The number of blockchain projects and services is growing rapidly and as of 2022, there are already more than 10,000 active blockchain-based cryptocurrencies out there. Add several hundred more private/enterprise-level blockchains and you can see a striving ecosystem.
With the evolving industry, many new solutions are being introduced for faster, cheaper and more reliable crypto experiences. But at the same time, more of them are focused on the Ethereum ecosystem. Let’s find out how this happened and why EVM compatibility has become the de-facto standard of today’s blockchain market.
Going a little back in history, Ethereum was created in 2014 to become one of the first virtual machines for blockchains able to execute complex business logic on-chain. For the project’s development, the Ethereum team had introduced a new programming language — Solidity, which was compiled directly into EVM bytecode.
And since most of the first crypto projects and services ran on Ethereum, Solidity gained great popularity among developers. That brings us to this day. We have now reached a point where the most successful decentralized applications are deployed in Ethereum and targeted at EVM, and their user base is many times larger than in the early days of Ethereum.
We also should consider that a lot of investment has gone into the infrastructure and solutions for DApps and services, which has served to grow the Ethereum ecosystem quite quickly. The EVM-based blockchains have been integrated with 100+ mobile wallets, cryptocurrency exchanges, and other custodian solutions that turn billions of dollars of daily ERC-20 trading volume around.
So, what is an Ethereum Virtual Machine (EVM) all about?
The Ethereum concept is based on the idea of a decentralized online computer — a programmable blockchain where the role of the EVM is to execute and deploy smart contracts.
EVM is a powerful virtual machine running in the sandbox mode that is embedded in each node, thereby enabling the maintenance of consensus in the blockchain.
Basically, EVM is the execution environment for smart contracts and the core of Ethereum, which can perform all kinds of programmable tasks on the blockchain.
Learn more about EVM: https://ethereum.org/en/developers/docs/evm/
You might be surprised, but there are now 100s of EVM blockchains or Ethereum-like networks that support smart contracts.
All these layer 1, layer 2 chains are fully compatible with EVM and are essentially forks of Ethereum. These Ethereum alternatives often run on a different consensus from POW, which allows them to provide higher speed, grant lower transaction fees, and feature higher capacity compared to Ethereum.
In addition to those listed here, you can also browse other EVM networks at chainlist.org.
Velas is often mentioned as a fork of Solana, but to be more precise, the project is a full hybrid EVM/eBPF chain of Solana and Ethereum that inherits the best of both networks.
Velas EVM is built into every node and is 100% compatible with Ethereum APIs. Developers can easily deploy existing Ethereum-based projects or launch new ones on Solidity with high speed and low commissions. An interesting feature of Velas EVM is the ability for developers to run their own node, which allows charging tx fees in a project-native token or opt for free transactions improving the user experience.
Velas Network fully supports Metamask and the ecosystem is rapidly growing through the integration with services like known block explorers, Oracle solutions, asset bridges, and many other great applications built originally for Ethereum. Recently, Velas team designed a 100 mln grant program for developers and projects running on Velas.
Furthermore, the project team follows all Ethereum updates and implements them to Velas blockchain to stay up to date.
Regarding network performance, to improve it, Velas nodes just need to upgrade their hardware while other EVM blockchains are limited by the software, because Ethereum node implementation (and its variety of forks) itself makes the performance bottleneck.
Comparing available EVMs
Ethereum: consensus layer
Serenity (formerly known as “Ethereum 2.0”) is an upgrade of the Ethereum blockchain aimed at improving the efficiency, speed, and scalability of the network, which helps reduce fees and increase network bandwidth.
Serenity upgrade consists of several phases, and according to the roadmap, the first phase is The Merge, which will be implemented soon. Ethereum will use the Proof-of-Stake (PoS) consensus instead of the traditional Proof-of-Work (PoW), which requires complex computations performed by video cards and other hardware.
Since this is a long-awaited and major event, the crypto community was expecting significant changes, which unfortunately will not be implemented in this update. It was expected that the migration to PoS consensus would speed up transaction processing and decrease gas fees. However, according to the developers, The Merge will only change the overall consensus algorithm and will not increase network throughput or reduce fees.
