Erik Zhang outlines contract whitelist for zero-fee execution, unified token layer for Neo 4

Neo co-founder Erik Zhang has detailed a set of protocol-level updates spanning Neo N3 and the upcoming Neo 4, focused on transaction fee control and native token infrastructure.

Contract fee whitelist

Neo core developers have completed development of a Contract Fee Whitelist for Neo N3, with the feature now entering testing and porting to Neo 4. The mechanism allows selected smart contracts to operate under alternative fee rules, defined at the protocol level.

Whitelisted contracts adopt a fixed-rate GAS model, enabling predictable and stable execution costs. For Neo 4, the design extends further, introducing a zero-fee execution mode for critical on-chain infrastructure. This applies to use cases such as stablecoins and identity systems, where transactions can be executed without GAS fees at the protocol level.

Control over the whitelist is assigned to the Neo Council through the native PolicyContract, allowing governance to determine which contracts qualify.

TokenManagement native contract

Zhang also announced the addition of TokenManagement, a new native contract designed to unify token infrastructure on Neo. The contract provides a shared foundation for both fungible and non-fungible tokens, replacing the need for projects to implement token logic independently. The NEO and GAS native contracts will also be adjusted to use the new management contract.

TokenManagement supports NEP-17-style fungible tokens and NFTs using the same underlying primitives, including deterministic asset identity, shared accounting logic, unified storage, and standardized events and callbacks.

By consolidating these components at the protocol level, Neo aims to reduce duplicated code and improve token security across the ecosystem.

Protected token callbacks

As part of the TokenManagement rollout, Neo has added virtual machine-level enforcement for token callbacks. Methods such as onPayment, onNFTPayment, onTransfer, and onNFTTransfer can now only be invoked by native contracts.

This change prevents spoofed callback calls, forged token interactions, and a class of reentrancy and logic-spoofing attacks. Token callback security is enforced directly by the VM rather than relying on developer convention.

Enshrining protocol-level primitives

According to Zhang, TokenManagement reflects a broader shift in Neo’s design philosophy. Core mechanics are being moved into audited native contracts, allowing application developers to focus on higher-level logic instead of low-level accounting or implementation details.

Neo positions this approach as groundwork for further improving on-chain security while improving the long-term maintainability of the protocol.

The announcements may be found on Zhang’s X page:
https://x.com/neoerikzhang