Pre-emptive Strategy for the Next Narrative: The Rise of Parallel EVMs and Projects Worthy of Attention

Written by: David, TechFlow

The narrative in the crypto market always follows a cycle of cause and effect.

In recent months, as the inscriptions in the Bitcoin ecosystem have continued to erupt, capital spillover and FOMO have also led to the blossoming of inscriptions on other chains, but this has resulted in negative consequences:

Due to the excessive number and types of inscriptions, several blockchain networks including Arbitrum, Avalanche, Cronos, zkSync, and The Open Network have subsequently experienced performance overloads.

As a result of the inscription frenzy, the market has once again started to scrutinize the performance issues of EVMs.

Meanwhile, a new narrative related to optimizing EVM performance has emerged—Parallel EVM.

JD, a former co-founder of Polygon, recently expressed on social media his prediction that in 2024, every Layer 2 (L2) will rebrand itself with the "Parallel EVM" label;

Georgios, CTO of Paradigm, also believes that 2024 will be "The Year of the Parallel EVM", indicating that Paradigm is also exploring and designing relevant technologies.

Why is there such optimism about Parallel EVMs?

Apart from inscriptions exacerbating the performance burden on EVM chains, optimizing EVMs is an ongoing theme in the crypto world—new public chains, OP-based L2s, ZK-based L2s, etc..are all narratives and projects derived from optimizing EVMs, and the market values them highly.

However, these narratives are relatively mature, and related projects no longer have much room for speculation. Thus, Parallel EVM, a new method for optimizing EVM performance, easily attracts market attention during bull markets.

Returning to the concept itself, what exactly is a Parallel EVM? What are the specific implementations? And which related projects are worth early attention?

On this issue, we attempt to answer the above questions.

Parallel, More Efficient

So, what is a Parallel EVM?

Parallel EVM (Ethereum Virtual Machine) is a concept aimed at improving the existing EVM performance and efficiency.

As is well known, the EVM is the core of Ethereum, responsible for running smart contracts and processing transactions.

The current EVM design, in order to maintain network consistency and security, has a very important feature:

Transactions are executed sequentially.

Sequential execution ensures that transactions and smart contracts can be executed in a deterministic order, making it easier to manage and predict the state of the blockchain. This design choice prioritizes security and reduces the potential complexity and vulnerabilities associated with parallel execution.

However, in the face of high load, this can lead to network congestion and delays.

Imagine the original design of the EVM as vehicles on a single-lane road moving one after the other, each vehicle having to travel at the speed of the vehicle in front. If one vehicle (transaction) encounters congestion, all subsequent vehicles get stuck on the road;

Parallel EVM, on the other hand, is like expanding this single-lane road into a multi-lane highway, allowing multiple vehicles to travel simultaneously.

Technically, Parallel EVM allows different independent transactions or smart contracts to be processed at the same time, greatly increasing the EVM's processing speed and system throughput.

What are the ways to implement Parallel EVM?

We do not intend to delve deeply into technical interpretations here, but can first provide a general method of Parallel EVM processing:

• Partitioning or Sharding: Dividing transactions into partitions or groups so that they can be executed in parallel. This means different transactions can be processed simultaneously on different processing units instead of one by one. Additionally, Solana's SVM uses a similar logic.

• Optimized Algorithms: Developing new scheduling algorithms and optimization techniques to efficiently manage and execute parallel tasks while maintaining the correctness and order of transactions.

• Security and Consistency Guarantees: Implementing complex synchronization mechanisms and consistency models to ensure that even in the case of parallel processing, the entire system remains secure and data consistent.

In summary, by processing transactions in parallel, EVMs can handle more transactions at the same time, significantly increasing TPS, reducing network congestion, and improving scalability.

Currently, there are several projects on the market that are exploring the design of Parallel EVMs, but each implementation has its unique features. Next, we will introduce and inventory relevant projects.

Independents: Building Their Own L1s with Parallel EVM

Since Ethereum's EVM currently executes transactions sequentially, the most direct approach to implementing Parallel EVM is straightforward:

Abandon Ethereum and start from scratch with an independent Layer 1 to run Parallel EVM.

