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NEVM (Network Enhanced Virtual Machine)
The Network Enhanced Virtual Machine, or NEVM, represents a vital innovation in Syscoin's technology stack. It stands as a testament to Syscoin's dedication to not only creating a decentralized platform but also to addressinfg the pressing issues faced by many users of Ethereum's platform, namely, high gas fees and scalability concerns. Drawing inspiration from Ethereum's EVM, the NEVM takes the smart contract execution capabilities to the next level.
In the context of Ethereum, a virtual machine is a software-based computing environment (consisting of clients) that replicates the capabilities of a single computer but can be globally accessed. The Ethereum Virtual Machine, specifically, is the computing environment in which Ethereum transactions are carried out, defined in the Ethereum Yellow Paper and later revised through a series of Ethereum Improvement Proposals (EIPs). An EVM program is a series of these opcodes and arguments. When these programs are combined into a single block of code, the result is known as "bytecode," typically represented as a long hexadecimal string. By putting a large number of these opcodes together in a specific order, any program can be created.
The most widely used smart contract language on Ethereum (and the EVM) is Solidity. Solidity is designed to compile down to Ethereum Virtual Machine (EVM) bytecode, and it is currently the primary choice when coding smart contracts. Solidity has its problems, though, and other languages like Vyper and Scilla for coding more secure and auditable smart contracts are on the rise.
The NEVM retains the EVM's robust and flexible functionality, supporting the execution of Turing-complete smart contracts. Therefore, developers familiar with Ethereum's Solidity language can readily build and deploy their DApps on the Syscoin platform.
The primary distinguishing feature of the NEVM is its impressive scalability and high throughput.
The scalability of the EVM has an upper limit, determined by factors such as the speed of validator selection, how quickly the leader can execute state changes, the time it takes to propagate blocks globally, and how quickly other validators can validate the new block. Even with infinitely fast CPUs and unlimited RAM, the speed of light sets a physical limit to how quickly data can be propagated around the world. The ultimate scalability problem lies in block validation. To validate a block or a transaction, the full state of the entire blockchain must be known. This requires network bandwidth to download a new block, CPU to validate transactions, and RAM to maintain the full state.
The NEVM is designed to handle a larger number of transactions per second (TPS), thereby reducing the risk of network congestion and transaction delays. This enhanced scalability makes Syscoin an attractive platform for building various applications, from decentralized finance (DeFi) protocols to supply chain management systems.
NEVM's architectural design also addresses the issue of high transaction fees, often referred to as 'gas fees' in the Ethereum ecosystem. Syscoin's implementation of the NEVM will adopt a fee structure akin to Ethereum's EIP-1559 proposal, which brings about dynamic fee calculation and burning of a part of the transaction fees. In an Ethereum transaction, there is now a base fee and a tip (or priority fee). The base fee is set by the protocol and adjusts every block based on network activity. The base fee no longer goes to (at the time) miners but is instead burned. The tip is set by the market (can be zero in times of little congestion) and will go to the validators.
EIP-1559 uses a mechanism similar to Bitcoin’s PoW difficulty adjustment to automatically find a dynamic equilibrium for gas prices. EIP-1559 changed Ethereum to have 2x the current block space but only target blocks to be 50% full (as opposed to nearly 100% currently). Therefore, over time, Ethereum’s blocks and block size will, on average, remain about the same, but the extra block space allows for flexibility with regard to transaction inclusion. If blocks get >50% full, gas costs increase. If blocks are <50% full, gas costs will decrease.
Prior to EIP-1559, Ethereum used a fee auction market structure to organize transactions similar to Bitcoin, where users place bids to compete for space on the next Ethereum block. Miners in PoW generally selected the transactions with the highest bids since they stood to collect all the fees. There was a gas ceiling of 12.5 million per block, meaning some transactions would get priced out until future blocks with a lower accepted fee.
The burning of fees helps to offset the inflationary pressure from block rewards, thereby aiming to strike a balance between incentivizing network participants and maintaining the token's economic value.
This unique combination of Ethereum compatibility, improved scalability, and dynamic fee structure makes the NEVM a vital component in Syscoin's strategy to provide an enhanced decentralized platform for Web 3.0 business applications.