Neon EVM is an Ethereum virtual machine (EVM) on Solana, enabling decentralized application (dApp) developers to use Ethereum tooling to scale and get access to liquidity on Solana. This definition is according to NeonLabs, a leading blockchain developer and creator of Neon EVM, which launched on the Solana Mainnet in July 2023.
In general, an EVM is a software platform developers can use to create dApps and execute and deploy smart contracts on the Ethereum network. Ethereum is still the dominant smart contract platform, and now the Neon EVM bridges the gap between Ethereum and Solana.
Neon EVM enables the deployment of EVM code on the Solana blockchain. Ethereum-like transactions can now be processed on Solana, taking advantage of Solana’s superior technical functionalities, such as parallel execution of transactions. This combination ultimately results in higher throughput and reduction of operational costs. Neon EVM essentially is a smart contract built on the Solana blockchain to process wrapped Ethereum transactions.
How Can Neon EVM Change the Crypto Market?
Before the launch of Neon EVM, ensuring cost-efficiency for EVM dApps was only possible through rollups or sidechains. Neon EVM represents a layer-2 (L2) solution, which can reduce costs significantly. To better understand this benefit, one must consider that the average fee per transaction on Ethereum is approximately $2. Most L2 solutions reduce the cost to $0.5-$0.1 per transaction. In contrast, the average transaction fee on Solana is around 0.00001 SOL, equivalent to $0.0002, 10,000 times saving.
Conclusion
There has been much excitement surrounding the launch of Neon EVM. The development team is still conducting tests. So far, the real-world performance and efficiency of the Neon EVM have been proven satisfactory. The Neon Decentralized Autonomous Organization (DAO) has been created to guide the direction and strategies of this project.
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Disclaimer
Please keep in mind that the above information is based exclusively on our observations and is provided for informational purposes only. It doesn’t constitute any kind of financial advice nor represents an official forecast. Cryptocurrency is a highly volatile asset, and you are investing in it at your own risk.
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