The Vision Behind Neon EVM

Neon EVM is an ambitious project that aims to bring the Ethereum Virtual Machine (EVM) to the Solana blockchain. By leveraging Solana's unique parallel transaction processing capabilities, Neon EVM has become the first virtual machine of its kind capable of running Ethereum transactions in parallel. This groundbreaking achievement offers a solution to one of the most pressing issues in the blockchain space - scalability.

Andrey Falaleyev, CTO of Neon, explains the motivation behind the project: "Solana has a unique feature. It's allowed to execute transactions in parallel. It is impossible [on other chains]. And at the same time, it has a unique architecture which allows to build any type of project on Solana." This unique combination of features made Solana the ideal platform for Neon's vision of a high-performance EVM implementation.

Bridging Ethereum and Solana Ecosystems

One of the key advantages of Neon EVM is its ability to seamlessly integrate the Ethereum ecosystem with Solana's high-performance blockchain. Developers can deploy any Ethereum application on Solana using familiar Ethereum tools and frameworks. Falaleyev emphasizes this point, stating, "You can use Ethereum toolchain, Ethereum wallets, Ethereum frameworks, testing tools, everything - Truffle, OpenZeppelin, and other tools."

This compatibility ensures that developers can leverage their existing knowledge and codebase while benefiting from Solana's superior performance. It opens up new possibilities for dApp developers who can now combine features from different projects and run them on Solana with significantly improved performance.

Parallel Transaction Processing: A Game-Changer

The standout feature of Neon EVM is its ability to process Ethereum transactions in parallel. This is a significant departure from traditional EVM implementations, which process transactions sequentially. Falaleyev explains, "Right now, Neon EVM is the first virtual machine of its kind, which can run transactions in parallel. You don't have such EVMs on the market."

This parallel processing capability is made possible by Solana's unique architecture and Neon's innovative approach to state management. By splitting the Ethereum state into chunks and storing them in separate Solana accounts, Neon EVM allows multiple transactions to be processed simultaneously, dramatically increasing throughput.

Optimizing EVM for Solana

Implementing an EVM on Solana was not without its challenges. The Neon team had to overcome significant hurdles to optimize the EVM for Solana's architecture. Falaleyev recalls, "When we started, the swap of tokens in Uniswap version two took more than 20 million compute units in one transaction. It was incredible." This was problematic because it used up about half of all compute units available in a Solana block.

Through extensive optimization efforts, the team managed to reduce the compute units required for a token swap to around 600,000 - a reduction of over 97%. This level of optimization allows complex Ethereum transactions to be executed within a single Solana transaction, significantly improving efficiency and reducing costs.

Performance Benchmarks: Neon EVM vs Ethereum L2s

When it comes to performance, Neon EVM has demonstrated impressive results. In tests conducted on the Solana mainnet, Neon EVM achieved a throughput of 778 transactions per second (TPS). This is particularly noteworthy because it was achieved on a live network with other Solana programs running concurrently.

To put this in perspective, Falaleyev points out that this performance is close to the theoretical limit of all Ethereum L2s and rollups combined, which is about 880 TPS. Achieving such high performance on a live, decentralized network is a significant accomplishment and showcases the potential of Neon EVM to address scalability issues plaguing many blockchain networks.

Decentralization and Security

While many Ethereum L2 solutions struggle with decentralization, often relying on permissioned networks or single sequencers, Neon EVM is taking steps to ensure a truly decentralized system. Currently, Neon uses a whitelist of trusted operators to execute transactions, similar to many L2 solutions. However, Falaleyev reveals plans to remove this restriction soon: "Not in this release which we planned in April, but in the next which should happen in May, maybe in June. We will remove our whitelist, and our platform will become really decentralized."

This move towards full decentralization is a crucial step in Neon's evolution. It will allow anyone to execute transactions on Neon EVM without limitations, while still benefiting from the security guarantees provided by Solana's large validator network.

Interoperability with Solana Programs

One of the most exciting aspects of Neon EVM is its ability to interact with native Solana programs. This interoperability opens up new possibilities for developers, allowing them to create applications that leverage the strengths of both ecosystems.

Falaleyev explains the technical challenge of enabling this interoperability: "We have a lot of differences between Ethereum structure and Solana. We have a lot of difference how Solana checks signatures and permissions on the object on the Solana state and how it is done, how Ethereum do it." Despite these differences, the Neon team has successfully implemented a system that allows Ethereum contracts deployed on Neon to interact with Solana programs seamlessly.

