Hello everyone, I’m Paul from Coinmanlabs. Today I want to talk to you about parallel EVM.
Layer 2
Layer 2 refers to the second-layer solution built on top of the blockchain main chain, which aims to improve the performance, scalability and functionality of the blockchain. It reduces the burden on the main chain by migrating some transactions and calculations to side chains, state channels or other parallel networks outside the main chain, thereby improving the throughput and efficiency of the entire system. The following are some of the main types and technologies of Layer 2:
Sidechains: A sidechain is a blockchain that exists in parallel with the main chain and can process transactions other than those on the main chain. Users can lock assets on the main chain, then perform high-frequency transactions on the sidechain, and finally submit the results to the main chain. Sidechains can achieve higher throughput and faster transaction confirmation times while reducing the load on the main chain.
State Channels: State channels are a technology that moves transactions and state transfers off-chain, allowing participants to conduct direct peer-to-peer transactions without having to record transactions on the blockchain every time. By establishing a two-way channel between participants, fast, secure, and low-cost transactions can be achieved. Common state channel applications include the Bitcoin Lightning Network and the Raiden Network (Ethereum's state channel solution).
Plasma: Plasma is a layered design that achieves scalability by placing transactions on subchains and periodically submitting the status of the subchains to the main chain. Plasma can support more transactions and increase the throughput of the blockchain while maintaining the security of the main chain. The design of Plasma can be applied to different scenarios, such as payment, gaming, identity verification, etc.
Rollups: Rollups is a technology that compresses transaction data and submits it to the main chain in batches to reduce transaction costs and increase throughput. It stores large amounts of transaction data in a sidechain or smart contract, and then submits a summary of this data to the main chain to verify the validity of the transaction. There are two main types of Rollups: Optimistic Rollups and ZK-Rollups, which differ slightly in how they verify transactions.
The development of Layer 2 technology has brought greater flexibility, scalability and performance improvements to the blockchain system. By using Layer 2 technology, users can experience faster, cheaper and more efficient blockchain applications while reducing the burden on the main chain, laying the foundation for the large-scale application and development of blockchain.
So what problem does Layer2 mainly solve now?
The emergence of Layer 2 technology is to solve some important problems faced by blockchain systems. The main reasons for the need for Layer 2 are:
Scalability issues: Blockchain mainnets (such as Bitcoin and Ethereum) are often limited by transaction throughput and block size, resulting in transaction congestion and high transaction fees. Layer 2 technology reduces the burden on the main chain by migrating some transactions and calculations to sidechains, state channels, or other parallel networks outside the main chain, thereby improving the throughput and efficiency of the entire system.
High transaction fees: Transaction fees on the blockchain mainnet are usually determined by miner fees, which can skyrocket when the network is congested. Layer 2 technology provides a way to execute transactions on a second layer network, which can be completed faster and with lower fees.
Delay and confirmation time: The confirmation time of the blockchain mainnet is usually limited by the block generation time and confirmation depth. Layer 2 provides a faster transaction confirmation method and reduces transaction delay time.
Limitations of smart contract functionality: Smart contract functionality on the blockchain mainnet may be constrained by performance limitations and security considerations. Layer 2 provides a way to extend smart contract functionality so that more complex smart contracts can be executed on the second layer network.
In summary, the emergence of Layer 2 technology fills some important defects of the blockchain system, including scalability, transaction fees, transaction delays, and smart contract function limitations. By introducing Layer 2 technology, the blockchain system can achieve higher throughput, lower transaction fees, faster confirmation time, and richer functions, thereby promoting the development and application of blockchain technology.
What are the future trends?
Now let’s think back and think about why Layer 2 is only needed in recent years. Why wasn’t it needed before?
First, let’s recall how the capacity expansion problem was solved before the emergence of Layer2. Were different teams building a chain and adopting different consensuses to attract more users?
However, multiple chains will form isolated islands, whether in terms of information or liquidity, and IBC appeared later.
As the leader, Ethereum will certainly not sit idly by and watch its users being snatched away, so the Ethereum Foundation proposed various expansion concepts, which were subsequently developed by different teams into the current various Layer2s.
In general, with the increase in users, Ethereum’s performance, throughput or cost have reached bottlenecks, and the system’s scalability and performance need to be further improved.
Today is May 25, 2024. Let us be people from the future. Will Layer2 also encounter performance bottlenecks in the future? In order to better attract users and MAU and other data, do we all want to break through the bottleneck?
So can parallelism be the focus of attention?
Why do you think parallelism needs special attention?
First, let us tell you two points of knowledge:
Knowledge point.1 Layer 2 is based on Layer 1 security
Layer 2 is built on top of Layer 1 (main chain). Layer 1 refers to the base layer of the blockchain, such as Bitcoin, Ethereum and other main chain networks. Layer 1 is mainly responsible for processing transactions and maintaining the status of the entire blockchain network. Layer 2 is a second-layer solution built on top of the main chain by using it as the security foundation.
