“EVM” Virtual Machine
In the most general sense, a virtual machine (VM) is a software program that emulates the functionality of a physical computer. The benefit of this technology is the ability to run multiple operating systems or applications on a single physical machine (one physical system can function as many).
Virtual machines are often used in the context of cloud computing, where they can be used to create and manage virtual servers that can host websites, applications, and other online services. They are also commonly used in software development environments, where they can be used to test applications and other software on different operating systems and hardware configurations without the need for multiple physical machines.
In the context of blockchain technology, virtual machines are used to execute smart contracts and other code that runs on the blockchain. For example, the most most famous virtual machine , the Ethereum Virtual Machine (EVM) is used to execute smart contracts on the Ethereum blockchain. Similarly, the Binance Virtual Machine (BVM) is a virtual machine that is used to execute code on the Binance Smart Chain (BSC) blockchain.
Overall, virtual machines are an important tool in the field of computing and are used for a wide range of purposes, including cloud computing, software development, and executing code on blockchain platforms.
EVM
The Ethereum Virtual Machine (EVM) is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. This enables developers to create markets, store registries of debts, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middleman or counterparty risk.
The EVM is a 256-bit virtual machine that executes code in a stack-based manner. It is designed to be simple, stack-based, and deterministic, making it easy to verify and easy to run on many different kinds of hardware. It is also designed to be as lightweight as possible, so it can run on devices with limited resources, such as smartphones.
One of the key features of the EVM is its ability to execute smart contracts. A smart contract is a piece of code that is stored on the blockchain and can be executed by the EVM. Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein are accessible to all, and the contracts are enforced by the network itself.
Smart contracts allow for the automation of processes and the creation of decentralized applications (DApps). DApps are applications that run on a decentralized network, such as the Ethereum blockchain, rather than on a single centralized server. This means that DApps are not controlled by any single entity, and are resistant to censorship.
The EVM is an important part of the Ethereum ecosystem, as it allows developers to create and deploy smart contracts and DApps on the Ethereum blockchain. It has opened up new possibilities for the automation of processes and the creation of decentralized systems, and has contributed to the growth of the Ethereum network and the development of the larger blockchain industry.
EVM Compatible?
Being EVM compatible means that a platform or application is able to execute smart contracts and run decentralized applications (DApps) that have been developed for the Ethereum Virtual Machine (EVM). This means that the platform or application is able to understand and execute the code written in the Solidity programming language, which is used to develop smart contracts and DApps for the EVM.
There are several platforms and applications that are EVM compatible, including Ethereum itself, as well as other blockchain platforms. These platforms offer their own unique features and capabilities, but they are all able to run EVM-based smart contracts and DApps.
Popular EVM Compatible Chains:
Avalanche,
Binance Smart Chain,
Polygon,
Solana,
Harmony and
Fantom
Celo
Being EVM compatible is important for developers who want to build and deploy their smart contracts and DApps on a particular platform. It allows them to use the Solidity programming language and the EVM to build their applications, and ensures that their applications will be compatible with and able to run on the platform. It also allows users to access and interact with these applications, as they will be able to use their wallets and other tools to interact with the smart contracts and DApps running on the platform.
Benefits of Being EVM Compatible:
EVM compatibility has allowed several popular Layer 1 blockchains, such as Avalanche, Binance Smart Chain, Polygon, Solana, Harmony, and Fantom, to thrive by making it easier for developers to deploy smart contracts on these new chains. This is because the EVM converts different types of smart contract code into a standard format called bytecode, which is readable by the Ethereum network. This means that developers can easily deploy the same code on Ethereum, Avalanche, or Polygon without the need for costly and time-consuming smart contract audits.
This "plug and play" feature significantly increases the potential for emerging blockchains to attract developers to their ecosystem by reducing the time it takes to launch new DApps and gain market share within a brand new network. For example, Avalanche and DeFi apps such as TraderJoe and Benqi-Finance quickly emerged on the network due to the ability to replicate the automated market maker functionality of Uniswap's DEX and the smart contract lending functionality of Aave.
From a user's perspective, there is a strong incentive to adopt new EVM-compatible chains because they allow users to be the first to test newly launched DApps, which can result in rewards such as airdrops (some of which have been worth six figures). Additionally, new blockchains and DeFi protocols often offer higher returns on capital deployed to staking or liquidity pools, which further encourages users to purchase the network's tokens.
EVM compatibility is also crucial for creating cross-chain bridges that enable the seamless transfer of funds from one network to another. The success of Binance Smart Chain, for instance, was largely due to the ease with which Ethereum users could transfer their ETH to the new chain using the Binance bridge. Later, similar bridges, like the Avalanche bridge and SpookySwap's bridge on Fantom, were created based on the same EVM compatibility.
Just as a city needs bridges to direct traffic in and out and benefit from the movement of people and capital, blockchain networks need a certain level of interoperability with other blockchains to benefit from network effects.
Downsides of Being EVM Compatible:
EVM-based networks, such as Ethereum and Polygon, can experience rising gas fees during times of network congestion. This is because the Ethereum network operates on a "fee market" system, in which an increase in demand for block space leads to an increase in the gas fees that must be paid to miners in order to get a transaction confirmed in the next block.
To address the issue of high gas fees, Polygon uses layer 2 scaling solutions like Optimistic and ZK-Roll Ups. These solutions allow transactions on Polygon to be executed "off chain" through payment channels or independent blockchains with a smaller group of validators, and then bundled together as one large transaction that is confirmed on the Ethereum network. This allows the Polygon EVM to execute smart contracts and enable users to transact more frequently while saving on gas fees.
However, in order to increase scalability and reduce the cost of gas fees, Polygon must sacrifice some decentralization, which can make its network less secure. Ultimately, the trade-off between scalability and security is something that all blockchain networks must consider when implementing solutions to address issues such as high gas fees.
