the long term while also limiting any sort of inflation. But for holders and future buyers, this is an incredibly promising opportunity. GAS is gaining real-world traction, and with its current supply at 65 million and emissions tapering off, the scarcity could be a key driver of the GAS price. Especially if the adoption of the NEO network keeps on growing.

How is the GAS Network Secured?

A hybrid model that blends decentralization with high efficiency is behind the security of GAS. Fundamentally, it’s tied to the architecture of the NEO blockchain, using a dBFT consensus mechanism. 

In dBFT, NEO token holders get to vote for a small group of consensus nodes. These nodes are referred to as “bookkeepers” and are trusted validators responsible for producing new blocks, verifying transactions, and, most importantly of all, keeping the network safe and secure. And then a majority of nodes agree on a block, permanently adding it to the blockchain.

There are two core advantages of this system:

1. Finality of Transactions: Unlike traditional PoW systems, where chain reorganizations can take place, this can’t be reversed once a block is confirmed.

2. Energy Efficiency: dBFT doesn’t rely on competitive mining, so the energy footprint of the NEO/GAS ecosystem is extremely low compared to Bitcoin and other PoW-based blockchains.

Additionally, GAS transactions are also secured through smart contract auditing and cryptographic mechanisms. This ensures safety in DApp deployment, token transfers, and contract execution, creating a scalable and robust environment for everyone involved.

GAS Ecosystem

GAS tokens serve as the economic engine of the NEO smart economy. They enable everything from everyday token transfers to complex decentralized application execution. It’s the primary utility token on the NEO network, playing a major part in scalability, health and functionality. 

Core Layer for Tools and Infrastructure

GAS is the payment standard for everything. From paying network validators to launching tokenized assets, it covers all. More importantly, it goes beyond basic transactions, playing a key role in supporting NEO’s broader infrastructure and handling developer tools, node operations, and other services across the chain.

GAS is actively consumed, unlike other blockchains where tokens are passively used — adding to its economic model and improving scarcity. NEO’s infrastructure, which includes its virtual machine — NeoVM and Oracle Service — both require GAS for data retrieval and computation. As a result, not only is GAS essential for on-chain logic, but also for off-chain data feeds. 

It’s involved in every step of the way, whether a developer pulls some real-world weather data or performs some asset swaps in a smart contract.

Enterprise and Governance Applications

The next goal for NEO is enterprise integration and in order to make it happen, GAS will play another major role. It’s being positioned as the preferred settlement and execution token for real-world cases. So, basically, identity verification, tokenized financial instruments, legal automation — GAS will be central to everything.

This is not just the developer’s folly. It’s already being used to power NeoID, the digital identity framework along with NeoFS, a decentralized file storage solution. And both these platforms are core pillars of NEO’s next-gen smart economy. 

Now, in context to governance, NEO does hold the key with holders getting to vote on changes to the network, but GAS provides the execution. So all the costs paid to implement those decisions, upgrading contracts or deploying any necessary changes, all happen through GAS.

Soon, as NEO gets to iterate more Layer-2 capabilities, GAS will take on broader cross-chain functions, too. Maybe some years down the line, GAS could be used in wrapped form across Ethereum, BNB Chain, and others. 

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