Representative projects: Monad and Sei.

Monad: An L1 with a Built-in Parallel EVM

Monad is a blockchain project committed to solving the scalability issues of traditional EVMs. It adopts a parallel execution strategy, is compatible with Ethereum, and aims to optimize blockchain performance by increasing transaction processing speed and system efficiency.

By implementing parallel execution, Monad aims to significantly increase transaction throughput, addressing the congestion problems of existing EVM chains under high load, with the ultimate goal of reaching the physical bandwidth limit of 400,000 TPS.

It is worth mentioning that if you search directly on Twitter with the keyword "Parallel EVM", the first project that comes up in the popular category is Monad, which also reflects the project's marketing efforts in aligning with the Parallel EVM narrative.

So, how exactly does Monad implement parallel transaction processing?

Monad's parallel execution strategy is centered on its ability to identify and parallelly execute transactions that do not have common dependencies. Although Monad and Ethereum's blocks are both linearly ordered sets of transactions, Monad allows transactions to proceed in parallel without affecting the final outcome through an optimized execution strategy. This parallel execution strategy includes the following key technologies:

• Optimistic Execution: Starting subsequent transactions before the previous transaction is completed. This method can lead to transaction dependency errors, but by tracking input-output comparisons, the system will re-execute transactions to ensure the correct execution outcome if inconsistencies are discovered.

• Scheduling and Dependencies: To reduce unnecessary re-executions, Monad predicts transaction dependencies through a static code analyzer and intelligently schedules transaction execution to optimize the efficiency of parallel execution.

• State Merging: Although transactions are executed in parallel, the states updated by each transaction ultimately need to be merged in order to maintain the block's state consistency.

In terms of financing, Monad has also performed impressively. In February of 2023, its official Twitter announced a $19 million seed round led by Dragonfly, with individual investors including well-known figures in the industry such as Cobie and Hasu.

Moreover, the project's founder is Keone Hon, the former research head at Jump Trading. As the project has not yet launched a token and considering Jump Trading's experience in trading and market making, its token performance may be worth anticipating.

(Read more: Interview with Monad Labs CEO: From Traditional to Future, the Original Jump Trading Team Explores the Role of Public Chains in On-chain Finance)

In September of 2023, Monad Labs released technical documentation for the project, which revealed that the project's native token is called MON. However, the documentation about MON was later removed, suggesting that the token might be renamed.

With significant financing, a market maker background, a new public chain, and Parallel EVM... these elements combined ensure that Monad will inevitably receive widespread attention and anticipation.

However, the actual performance of its Parallel EVM still needs to be verified with testnet data and after the mainnet goes live.

SEI: Version 2 Puts Parallel EVM on the Agenda

Sei is an open-source Layer 1 blockchain specifically designed for transaction optimization, committed to providing advanced infrastructure for various transaction applications, including DeFi, NFT markets, and gaming DEXs.

It is well known that Sei is not a new project. Its mainnet was ready in August of 2023, and the previous Version 1 already implemented features specifically for transaction optimization, such as mechanisms to prevent front-running and support for order batch processing, aimed at enhancing transaction security and efficiency.

(Read more: Sei Network: Breaking Through DEX Scalability with Layer 1 Blockchain)

In the latest Version 2 design (expected to be implemented in the first half of 2024), Sei has put Parallel EVM on the agenda.

• Optimistic Parallelization: Sei also adopts an optimistic parallelization strategy, allowing the chain to parallelly execute all transactions. When transactions touch the same state, the system tracks the storage parts touched by each transaction, and conflicting transactions are re-executed in sequence until all conflicts are resolved.

• Geth Compatibility: As part of the core Sei binary file, Sei nodes will automatically import Geth, the Go implementation of the Ethereum Virtual Machine, to handle Ethereum transactions and update any results through a special interface created by Sei for EVM.

• SeiDB Storage Optimization: Sei redesigns the storage interface, using more efficient data structures and databases to optimize read-write performance while reducing state inflation.

