What is the purpose of the gas incentive, how does that contribute to the smart contract system?
Gas is roughly the equivalent of ETH in function, in that users use GAS to deploy and run smart contracts. NEO is equivalent to shares in a company, which explains why it isn't divisible; it has no 'smart contract' function of its own. Each NEO generates GAS at a declining rate over 22 years, ultimately resulting in a 1:1 ratio of GAS to NEO. After 22 years, no more 'new' GAS is created. As 'shareholders' in the NEO network, NEO holders will eventually also receive a reward, in re-distributed GAS, for transactions taking place on the NEO network. This feature is not yet implemented, but when it is, the amount of GAS they receive will be a function of 1) how many NEO they hold and 2) how many transactions are taking place on the network. In theory, if the NEO network is successful, these rewards will more than compensate for the declining generation of 'new' GAS over time. Thus, there is always an incentive to hold NEO and receive GAS dividends (again, assuming the network itself is successful).
So, you need GAS to deploy contracts. GAS is the utility token. But you need NEO to generate GAS in the first place, and to collect a portion of fees on the network.
As a separate matter, users will be able to run network bookkeeping nodes at a cost of 1000 GAS. In theory, these nodes can charge whatever fees they want for the service they provide, but of course network users will choose the cheapest option available. Thus, in practice, bookkeeping nodes will likely charge very little, or perhaps even nothing. There will be little
financial incentive to run a bookkeeping node; those who run them will do so mostly for the benefit of the network (e.g., a bagholder might want to run a bookkeeping node to help ensure network health and protect their own investment).
