A beginner’s Guide to EVM-Compatible Blockchains, their Meaning, Importance, and Examples.
Ethereum remains the industry standard for blockchain-based finance applications and smart contracts. The network has the most users, developers, and DeFi applications and is enormous, stable, and decentralized.
The number of active users, developers, and protocols being built across the ecosystem continues to rise despite a significant increase in Ethereum’s gas fees. At the moment, Ethereum has the most blockchain protocols. Over 90% of the tokens are created on Ethereum and are based on it. Hundreds of millions of transactions, unique addresses, and thousands of DApps live on ETH.
The goal of Ethereum is to become the world’s decentralized computer, but getting there will be difficult. The biggest issue is that it cannot scale at this time. Scalability has been a significant problem for a long time because of the blockchain’s design, which requires each node to process every transaction on the network.
Fortunately, cheaper and faster blockchains based on the Ethereum network utilize the same underlying technology. They are primarily a code fork of Ethereum that substitutes a decentralized Byzantium Fault Tolerant or PoS consensus algorithm.
Many of these Ethereum rivals are EVM-compatible blockchains that enable users and developers to create DApps (Decentralized Applications), which are currently constrained on the Ethereum blockchain due to the prohibitively high gas fees. These networks provide faster, more capable, and more affordable services. Additionally, compared to Ethereum, the energy used for each transaction is substantially lower.
In essence, they function as a platform for smart contracts, processing transactions and other data like that of smart contracts on the Ethereum network. Similar to how they do on Ethereum, users can create DApps on these platforms. DApps are compatible with ICOs, NFTs (fungible and non-fungible), and any ERC20 token. Because of the cross-chain bridges, data can be moved back and forth between any two EVM networks.
A select few of these networks even go so far as to advance the idea of decentralized finance by providing a variety of distinctive features that set them apart, such as anonymity — a private transaction process; support for more programming languages than Ethereum, etc.
The design, functionality, and features available on Ethereum are all the same, and they can also be found on these rival blockchains, with a few exceptions.
For those who already use Ethereum, Etherscan makes it simple to comprehend and utilize, and it features a broad selection of stablecoins, including USDT, USDC, DAI, BUSD, and NFTs. These coins can be used with a wide range of DeFi applications thanks to the availability of various pegged tokens.
One of the primary factors contributing to the success of DeFi is the vast user base drawn by all these capabilities, combined with the low gas transaction costs and quick transaction speeds seen on the EVM-compatible blockchains.
Many projects have released a layer one blockchain built on an Ethereum code fork and are complete EVM compliant. The Binance Smart Chain network is an example here. The primary distinction between it and Ethereum’s Proof of Work consensus process is that ETH uses Proof of Stake.
Then there are layer one chains that are a non-Ethereum fork and are EVM compliant. Telos EVM network is an example.
Additionally, you have layer two scaling options that are EVM compatible. That uses a Proof-of-Stake consensus process as a side chain. A layer two scaling solution for Ethereum that employs side chains for off-chain processing is the Polygon (Matic) network.
Delegated Proof-of-Stake (“DPoS”) consensus algorithm is used in some networks. Stable chains support the Ethereum Virtual Machine and Proof-of-Autonomy blockchains (xDAI Chain). Several offer smart contract functionality using their own virtual machines, such as the “RSK virtual machine.”
These layer one and layer two side chains are all EVM-compatible blockchains. Compared to Ethereum, these competitors provide more capacity, lower transaction prices, and faster speeds.
What is an "EVM"?
"EVM" stands for Ethereum Virtual Machine.
Ethereum was the first programmable blockchain to become a “global computer” or an “internet computer.” So how does it manage to do that? The EVM contains the solution.
The EVM is a computing device that functions like a distributed computer made up of nodes. Each node contains a powerful virtual machine that has been sandboxed. Each full Ethereum node uses the EVM to uphold blockchain consensus.
EVM’s function is to deploy and carry out smart contracts. It mainly facilitates smart contract functionality, often implemented in languages like Solidity.
Every smart contract has a runtime environment called the Ethereum Virtual Machine. The virtual machine is Turing complete and runs programs. It is the foundation of the entire operating system for Ethereum and can add various functionalities to the blockchain. There are millions of active projects in EVM.
Thus, EVM functions as a sizable, decentralized supercomputer that can carry out any programmable job on the blockchain.
EVM documentation can be found at https://ethereum.org/en/developers/docs/evm.
We now have sufficient knowledge of EVM, so let’s examine the importance of EVM networks or EVM blockchains.
Importance of EVM-compatible blockchains
Smart contracts were initially implemented on the Ethereum network, which is still the standard among rival blockchains. However, because of its magnitude and the growing number of users, it reached a point where its scalability was a problem. With the release of Ethereum 2.0, issues like sluggish transactions and hefty gas fees are meant to be resolved.
Other permissionless blockchains soon addressed the Ethereum issues by providing reduced gas fees and faster transaction times.
Most of these blockchains have a more effective consensus method, are open-source, and are code forks of Ethereum. However, instead of coming up with a new method for creating smart contracts, developers merely imitated some aspects of the Ethereum network. In terms of time, knowledge transfer, and maybe most significantly, interoperability, this strategy proved to be more advantageous than creating a new framework from scratch.
Developers can avoid starting from scratch by establishing a space that permits code execution in a setting resembling Ethereum’s Virtual Machines. Developers can quickly create smart contracts and DApps and publish them on the blockchain.
These networks allow quicker transactions, increased capacity, and cheaper gas prices. It is also important to note that compared to Ethereum, the energy usage per transaction is substantially lower.
Cross-chain bridges are then used to make blockchains compatible with one another. With this, customers can transfer assets between any two EVM networks.
Examples of Blockchains compatible with EVM
There are many initiatives that have introduced layer-one blockchains that are EVM-compatible, but these are some of the top 6.
These side chains are all examples of EVM-compliant blockchains. Compared to Ethereum, they are faster, have lower transaction fees, and have more capacity. The finest decentralized user experience in the crypto ecosystem is ultimately what matters.