The Neon Proxy extends Solana’s many advantages to all existing Ethereum dApp users and developers without the need for programming conversion logic between blockchains. Instead, this work is delegated to Neon Proxy operators who facilitate the computational demands of the Neon EVM. Neon Proxy operators (we’ll refer to them as Proxy operators throughout the article) collectively host a network of servers that are responsible for packing and executing Ethereum transactions on Solana. With the Neon Proxy set to become one of the main entry points for users and dApps leveraging Solana, a robust and profitable network of operators is imperative for rapid settlement.
Responsibilities of Proxy Operators
In order to become a Proxy operator, one must set up, configure, and maintain a server to accept Ethereum-like transactions and execute them on Solana. The steps operators take to package and execute Ethereum transactions on
Solana is as follows:
- Receive requests over Web3 API protocol.
- Shape responses using Web3 API protocol.
- Pack ETH tx into Solana tx.
- Connect a proxy server to a Solana cluster RPC endpoint.
- Successfully execute transactions.
For more details, such as operator requirements and hardware recommendations, view the official documentation here.
Payments in the Neon Operator’s Economy
After a user submits a transaction to the Neon EVM, no additional steps are required to execute the instructions and store the data required for a transaction, as it will be done automatically by the operator’s software. The transaction type ultimately determines the cost of a transaction.
Key Takeaways
As depicted in the diagram above, Neon EVM program users pay in NEON for all consumed resources plus fees as decided by individual operators. Operators, however, use SOL to pay for the resources they consume. Specifically, operators pay Solana validator and governance fees in SOL. Operators pay the same amount for governance as Solana validators.
Ultimately, operators pay for two types of resources: instructions for executing (“Execute ETH instructions”) and bytes for storing data on the blockchain (“Extend storage size”). Gas amount is estimated as the cost for all resources in a transaction in lamports (lamport = 10^-9 SOL).
As outlined in our detailed Neon Proxy article, all inbound Neon transactions are automatically grouped into non-iterative or iterative transactions based primarily on their size.
Gas amount is calculated as follows:
First, calculate gas for “Execute Eth Instructions”
- 2 * 5000 * iter_count (for an iterative transaction)
- 3 * 5000 (for a non-iterative transaction)
Then, add gas for “Extend Storage Size”
- Bytes * 6960
Gas price = (1 + Operator fee) * SOL-to-NEON-rate
- Note: the operators fee is set by individual operators
Generally speaking, an operator’s net profit comes out to the difference between NEON Received minus SOL spent. This generalization, however, does not take into account hardware costs.
As a general rule, an iterative transaction is typically more expensive than a non-iterative transaction because they require more resources for executing instructions.
These four fundamental transaction types Neon Operators process:
- Contract deployment
- Contract execution
- Token transfer
- Account creation
We will post detailed explanations of all the steps and calculations involved in a Neon transaction in a future post to help illustrate the economics of different types of transactions.
Wrapping It Up
NEON tokens must be used for every transaction in Neon EVM. Users who verify and sign transactions via the Neon Proxy pay a one-time fee upfront, which is automatically distributed across the chosen proxy operator, Neon governance, and Solana validator. Individuals and/or companies who choose to configure and launch a Neon operator service will be exposed to the revenue associated with all inbound Ethereum transactions that leverage Neon EVM for faster and cheaper settlement. If this article leaves you with further questions, reach out to our team via Discord. We’ll be more than happy to help you understand how the Neon operator’s economy functions.
