Builder Spotlight: NeoSwap
by Claire Topalian on August 16, 2022

John Ennis is a PhD Mathematician, former founder of an AI services company, and current founder/CEO of NeoSwap.

In the below discussion with John, we learn about his vision for NeoSwap, an NFT liquidity platform that hosts "parties" enabling NFT trades and sales.
For those who aren’t familiar, can you share what your team at NeoSwap does?
John:
The big vision of NeoSwap is to dramatically increase the efficiency of secondary markets. In the real world, this is about used goods. There’s an enormous amount of waste when it comes to used goods in the real world. 50% of items donated to thrift stores are never used again. 70-85% of high fashion ends up in landfills.

You have all this stuff that could be used by someone else, but it gets stuck in people’s houses. In the NFT world, Web3 makes the sort of thing we want to do very natural. With NFTs, the issue is: people have a lot of trouble selling their NFTs. “Used NFTs,” or pre-owned NFTs, are harder to sell. 65% of used NFTs don’t sell. NFT Liquidity is what we are solving for with NeoSwap.

We solve this with a framework. We have “parties” - any community can host a party - people list the NFTs they are trying to sell, they can bid on other NFTs. They can set a spending limit. Sometimes there are complex multi-way trades.

You can check out our Twitter feed, we’ve done hundreds of trades on the Stacks blockchain. These provide value to everyone in the room and they provide rich data. We use this data to train an AI to propose multi-way trades outside of these parties. With inventory liquidation, you have all these stores that sell things they can’t sell to a warehouse where it’s sent out to try to sell again. We get rid of the warehouse.

You also have a lot of 3-way trades, where each person wants something that one of the other 2 people have. There can be a seamless trade within this grouping.

These parties are fun. We didn’t expect this, but it’s fun to see the connections people are making; it’s like a real party. Economic and social activity have always overlapped, but in Web2, that went away. Things became 2-sided. With Web3, you have an all-sided marketplace - like how people used to come together to the town square to sell goods and socialize.
What problem are you tackling with your project? What inspired you to address this problem?
John:
This is a problem I’ve been interested in since I was 12. My father is a mathematical psychologist, and loves to conduct experiments. One experiment was - at Christmas, my parents bought gifts for all the children. Rather than handing them out, they wrapped them and put them in a big box labeled “Surprise.” Everyone picked them at random and had to trade with each other. One Christmas, we all did a 3-way trade. There were no 2-way trades…the 3-way trade made everyone happy.

As I got older, I picked up the skills as a mathematician…in 2017, I came up with the first version of the NEoSwap algorithm, which solves for 3-way trades.

We’re going beyond money, reducing the need for money. This decentralizes commerce. It’s really about conducting commerce in small groups, bringing power to people.
What functionality does your work unlock for users/stakeholders?
John:
What we’re doing is increasing the value of Stacks NFTs. When people buy an NFT on Stacks, they know they won’t be stuck with it in the future - you can always trade it at a NeoSwap party later on.

Over an 8-week period, 35% of Stacks projects only sold in NeoSwap rooms - they didn’t sell on secondary marketplaces at all. We’re making Stacks NFTs liquids, which is really improving the quality of the ecosystem. When we expand to Solana, we will also have cross-chain rooms. We’re creating a free market for NFTs.

Can you share more about your experience working on your project? Any learnings or noteworthy pivots?
John:
As far as pivots, when I started working on this project, we started out thinking about the real world. This was way too hard. You have to somehow integrate with Facebook Marketplace. If you use AI to propose a trade, you no longer know who is selling what. On the blockchain, you get all the transparency, you always know who owns what and who is selling what. Web3 is about ownership, we’re about re-assigning ownership. The Native economic form of Web3 aligns with what we are doing.
How did you first get involved with the Stacks ecosystem?
John:
I read the book, “Life After Google,” and learned about Muneeb and Blockstack. It talks about Web3 and how important it’s going to be for decentralizing the internet. When Stacks launched on the mainnet, I noticed it and put it together that Web3 was where I should be building this solution. What I liked about Stacks - if you’re going to have a base layer for a decentralized internet, you must have it built on Bitcoin. Decentralized proof of work is critical. That really resonates with me. I’m fine using other chains for less secure things, but for economic activity, you must go with Bitcoin. For the most secure transactions, Bitcoin needs to be the base layer. What we’re doing can increase the value of decentralized databases as well.
Are there any updates or announcements coming up that readers can look for?
John:
The big one is our Solana expansion. We’re looking for beta testers. If you’re on Stacks and on Solana, please let us know. We need beta testers.
Where can we send readers to learn more?
John:
Follow NeoSwap on Twitter, join a NeoSwap party. Check us out on NeoSwap.party. Joining a party is the best way to learn about what we do.

Drop in your email to stay in the loop on Stacks Foundation news