This interoperability is not just a technical achievement; it's a strategic advantage. It allows developers to create applications that can tap into the liquidity and functionality of both Ethereum and Solana ecosystems, potentially leading to more innovative and powerful dApps.

State Management and Historical Data

Neon EVM takes an innovative approach to state management, adapting Ethereum's concepts to work efficiently within Solana's architecture. While Ethereum stores all data in a Merkle Patricia Trie, Neon EVM splits different types of accounts (contracts, user accounts, contract storage) into separate Solana accounts.

For historical data, which is crucial for debugging and certain types of queries, Neon EVM leverages Solana's existing infrastructure. Falaleyev explains, "We don't build this historical data inside of Solana state. It will be very expensive. It will increase the cost of our transaction. But it's not critical information for the transaction execution." Instead, Neon uses Solana's Geyser plugin to collect account changes and build an Ethereum-like API for accessing historical data.

This approach allows Neon to provide the functionality developers expect from an EVM while optimizing for Solana's unique characteristics. It's a testament to the team's ability to think creatively and leverage existing tools to solve complex problems.

Target Audience and Use Cases

Neon EVM is attracting interest from a diverse range of developers and projects. While it's designed to support any type of Ethereum application, certain use cases are particularly well-suited to Neon's strengths.

Falaleyev notes that fast-paced applications that require frequent user interactions are especially interesting for Solana-based solutions like Neon. He mentions games and fast DEXes (decentralized exchanges) as prime examples. However, he also sees potential for institutional applications, such as insurance products, to benefit from Neon's performance and cost advantages.

The ability to port existing Ethereum applications to Neon with minimal changes is also attracting attention from developers who have invested heavily in auditing and perfecting their Ethereum smart contracts. For these teams, Neon offers a way to scale their applications without the need for a complete rewrite.

Future Directions and Potential

Looking to the future, Falaleyev sees potential for Neon's technology to be used in various configurations. While the primary focus is on deploying Neon on the Solana mainnet, he also envisions scenarios where Neon could be used in private blockchain instances or as part of a rollup solution.

Falaleyev draws a parallel with Ethereum's role in the broader ecosystem: "Ethereum is a central core of rollups. Where they collect all information. I think the same will happen with Solana." In this vision, Solana could serve as a base layer for various rollup solutions, with Neon potentially playing a role in enabling EVM compatibility for these rollups.

Extending the EVM

One of the advantages of Neon's approach is the ability to rapidly iterate and extend the capabilities of the EVM. Unlike traditional blockchain nodes that require network-wide upgrades to implement new features, Neon can introduce new functionality much more quickly.

Falaleyev explains, "We are a program which can be modified very fast. You shouldn't upgrade Solana nodes in the Solana mainnet. We can bring our features independent from Solana." This flexibility allows Neon to potentially implement features that have been long discussed in the Ethereum community but have been slow to materialize due to the complexities of upgrading the core protocol.

Multi-Token Payments

An exciting feature that Neon is working on is multi-token payments. This system would allow users to pay for transaction fees using various tokens, not just the native gas token. Falaleyev describes an innovative approach using different chain IDs to implement this feature without requiring changes to the core EVM protocol.

This multi-token payment system could significantly improve the user experience by allowing people to use the tokens they already hold to pay for transactions. It also opens up new possibilities for tokenomics and incentive structures within dApps.

The Role of the NEON Token

The NEON token plays several important roles within the Neon ecosystem. Primarily, it's used to pay for transactions, but its utility extends beyond that. Falaleyev explains that the token is also used for governance, allowing holders to vote on upgrades and development directions for the EVM.

Additionally, there are plans to implement a staking mechanism for the NEON token. This would allow token holders to earn rewards by providing resources to the network. Falaleyev describes a system where operators could use staked NEON tokens to create accounts needed for transaction processing, earning fees in other tokens which would then be shared with the stakers.

Conclusion: A New Paradigm for Blockchain Scalability

Neon EVM represents a significant step forward in blockchain scalability and interoperability. By bringing the EVM to Solana and enabling parallel transaction processing, Neon has created a platform that combines the best of both worlds - Ethereum's rich ecosystem and developer tooling with Solana's high performance and low costs.

The project's achievements in optimizing the EVM for Solana, implementing parallel transaction processing, and enabling interoperability with native Solana programs are impressive technical feats. Moreover, the team's forward-thinking approach to features like multi-token payments and extensibility positions Neon as a platform to watch in the evolving blockchain landscape.

