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EVM compatibility and why it is important

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EVM compatibility and why it is important

At 3air we have taken the decision to move to a EVM compatible blockchain. Here are the takeaways why we chose EVM.

What is EVM

EVM stands for Ethereum Virtual Machine and is the core of the Ethereum network and the heart of smart contract deployment and execution. We will be talking about Ethereum here just because they are the ones that developed EVM, but all this holds true for any chain compatible with EVM to the degree of their compatibility of course.

In essence EVM is the software platform that makes it possible for developers to create programs using smart contracts, thereby creating decentralized applications. This is the place where all the chains accounts and smart contracts live.

The important part is, that EVM defines the rules of how the state of all accounts on the network can change from block to block. So, a smart contract to function must abide by the rules set out by the EVM. Users then have the ability to interact with smart contracts by sending transactions to execute certain functions defined by the contract. Smart contracts are code pre-determined rules, cannot be deleted and transactions within them cannot be reversed. They can be written in many languages, but the language of choice is Solidity.

We will leave it at this but if you want to get nerdy read more on the EVM internals here: https://ethereum.org/en/developers/docs/evm/

What is EVM compatibility?

EVM compatibility just means that the smart contract platform can process transaction based on the same code as Ethereum. Also, the tokens are actually the same just on another network as they are using the same standard (ERC20). This allows for easy bridging and interchain operability.

There will still be differences between the chains in regards to speed, transaction cost or even consensus mechanism. There can be additional functionalities built into the chain, like storage or anonymity.

Some projects have decided to just take the Ethereum code and fork it and maybe tweak it a bit. Then there are other fully EVM compatible layer ones that are non-Ethereum forks, like Telos. Then there are EVM compatible layer 2 scaling solutions like Matic network.

Why is EVM compatibility important?

The key words here are interoperability and development efficiency.

As the blockchain space evolves it is getting more and more important to be able to easily communicate with other chains and access their liquidity and functionalities. This is how new projects get access to the most users easily.

For instance, the contract for a token will be practically the same on EVM compatible chains so it is easy to bridge the token from one chain to the other. It will also be fairly easy for the user as he can use the same wallet public key (address) for managing his tokens. In many cases this will even mean that the user can literally continue using the same wallet. For instance, using Metamask, it is possible to have the same wallet address on all EVM networks and switching between them is as easy as clicking a button. This is extremely important for the user experience.

Also moving funds between chains is easy, meaning that it is easy to set up a liquidity pool even outside of the tokens main chain. This allows for trading opportunities and tapping into liquidity on other chains without additional development work.

What is also important is that you can use the same code with minimal or even no modifications and deploy it on a totally different chain. And it will work the same. This is extremely important in the event of chain malfunction or downtime or any other situation where switching chain might be desirable and warranted. It can be done instantaneously and without additional costs.

With EVM being a clear leader in the blockchain space, other chains are adopting their code and providing options to run EVM code on them. For instance, Polkadot is built on Substrate but uses Substrate EVM to allow unmodified Solidity code to be deployed on its blockchain.

Secondly there are the development resources. We need to mention 3 things here:

  1. Number of developers

  2. Ease of development (development tools, support, documentation)

  3. Learning curve

Number of developers

Looking at the 10 largest cryptocurrency system in 2021 the clear winner in active developers was Ethereum with 1,296 devs, followed by Polkadot (529), Cosmos (303), Solana (228), Bitcoin (217), NEAR (137), Cardano (118), Kusama (110), Tezos (86) and BSC (84). Out of those EVM are Ethereum,

At the current market shortage, it is important to have the biggest pool of active developers available as possible. Although it doesn’t mean that all developers on an EVM compatible chain are actually writing EVM code it does give a perspective or an idea of how many developers there are that are working on EVM compatible chains vs. others. Out of the 10 listed EVM compatible are: Ethereum, Polkadot, Cosmos, NEAR, Kusama and BSC. Every other chain is it’s own ecosystem and has its own developers.

Ease of development

Providing developers with tools, support and good documentation is essential for effective development. These usually grow with the popularity (or popularity grows with the tooling). Ethereum is here again the leader followed by Solana.

Learning curve

Some languages are harder to learn, and some are similar to each other. The same goes for programming languages. If you know Spanish, you probably won’t have a problem speaking Portuguese. Then again some are so different than English and Chinese.

So, the learning curve for languages will different for each individual but there is still a general consensus that learning Solidity EVM is far easier than Plutus.

There are also different languages you can use to use for EVM, the most popular being Solidity that is fairly close to JavaScript, a programming language most commonly used in the world with almost 70% developers using it. But you can also use other languages like Vyper that is close to Phyton another very popular coding language.

Then on the other side of the spectrum only 1.8% of developers in the world know Haskell that is used as the base for Plutus, used on Cardano and the difference to other languages is extremely big.

Taking all this into account, developing on EVM is by far the cheapest, fastest and efficient. With the ease of entry there will also be some low-quality developers but in the end, there is a big selection that will provide high quality work once the necessary DD is done.

Token listings

Because fully EVM compatible chains use the same token standard as ERC20 it is easy to list them on multiple exchanges, so much DEXes as CEXes (Centralized exchanges). Centralized exchanges in particularly like to charge higher fees for non-ERC20 compatible tokens listing, if they can list them at all. This is an additional bonus and cost cut for a crypto project trying to list their token.

With the majority of project and TVL being deployed on EVM compatible chains it has clear advantages. This is why, most new projects (and also old ones) are launching with their EVM compatible solutions.

Yet there are some disadvantages mostly connected to less innovations because of EVM rules and constrains. Non-EVM chains can utilize their own systems build from ground up focused on solving new problems and implementing new solutions. Additionally, migration of existing users elsewhere is harder.

Why we chose EVM compatible chain

The 2 main drivers of our decision have been user friendliness or at least exiting experience of users on similar chains with the same tools and ease of development. This will give us low cost and fast development that we can easily do in house. And on the other hand, we expect more user engagement with cost reductions on their additional education needs and support.

But this is just the first step in the selection of a blockchain. There are plenty of options in the EVM space and we now need to choose the one that best suits 3air and its mission.