Here’s everything you need to know about Neon EVM, a solution that will help you grow with the best from two chains.
What is Neon EVM?
Neon EVM is a first-of-kind EVM-compatibility solution for the Solana blockchain. The tool allows Ethereum-like transactions to be processed on Solana, allowing Ethereum dApp developers to leverage their knowledge of Solidity, developer tooling, and existing codebases to scale with Solana. Which lets dApps take advantage of the best features from both blockchains.
Think of Neon EVM as a portal that brings the best Ethereum solutions to Solana, and gives the community the ultimate foundation to develop, grow, and share their dApps.
Grow with Neon EVM
The blockchain industry is experiencing unprecedented growth, and the biggest factor has been the explosion of innovative products and services stemming from the Ethereum ecosystem.
Network usage reached an all-time high in 2021 when 1.65 million transactions were processed in one day.
Ethereum is the largest smart contract blockchain and has one of the most active developer and user bases, resulting in a deeply established community. The most popular blockchain wallet (MetaMask), DeFi platforms (Uniswap and Compound), developer tools (Remix and Truffle), and NFT projects (CryptoPunks and BAYC) are all built on top of Ethereum.
With this incredible growth has come growing pains in the form of high transaction fees (average Ethereum gas fees hit $63 in November 2021 and $70 in May 2021) and low throughput (around 30 transactions per second (TPS)), for which there are several projects building technical solutions to address scalability.
Enter the Solana blockchain.
Solana is a rapidly growing network that offers developers and users jaw-dropping transaction speeds at a low cost. In its current state, Solana can support a blazing 65,000 transactions per second (theoretical peak capacity) at an average rate of $0.00025 per transaction.
Furthermore, the beauty of Solana is that its performance improvements are not due to sharding. Rather than coordinating modular components such as multiple rollups and shards , Solana allows for high-speed parallel transaction processing within a single blockchain environment through 8 core innovations.
Based on current performance metrics such as TPS and average transaction costs, Solana is the market leader among smart contract blockchains, and developers are taking note. However, up until this point, it wasn’t practical for Ethereum projects to port over to Solana given that it uses a different programming language and entirely different set of developer tools. Taking all of this into account, we strongly believe that EVM-compatibility for Solana will catalyze the next era of the blockchain industry as applications go multi-chain, composability drives network effects, and user engagement migrates toward scalable technology.
This is why we built Neon EVM.
Neon EVM will give the massive ecosystem of Ethereum dApps access to Solana’s capabilities. There’s no need to rewrite any code; the applications can be copied over directly to Solana via Neon EVM. It’s so seamless that you don’t even need Solana wallets to work with Neon EVM — Ethereum wallets work just fine.
As for creating new dApps on Solana, Ethereum developers won’t need to learn Rust (Solana’s programming language) if they’re more comfortable with Solidity. Neon EVM offers a complete environment for applications to be built from the ground up with Solidity.
What’s more, Neon EVM will give projects access to the growing Solana market. Neon EVM’s extensive built-in integrations with ERC-20 and planned integrations with ERC-677 and ERC-721(NFTs!) open up the potential for Solana alternatives to many Ethereum use cases.
With a cross-chain future looking more likely each day, platforms and services that seamlessly integrate blockchains will be foundational. To enable a connected future, Neon EVM aims to reduce Solana’s barriers of entry for Ethereum-based developers.
So if you want to stay one step ahead of the game, explore the opportunities that Neon EVM will unlock for you.
The Design Behind Neon EVM
Before jumping into the Neon EVM architecture, take some time to familiarize yourself with a few key terms with our glossary.
The concept is straightforward. At its very core, Neon EVM is a smart contract on the Solana blockchain. This allows Neon EVM to receive Ethereum-like transactions and process them on Solana according to Ethereum rules.
Ethereum transactions going through Neon EVM, called Neon Transactions, are used as inputs for the targeted Neon Clients. (A Neon Client is a Solidity dApp deployed through Neon EVM). The Neon Transactions are facilitated with the help of the Neon Web3 Proxy and Neon Operators, making the experience seamless for the user.
Any tokens transferred to Neon EVM through a bridge from Ethereum are stored on Solana as SPL tokens. Tokens issued/minted by Neon Clients on Neon EVM are first wrapped into SPL tokens via an ERC-20 bridge and then stored on the Solana blockchain. All arbitrary information produced during a transaction is stored on Solana as well. What’s amazing is that any Ethereum transaction or dApp can operate in Solana using this model. No exceptions!
If the design hasn’t blown your mind yet, wait until you hear this: with the use of blockchain bridges, assets produced by Neon Clients can be transferred between the Ethereum and Solana blockchains. Neon EVM users will be able to take full advantage of Solana’s transactional advantages and have the freedom to store their assets wherever they want.
Neon EVM in Practice
A Neon EVM user looking to start using a Neon EVM Client should have an account in Neon EVM with a positive NEON balance. Meeting this requirement is extremely simple. All that’s needed is a MetaMask pointed at the Neon network. View a great configuration tutorial here.
Once MetaMask is configured, the user is able to access and interact with the Neon EVM client. To use the Neon EVM client, the user sends funds to the dApp’s contract as usual. All the logistics and associated hand-offs with the Neon Web3 Proxy and Neon operators are handled by Neon EVM. It’s that easy.
