Neon: Scaling Ethereum dApps on Solana - I. What problems does Ethereum have now?

harryji (78)adminYour Wizardin Harry Potter Library • last year (edited)

Neon EVM is an Ethereum Virtual Machine on Solana that allows developers to scale Ethereum dApps by using Solana as the settlement layer, thus opening up Solana’s user base to Ethereum dApps.

What is Neon EVM and what problems does it solve?

The Neon EVM protocol offers a solution to two significant challenges that Ethereum dApps face - namely transactional and ecosystem access challenges.

Problem 1: Transactional challenges
Under the current protocol, Ethereum’s throughput is limited, with a recorded maximum of 58 TPS at the time of writing, and sidechains such as Polygon recording a maximum of 470 TPS.

Furthermore, as the network gets busier, gas prices increase as transaction senders attempt to outbid each other. This causes transactions to be very slow and expensive, making Ethereum unviable for certain types of dApps.

In contrast, Solana is designed to support the massive scaling of decentralized applications, with 5,184 TPS as its maximum recorded live throughput on Mainnet. Solana provides:
- Transaction parallelization technology that optimizes resources, ensuring horizontal scalability across CPUs and SSDs;
- An optimized mempool system that speeds up throughput.
Among Solana’s innovations is its Proof-of-Stake consensus system that’s reinforced via a Proof-of-History protocol.

“Sure, but if I want faster and cheaper, I can just use a Rollup or sidechain, right?”

An Ethereum-native solution to low throughput and high gas fees is L2 scaling. L2 scaling technologies take transactions off the L1 Ethereum Mainnet and submit them in bundles. Thus far, the preferred family of L2 scaling solutions, Rollups, have indeed effectively reduced gas fees.

However, while reports claim that the reductions are up to 100x, the reductions are in practice in the region of 10x.

So, yes, you could use a Rollup or sidechain; however, Solana outcompetes such L2 solutions. For example, at the time of writing, the average transaction fee for sending ETH on the Ethereum network was ~$2. In the same period, the L2 ecosystem ranged from $0.5–0.1, i.e. 4–20x savings.

By comparison, Solana’s average transaction fees are ~0.00001 SOL ($0.0002) per transaction, i.e. 10,000x savings. Initial tests of Neon EVM demonstrate that the protocol translates these optimizations in practice, as shown by load testing.
Problem 2: Ecosystem access challenges
Because the Ethereum and Solana blockchains are completely different in design and structure, there has never been a meaningful solution that allows Ethereum dApp developers to take advantage of the transactional innovations offered by Solana.

So, just as mobile app developers once had to develop for Android and iOS to access both markets, Ethereum dApp developers have had to custom develop new versions of their dApps to access other L1 ecosystems.
As many Ethereum dApp builders are only familiar with the Solidity programming language and tooling native to Ethereum, many don’t have the ability to easily adapt their dApps to comply with Solana’s different technical and transactional requirements.

Neon EVM protocol changes this. Neon EVM brings dApp developers a robust cross-L1 blockchain development solution, allowing them to bring their dApps from Ethereum to Solana with minimal reconfiguration of the codebase. This opens up Solana’s user base to Ethereum dApps.

What are the use cases of Neon EVM?

Once the low transaction costs and fast settlement speeds become apparent to the builder community, Neon anticipate that it will see the deployment of dApps for which these properties are critical.

Neon also predict that those dApps that have enjoyed success in the Ethereum ecosystem will wish to test the response of the Solana community to their value propositions. Already, popular dApps such as Uniswap, AAV, Curve, Saddle Finance, have successfully been deployed on devnet with minimal reconfiguration of the codebase.

And this is only the beginning; we have partnered with innovators across the spectrum and expect to launch with several active DEXs, such as Moraswap, Sobal (a balancer-friendly fork for custom curves), Onomy, and Powerpool. Similarly, there are several DeFi services that will be ready at launch, such as LeverFi’s leveraged trading dApp, borrowing and lending solutions from Midas Capital and Yin Finance, launchpads from Poolz and DxSale, cross-chain swaps from Elk Finance, and not to mention GhostNFT that will be releasing an NFT collection on Neon EVM.

Source: Neon

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