As blockchain technology continues to mature and seek solutions to scalability challenges, projects like Neon EVM demonstrate that innovative approaches can unlock new levels of performance and functionality. By bridging the gap between Ethereum and Solana, Neon is not just solving technical problems - it's opening up new possibilities for developers and users alike, potentially reshaping the future of decentralized applications.

Facts + Figures

• Neon EVM is the first virtual machine capable of running Ethereum transactions in parallel, leveraging Solana's unique architecture.
• In tests on Solana mainnet, Neon EVM achieved a throughput of 778 transactions per second (TPS).
• The team optimized token swaps from requiring over 20 million compute units to around 600,000 - a reduction of over 97%.
• Neon EVM's performance (778 TPS) is close to the theoretical limit of all Ethereum L2s and rollups combined (about 880 TPS).
• Neon plans to remove its whitelist of trusted operators in May or June, moving towards full decentralization.
• Neon uses Solana's Geyser plugin to collect account changes and build an Ethereum-like API for accessing historical data.
• The NEON token is used for transaction fees, governance, and planned staking mechanisms.
• Neon enables interoperability between Ethereum contracts and native Solana programs.
• The project allows developers to use existing Ethereum toolchains, wallets, and frameworks on Solana.
• Neon is working on a multi-token payment system that would allow users to pay for transaction fees in various tokens.

Questions Answered

What is Neon EVM?

Neon EVM is an implementation of the Ethereum Virtual Machine on the Solana blockchain. It allows developers to deploy and run Ethereum applications on Solana, benefiting from Solana's high performance and low costs while maintaining compatibility with Ethereum tools and frameworks. Neon EVM is unique in its ability to process Ethereum transactions in parallel, significantly improving throughput compared to traditional EVM implementations.

How does Neon EVM achieve parallel transaction processing?

Neon EVM achieves parallel transaction processing by splitting the Ethereum state into chunks and storing them in separate Solana accounts. This approach allows multiple transactions to be processed simultaneously if they access different parts of the state. The team has optimized the internal structures and processing of the EVM to work efficiently within Solana's architecture, enabling high throughput while maintaining compatibility with Ethereum smart contracts.

What performance improvements does Neon EVM offer compared to Ethereum L2s?

Neon EVM has demonstrated impressive performance improvements over Ethereum L2s. In tests on the Solana mainnet, Neon EVM achieved a throughput of 778 transactions per second (TPS). This is close to the theoretical limit of all Ethereum L2s and rollups combined, which is about 880 TPS. Importantly, Neon achieved this performance on a live, decentralized network with other Solana programs running concurrently, showcasing its potential for real-world scalability.

How does Neon EVM ensure decentralization and security?

Currently, Neon EVM uses a whitelist of trusted operators to execute transactions, similar to many L2 solutions. However, the team plans to remove this restriction soon, allowing anyone to execute transactions without limitations. Security is ensured by leveraging Solana's large validator network, which validates all transactions. Additionally, all transaction data is recorded in Solana's block log, providing transparency and verifiability.

Can Neon EVM interact with native Solana programs?

Yes, Neon EVM enables interoperability between Ethereum contracts deployed on Neon and native Solana programs. This allows developers to create applications that leverage the strengths of both ecosystems. The Neon team has implemented a system that bridges the different permission and state management models of Ethereum and Solana, enabling seamless interaction between the two environments.

How does Neon EVM handle historical data?

Neon EVM takes an innovative approach to handling historical data. Instead of storing all historical data on-chain, which would be expensive, Neon uses Solana's Geyser plugin to collect account changes. This data is then used to build an Ethereum-like API for accessing historical information. This approach allows Neon to provide the functionality developers expect from an EVM while optimizing for Solana's unique characteristics and keeping costs low.

What is the role of the NEON token in the ecosystem?

The NEON token plays several important roles in the Neon ecosystem. Primarily, it's used to pay for transaction fees on the network. It also serves a governance function, allowing token holders to vote on upgrades and development directions for the EVM. Additionally, there are plans to implement a staking mechanism, where NEON token holders can earn rewards by providing resources to the network, such as creating accounts needed for transaction processing.

What types of applications are best suited for Neon EVM?

While Neon EVM can support any type of Ethereum application, it's particularly well-suited for fast-paced applications that require frequent user interactions. Games and fast decentralized exchanges (DEXes) are prime examples of applications that can benefit from Neon's high performance. Additionally, institutional applications, such as insurance products, could leverage Neon's advantages. The platform is also attractive to teams with existing Ethereum applications who want to scale without completely rewriting their code.