NEO Gas (GAS) is one of two native tokens for the Neo blockchain, designated as the fuel token, used to power transactions and execute smart contracts.^[1][2]

Overview

Within the Neo network, GAS is intended to cover operational and storage costs for tokens and smart contracts, aiming to deter node resource abuse. System fees undergo burning, while network fees are designed to serve as incentives for consensus nodes. The minimum GAS unit is 0.00000001, and claiming doesn't mandate NEO staking. GAS distribution practices differ among exchanges. A significant portion is intended as a reward for voters actively engaging in network governance, requiring NEO holders to use a voting-supporting wallet for participation.^[3][4][5]

GAS Distribution to Users

Exchanges decide whether to distribute GAS, intending it as compensation to the Neo blockchain for recording and additional services. GAS, symbolizing the right to use the Neo Blockchain, is systematically generated upon obtaining NEO. In Neo N3, GAS is automatically claimed during NEO transfer transactions at an address. The claimed GAS amount is determined by a fixed formula based on the duration between a user's NEO transfers into and out of their address. For exchanges with consolidated addresses, the distribution process to a user is outlined, with precision improving in shorter snapshot intervals. Automatic GAS claiming occurs seamlessly as users transfer NEO into or out of their addresses.^[6]

Migration

N3, an upgraded version of Neo, introduced improvements in development experience, features, and economic models. Certain features are not compatible with Neo Legacy, leading to the N3 upgrade through a new genesis block, coexisting with Neo Legacy for an extended period. Users can migrate NEO and GAS tokens from Neo Legacy to N3 at a 1:1 ratio using a Neo N3-compatible wallet or supported exchange. Migration involves creating a new address on N3, sending tokens to a migration contract, and receiving equivalent tokens in the new address. Options include native migration support in wallets or using exchanges (with timeframes beyond Neo's control). A migration deadline will eventually exist, remaining open as long as the Neo Legacy network is operational. Fees apply on N3 for amounts below 10 NEO or 20 GAS and on Neo Legacy for complex transactions. N3 does not adopt the UTXO model.^[7]

Allocation

Initially, 5 GAS tokens per block are generated and distributed to the Neo Committee, NEO voters, and all NEO holders. The distribution follows these rules:

• NEO Holders (10%): GAS is calculated and distributed to NEO holders based on their holding period after completing NEO transfers or voting.
• Committee & Consensus Nodes (10%): This portion rewards the 21 committee members managing the Neo blockchain. Every 21 blocks (Epoch), votes are recalculated, and shares are redistributed. The speaker also receives network fees for the current block's transactions.
• Voters (80%): The majority of GAS incentivizes NEO holders to vote for committee members. Rewards, calculated and distributed during each 21-block epoch, are divided by 28 (21 for committee members, 7 for consensus nodes). Voters for elected consensus nodes get 2/28, while voters for non-consensus committee members receive 1/28 of this portion.^[8]