Knowledge point.2 EVM single thread
The current Ethereum Virtual Machine (EVM) is single-threaded, which means that it can only process one transaction or contract call at a time. This single-threaded design results in limited transaction processing speed on the Ethereum network, which is prone to congestion and high transaction fees.
From the above we can see whether the current Layer2 can greatly improve the scalability, and whether it is still hindered by Layer1 in the end.
Do we need to improve the speed of Layer 1 virtual machine?
Although the current Ethereum virtual machine is single-threaded, it does not mean that it cannot perform parallel processing. In fact, some technical means can be used to achieve parallel processing of the EVM to improve the throughput and performance of the entire system. This may involve multi-threaded processors at the hardware level, or using parallel computing technology at the software level to handle the execution of smart contracts.
Currently parallel EVM track
Monad
Project website: https://www.monad.xyz/.
Project Twitter: https://x.com/monad_xyz
Project Introduction: Monad is building a high-performance layer 1 blockchain for the next generation of decentralized applications. Monad's mission is to accelerate the disruptive power of decentralization by building a blockchain that is 100 to 1000 times faster than its closest competitor. This will alleviate serious bottlenecks in existing blockchains and enable more complex applications and wider adoption.
Project investment institutions:
What can you notice from the financing chart above? First, the financing amount is large, and second, many institutions participated in the financing. Does this indirectly indicate that most institutions are optimistic about the parallel EVM track and are willing to make a big bet to participate?
Six V2
Project official website: https://www.sei.io/.
Project Twitter: https://x.com/SeiNetwork
Sei V2 is an important upgrade of the Sei network, which aims to be the first fully parallelized EVM. This upgrade will enable Sei to have the following features:
1. Backward compatible with EVM smart contracts.
2. Optimistic parallelization.
3.SeiDB。
4. Interoperability with existing chains.
Neon
Project website: https://neonevm.org/.
Project Twitter: https://x.com/Neon_EVM
Project Introduction: Neon EVM leverages the power of the Solana blockchain to provide an efficient environment for Ethereum dApps. It runs as a smart contract within Solana, allowing developers to deploy Ethereum dApps with minimal or no code changes and benefit from Solana's advanced features. The architecture and operation of Neon EVM focuses on security, decentralization, and sustainability, providing Ethereum developers with an opportunity to seamlessly transition to the Solana environment. It leverages Solana's advantages such as low fees and high transaction speeds by enabling transactions to be executed in parallel, providing high throughput, and reducing costs.
Lumio
Project official website: https://lumio.io/
Project Introduction:
Lumio is a Layer 2 solution developed by Pontem Network that aims to solve Ethereum's scalability and bring a Web2-like experience to Web3. It stands out as a unique Rollup in the blockchain space that is able to support both EVM and Move VM used by Aptos. This dual compatibility allows Lumio to process transactions on Aptos while settling on Ethereum, providing a versatile and efficient solution for dApp developers and users. It has the following key features:
1. Dual virtual machine compatibility: Lumio uniquely supports EVM and Aptos' Move VM. This dual compatibility enables Lumio to seamlessly integrate the functions of Ethereum and Aptos, improving the flexibility and efficiency of dApp development and execution.
2. High throughput and low latency: By leveraging high-performance chains like Aptos for transaction ordering, Lumio significantly improves transaction bandwidth. This integration ensures that Lumio can efficiently handle large volumes of transactions while maintaining Ethereum’s security and liquidity characteristics.
3. Optimistic Rollup Technology: Lumio uses the open source OP stack and adopts optimistic Rollup technology. Optimistic Rollup is known for its efficient transaction processing and low cost, and is suitable for expanding Ethereum-based applications.
4. Flexible Gas Fee Economic Model: Lumio introduces an application-centric Gas fee economic model. This model allows application developers to directly benefit from network usage, which may encourage more innovative and user-friendly dApp development.
5. Interoperability and Integration: Lumio is able to process transactions on Aptos and settle on Ethereum, demonstrating a high degree of interoperability between different blockchain ecosystems. This feature enables developers to take full advantage of the strengths of Ethereum and Aptos in their applications.
6. Balance of security and scalability: Combining the strong security of Ethereum and the scalability of Aptos, it provides developers with an attractive solution to build high-performance, secure dApps. Lumio's architecture is designed to effectively balance these two key aspects.
Recommended Projects
There are so many projects listed above, and many people have told me that they are having trouble making the choices and want me to recommend some.
Then let me tell you my thoughts. First of all, Monad is definitely something that needs to be done, and secondly, Lumio.
We won’t talk about Monad, I will tell you why Lumio wants to do it:
1. First of all, they are based on the MOVE language, which is a perfect fit for blockchain.
2. They are not rolling now, and they are currently in closed beta testing. Only those who don’t roll can make money.
3. Currently, their Development Labs has developed the largest DEX on Aptos, and also has the largest number of wallet users, which is a good way to attract traffic.
4. Currently they conduct transactions on Aptos and settle on Ethereum. We all know that there is no strong DAPP in the MOVE series yet. If Lumio can be used to introduce Ethereum traffic, the official will strongly support it.