Additionally, Neon EVM users can independently deploy the Neon Web3 Proxy and execute a Neon transaction without needing Neon EVM operators. If they choose to go this route, the Neon EVM User will need to cover the transaction execution on Solana with SOL tokens manually.
Once MetaMask is configured, the user is able to access and interact with the Neon EVM client. To use the Neon EVM client, the user sends funds to the dApp’s contract as usual. All the logistics and associated hand-offs with the Neon Web3 Proxy and Neon operators are handled by Neon EVM. It’s that easy.
Additionally, Neon EVM users can independently deploy the Neon Web3 Proxy and execute a Neon transaction without needing Neon EVM operators. If they choose to go this route, the Neon EVM User will need to cover the transaction execution on Solana with SOL tokens manually.
Thinking Big with Scalability in Mind
Neon EVM will provide a fully Ethereum-compatible environment on Solana with supercharged scalability. By leveraging the parallel processing capabilities of Solana, developers can build on Neon EVM without worrying about growth bottlenecks in the near term.
As hardware processing power increases, developers can count on the blockchain’s processing capacity to rise as well. To give you an idea of the scaling capabilities of Neon EVM, an average load of 388.8 million transactions per day was placed on the testnet platform. If that doesn’t tell you to think big, nothing will.
As an additional benefit, Solana’s scalability is provided through the PoH mechanism rather than traditional sharding solutions. As the blockchain grows in use, there won’t be the added logistical complexity of managing multiple disparate chains.
At the Speed of Neon
The increased processing capacity unlocked by Neon EVM results in more than improved throughput. Recent analysis in the testnet shows for a majority of smart contract executions, Neon EVM is able to comfortably handle 4500 transactions per second and support confirmation times of less than 1 second.
To put those metrics in perspective, Ethereum can only handle around 30 TPS. Bitcoin, an average of 5 TPS. Visa, the fiat giant? An average of 2000 TPS. The results show that the speed boost provided by Neon EVM is much needed for dApps in today’s blockchain ecosystem.
The Cost of Quality
There’s a saying: “You seldom improve quality by cutting costs, but often you cut costs by improving quality!” An Ethereum dApp built on Neon EVM will enjoy not only the benefits of scalability and speed but also decreased transaction costs.
No matter how high-traffic or high-throughput the dApp experiences, once it’s loaded on Neon EVM, it will run at a much lower cost than its Ethereum counterpart, resulting in cheaper fees for both the Neon EVM User and dApp operations (deployment and maintenance). Currently, on the testnet, Neon EVM fees average around 0.000005 SOL per transaction.
When considering the cost for a Neon EVM User using a dApp on Neon EVM, there are three main figures to keep in mind:
- The fee for executing a Solana transaction, which depends on the number of signatures specified in the transaction. Remember, these transaction fees are insanely cheap!
- The fee to be paid to the Neon EVM governance body that maintains and develops Neon EVM.
- The fee to be paid to the Neon EVM operator that facilitates the transaction execution. By default, this fee is paid in NEON tokens but Neon EVM Users are allowed to propose any ERC-20 token as payment.
It looks like a lot, but rest assured, along with the added bonus of rapid Solana speed, the total transaction fees are a fraction of what it would cost to replicate the same operation in Ethereum.
Neon Governance
The Neon EVM economy is fee-based and designed to provide continued maintenance and development to the Neon EVM software. At launch, on-chain governance will be based on multi-sig from SPL governance. Like many other decentralized protocols, a clear and user-friendly process will be provided for proposing and voting on protocol improvements.
The philosophy is simple: Everyone who holds the NEON token will have a say in the exciting growth and evolution of the technology.
Projects Powering up with Neon EVM
Although currently on the testnet, there has been a lot of movement around Neon EVM. Using the newly deployed Neon EVM (testnet), Neon Labs decided to tackle a large use case test — porting the ever-popular Uniswap V2 dApp to Solana.
The use case test, dubbed NeonSwap, was supposed to be a slam-dunk showcase of the power and usability of Neon EVM; however, with any good story, the team faced some unexpected twists in the road. The NeonSwap project instead resulted in one of the greatest learning experiences for the team and culminated into an inspiring story of success, obstacles, and growth.
If you’re interested in reading more about NeonSwap and how it ultimately improved Neon EVM, an exciting piece will soon be released. Make sure to check the Neon social media channels for the article drop.
Our Vision for a Neon Future
After the initial mainnet launch of Neon EVM in January 2022, Neon Labs is planning a few key integrations with the platform to help mature the Solana development community.
The team is having ongoing partnership discussions involving some of the biggest names in crypto. If all goes well, Neon EVM will bring the best user/developer tools (wallets, bridges, oracles, and indexers) to the Solana table. Make sure to follow the Neon Labs social media channels and check in on the Neon Labs website for public announcements coming soon.
In addition to Neon EVM, the team plans to enter the Rollup market and ultimately develop a suite of solutions to support an integrated blockchain ecosystem. Exciting stuff for some exciting times!
The Neon Team
Navigate to our site and meet the Neon team. If you’re looking for a conversation or need some help, check out the Neon Labs Discord as well!
Join the Movement and Learn More
Interested in diving deeper into the Neon movement? Look no further! The following links will help the community stay up to date on all things Neon. Whether you’re interested in becoming a Neon builder or validator, need development guidance, or simply want to get more involved with the community, there’s a platform for you.
Lastly, we invite everyone to take a look at the Neon Labs GitHub to verify the transaction speeds and costs for themselves. Don’t just take it from us, see for yourself!