These technologies form the core of Sei v2, making it not only a fully parallelized EVM but also highly performant and compatible; at the same time, Sei allows seamless interaction between Cosmwasm smart contracts and EVM smart contracts, providing a diversified execution environment that further expands its scope and appeal.

From the test data provided in the documents, Sei has reached a test TPS peak of about 28,300 in the scenario of parallel transaction processing. From theoretical test values alone, the efficiency of Parallel EVM is significantly stronger than that of current L1s, and we also hope for no significant discounts when it is actually implemented.

(Read more: Detailed Technical Design of Sei v2)

In terms of token performance, SEI has seen an 80% increase in the past month, and considering the project's high market value, such a rise is already very impressive. As the Parallel EVM narrative continues, the token may still see further gains, but this is more likely a Beta benefit.

Moderates: Becoming L2s, Combining Other Chains' Capabilities with EVM

Different from the independent approach of the L1s mentioned above, some L2 projects have another solution for Parallel EVM:

Leveraging the performance of other chains or virtual machines to assist in the execution of Ethereum transactions.

Representative projects: Neon, Eclipse, Lumio.

Neon: Introducing EVM to the Solana Ecosystem as an L2

Neon EVM is the first parallelized Ethereum Virtual Machine built on the Solana blockchain, designed to improve blockchain efficiency and scalability through parallel transaction processing.

The project's most distinctive feature is its cross-ecosystem operation: it allows developers to leverage Solana's parallel execution architecture to scale Ethereum dApps and optimize network efficiency through parallel execution, increasing transaction speed and reducing costs, while maintaining compatibility with the EVM environment.

In practical implementation, Neon converts Ethereum transactions into Solana transactions and then submits them to Solana validators, who execute and update the state of the Neon program on Solana. The process can be simply understood as follows:

• Users sign transactions, which are sent to a proxy. The proxy is an account on Solana that runs an EVM emulator and is responsible for executing Neon-txn.

• The proxy requests the blockchain state from Solana and tests the launch of Neon-Txn on the Solana state.

• The proxy, based on the data received, forms new transactions (txn) according to Solana rules and sends them along with the packaged data to Solana for data processing.

• Finally, based on Ethereum rules, the transaction is sent back to Neon for signature verification. Once verified, it is executed in parallel on Solana.

In terms of token performance, NEON has seen a three-fold increase in the past month, but its total market value is significantly lower than that of SEI. Considering the revival of the Solana ecosystem and the related token frenzy, NEON, as the only parallel EVM in the Solana ecosystem, is still worth watching in the market.

Eclipse: Introducing SVM to the Ethereum Ecosystem as an L2

Faced with the performance deficiencies caused by the sequential execution of EVM, Neon's approach is to introduce EVM to Solana; but conversely, introducing SVM to Ethereum is also a similar choice.

Eclipse Mainnet is such a universal L2 solution that introduces SVM to Ethereum, combining Ethereum's settlement, Solana's virtual machine (SVM) execution, Celestia's data availability, and RISC Zero's zero-knowledge proofs among multiple technologies.

The project's goal is to provide a massively parallel execution environment that allows multiple operations to occur simultaneously, thereby improving network throughput and efficiency, and reducing congestion and transaction fees. Through this structure, Eclipse aims to enhance the scalability and user experience of dApps.

In terms of execution, Eclipse achieves parallel EVM through the Solana Virtual Machine (SVM) and its Sealevel runtime.

SVM allows different transactions to be executed in parallel, especially when these transactions do not affect overlapping states. In this way, SVM can directly scale performance as the number of hardware cores increases, thereby achieving optimized parallel execution. This design enables Eclipse to significantly increase processing speed and network throughput while reducing congestion and transaction costs.

(Read more: Podcast Notes | Dialogue with Eclipse Co-Founder: How Solana SVM Becomes an L2 for Ethereum?)

In simple terms, Eclipse's design logic is that transaction execution occurs in Solana's SVM, while transaction settlement remains on Ethereum.