But with an update in phase two, which is called The Surge and scheduled for 2023, Ethereum will adopt sharding to scale the network, which will improve its performance and reduce the cost of transactions.
Because the Ethereum ecosystem is huge and there are many projects and services running on the blockchain, the full update will take a long time and may be delayed by developers.
Read more: Ethereum upgrades (formerly ‘Eth2’)
For now, projects are forced to wait, putting up with the current network situation and rising fees, or look for alternatives in other ecosystems.
Binance Smart Chain
Binance Smart Chain (BSC) is a fairly recent smart contract blockchain, introduced in late August 2020. BSC was created as a parallel blockchain to Binance Chain, which launched in April 2020 to facilitate decentralized trading.
BSC boasts smart contract functionality and compatibility with EVM combined with the blockchain’s high throughput. But basically, it is a fork of Ethereum with a controlled group of validators.
BSC relies on the PoSA (Proof of Staked Authority) consensus, which requires 21 validators to keep the chain up and running. As BSC is quite centralized, it is vulnerable to hacking and susceptible to 51% of assaults as well as system failures.
It is worth noting that BSC can potentially handle about 470 transactions per second, but because of the heavy transactions processed in the network, this parameter is around 160 TPS.
Another point is the over-reliance on Ethereum — Binance mostly relies on the Ethereum developer community and as a result BSC has seen little innovation outside of what is already available on Ethereum.
Polygon, which started out as a Binance Launchpad project named Matic in April 2019, offers a protocol for creating Ethereum-compatible blockchain networks. The Polygon Network serves as an Ethereum sidechain that offers faster speeds and lower costs. Basically, it is an Ethereum v1 clone network with the BFT Proof-of-Stake consensus.
Despite the fact that Polygon allows conducting 10 times more transactions than Ethereum and can handle up to 7,000 TPS, there is a moment with the finality of the network to consider.
Finality — the property that once a transaction is completed, there is no way to revert it.
Layer 2 solutions are directly connected to the Ethereum network and in the case of Polygon, the finality of the transaction comes thanks to checkpoints that are sent to the Ethereum network and confirmed there. This time depends on network congestion and transaction fees, so Polygon finality time can vary from 30 min to several hours.
It is important to know that Ethereum does not secure or validate the checkpoints and the Polygon does not inherit the security of L1. The PoS chain merely saves checkpoints using their EVM contract. In the event of a broken Polygon chain, the validators will resume from the last good block saved in the checkpoint, and any unsaved transactions will be uncled or discarded.
Often many people focus only on network performance and transaction costs, while finality is one of the key and important points that cannot be ignored. This is especially noticeable when the network is attacked or halted.
Solana (Neon EVM)
Solana is an innovative open-source blockchain project that aims to create a scalable, secure and highly decentralized platform for the next generation of DApps. The highlight of Solana lies in its innovative consensus and solutions, which should provide a network throughput rate of 710 thousand transactions per second. The project was founded in 2017 and after a long period of testing, the platform was launched on the mainnet in March 2020.
The Solana ecosystem is actively growing and the project is also focused on EVM compatibility. In 2021, Neon Labs, a crypto startup building an Ethereum virtual machine (EVM) on Solana, raised $40 million in a private token sale round.
Currently, Neon EVM is launched on Solana devnet with its own token and set of operators. It works by introducing incentivized Neon EVM operators to the Solana blockchain who facilitate transactions on behalf of Ethereum dApp users.
Because Solana limits the resources (instructions) allocated to a single transaction to ensure optimal hardware utilization, Neon transactions that exceed the Solana resource limit are executed in chunks split by the operators into multiple solana transactions.
Furthermore, as of today, Neon EVM does not completely support Ethereum block API, and since many Ethereum-based applications are block-oriented, this may cause major compatibility issues. For example, services that collect and scan information by blocks will have to be refactored.
The DeFi today is happily married to EVM, while Solidity has become the de-facto standard for the execution of code in the blockchain space. Creating a comparable ecosystem of smart contracts will take time and resources.
For now, EVM-compatible and EVM-based blockchains are the only candidates for decentralized projects and services striving for a large user base and rapid growth.