Neon EVM: A Comprehensive Reference Guide to Solana’s Ethereum Virtual Machine Architecture

credits: https://neon-labs.org/

Neon EVM is an Ethereum Virtual Machine (EVM) implementation that is designed to run on top of the Solana blockchain. It provides a secure and scalable execution environment for smart contracts, and is fully compatible with the Ethereum network.
To ensure quick execution of a user’s transaction, it is crucial to ensure prompt finalization of the transaction. As a result, the main objective for Neon EVM developers is to focus on achieving fast finalization of transactions. Additionally, it is important to develop solutions that enable Neon EVM users to create liquid tokens and facilitate their circulation within the Solana ecosystem.

Architecture Overview

Below figure represents general view over entire architecture.

Architectural solution based on Neon EVM
credits: Neon Foundation

Neon EVM is built on top of the Solana blockchain, which provides a fast and efficient consensus mechanism for validating transactions. It consists of several components, including the following:

1. Neon EVM User: A user is an individual that interacts with the Neon EVM by sending transactions, deploying smart contracts, or interacting with existing smart contracts. Users can interact with the Neon EVM through a web3 provider, a command-line interface (CLI), or a graphical user interface (GUI). These transactions are broken down into following two types, Solana Transaction and Neon Transaction. A transaction produced according to Solana rules is S-TRX and transaction produced according to Ethereum rules is N-TRX
2. Neon EVM Client: These are software components that interact with the Solana blockchain and provide an interface for users to interact with the Neon EVM. There are several types of clients that can be used to interact with the Neon EVM, including full nodes, light clients, and wallets.
3. Neon Web3 Proxy: A proxy is a component that sits between the client and the Neon EVM and is responsible for optimizing the performance of the Neon EVM by managing transaction finalization and optimizing gas usage. While the use of a proxy is not mandatory in the Neon EVM architecture, implementing it as a distinct component can improve transaction processing speed. This is because a proxy can provide multithreading capabilities, enabling it to work in parallel. In the Neon EVM Mainnet, a proxy with multithreading support is essential for optimal performance.
4. Neon EVM Operator: Neon EVM architecture provides operators with a proxy software to perform specific functions. Operators have the flexibility to deploy multiple proxies and configure them with different settings. Additionally, a single proxy can also be configured to serve multiple operators, allowing for further customization and optimization of the network.
5. Types of proxy that are implemented on test-net are Finality Proxy and Gas Optimization Proxy.
   Finality proxies optimize transaction finalization by ensuring that transactions are included in a block as quickly as possible. This reduces transaction latency and improves the overall performance of the Neon EVM. This a proxy is responsible for converting N-trx into transactions that follow Solana’s rules. N-trx is signed by the user, whereas S-trxs are signed by the operator. When a user initiates a transaction, the proxy loads the Neon transaction data from the received S-trxs into a distinct account created in Solana. The Neon EVM then executes the transaction located at the address of this account.
   Gas optimization proxies optimize gas usage by analyzing the bytecode of a smart contract and identifying opportunities to reduce gas consumption. This reduces the cost of executing smart contracts on the Neon EVM.

Key Features

Neon EVM utilizes Ethereum’s core innovation, EVM and Solana’s exceptionally fast, secure, and relatively inexpensive blockchain network to offer following solutions:

• Low transaction fees
• High Performance
• Secure
• Ethereum Compatibility
• The ability to increase the number of nodes in the network without reducing the performance of the network as a whole.
• No need to rewrite contracts for existing dApps. Easy and smooth migration
• Unlike Ethereum, Neon EVM can be updated at any time, which means that new functionality can be added at any time and code updates can take place simply by uploading them as a new smart contract.

Conclusion

In conclusion, Neon EVM, with its high-performance consensus mechanism and low cost of execution, is a powerful tool for building decentralized applications. It provides a fast, efficient, and secure environment for executing smart contracts, and is fully compatible with the Ethereum network. Neon EVM architecture integrates seamlessly with Solana, providing developers with the flexibility to build powerful decentralized applications with minimal latency and high transaction throughput. As the demand for fast and secure decentralized applications grows, Neon EVM looks like a promising solution.