In terms of project background, Eclipse completed a $15 million financing in 2022, with investors including Polychain, Polygon Ventures, Tribe Capital, Infinity Ventures Crypto, CoinList, and others.

Eclipse co-founder & CEO Neel Somani has previous experiences at Airbnb, Two Sigma, Oasis Labs, and other companies, while Chief Business Officer Vijay was previously a business development director at Uniswap and dYdX.

On December 13, Eclipse's testnet went live, and the first 1000 developers to deploy contracts on this testnet will receive commemorative NFT rewards. Since the project has not yet released a token, considering its substantial financing background, actively interacting and closely following the project's social media updates for a chance to receive airdrops is a good strategy.

Lumio: Introducing Move and Aptos to Handle Transactions as an L2

The recently released Lumio is also an L2, and its product design also has some integration with Parallel EVM.

Lumio is committed to using Aptos as an Ethereum L2, based on OP Rollup. In terms of product features, it utilizes Aptos to process transactions while Ethereum settles them.

Compared to other L2s, Lumio's official materials provide a performance comparison:

• Gas costs are 3-4 orders of magnitude lower than existing L2s ($0.1 vs $0.0006);

• TPS is 1-2 orders of magnitude higher than existing L2s (1K vs 30K);

• Suitable for enterprise-level applications with high performance and secure execution layers, a good choice for transitioning traditional Web2 applications to Web3;

• Cross-virtual machine calls between Move and EVM.

In terms of financing background, the organization behind the project, Pontem, received $4.5 million in funding led by Mechanism Capital and Kenetic Capital in 2021, and also attracted participation from institutions like Animoca and Bixin. The new Lumio L2 is said to have new financing details announced soon.

Moreover, Pontem has been focused on building Move and EVM compatible products since the time of Facebook's Libra, using Move for application development, and is one of the earliest project parties in the Aptos ecosystem.

As other public chains revive, Aptos may also be influenced by capital spillover, and Lumio, which is related to the Parallel EVM narrative, may also receive attention. At the same time, Pontem and Lumio currently have no tokens; with the upcoming launch of Lumio's testnet, active interaction may offer airdrop opportunities.

Polygon Miden: An Old L2 with a New Virtual Machine

Polygon Miden is a zk (zero-knowledge) Rollup under development, running on the Miden VM. This virtual machine is designed with a focus on zero-knowledge friendliness, prioritizing these aspects over direct EVM compatibility. As a zk Rollup, it aims to enhance transaction privacy and scalability for the Polygon network.

According to Polygon Miden's Github page, it mentions parallel transaction execution, capable of parallelly processing causally independent transactions.

How is this achieved?

Specifically, Miden achieves verifiability by changing the traditional blockchain's transparency requirements, using zero-knowledge proofs to allow users to execute smart contracts locally and create proofs, which the network can then quickly verify.

This method reduces the computational burden and allows transactions to be inherently parallelized, increasing overall processing efficiency and speed.

Meanwhile, the project's Twitter indicates that Miden is still in the development stage, and related information is scarce. However, looking at the overall design of this L2 from Polygon, which includes sidechains, zk-STARK, and SDKs, Parallel EVM is not its most important focus.

Considering that Polygon as a successful L2 has already been value-discovered, the author believes that Miden's design can only be tangentially related to the Parallel EVM narrative, but Polygon itself has not actively engaged in this narrative heat. Furthermore, the Matic token is unlikely to achieve Alpha returns, so in terms of token performance, Matic may not be fully related to the Parallel EVM narrative.

Lastly, we can also compare all the projects involved in the Parallel EVM narrative in a table, providing a reference for our readers.

As mentioned at the beginning of the article, narratives are always in rotation.

The Parallel EVM narrative is showing signs of gaining momentum, but whether it can continue to be hot depends partly on the real technological breakthroughs of different L1s and L2s; on the other hand, it is also necessary to closely monitor the movements of the project parties, accompanied by the 2024 Q1 Ethereum Cancun Upgrade optimizing Ethereum, the narrative of optimizing its performance, such as Parallel EVM, may also reach a climax.