Neon Explained: Recommended by the Founder of Solana, It Committed to Introducing EVM into the Solana ecosystem

Project Description

(1) Basic information

In summary: Neon is an Ethereum Virtual Machine (EVM) on Solana, compatible with EVM, allowing developers to build and deploy decentralized applications (dApps) on Solana using Ethereum tools.

This marks Solana’s first integration with the EVM ecosystem, enabling its users and developers to leverage the rich Ethereum ecosystem and expand upon it on the Solana platform.

Official website screenshot

Project‘s official website：https://neonevm.org/

Official Twitter：https://twitter.com/Neon_EVM

(2) Financing situation

• On November 9, 2021, Neon announced a $40 million investment from institutions including Jump Capital and Three Arrows Capital, valuing the project at $250 million.
• On June 9, 2023, Neon conducted a public sale on the Conlist platform, selling 50,000,000 NEON tokens, which represent 5% of the total circulating supply, at a price of $0.1 per token. The total funds raised amounted to $5 million.

(3) Project team

• Marina Guryeva serves as the CEO of Neon. Previously, she served as a director of cyberFund.

• Konstantin Goldstein, who serves as Neon’s chief operating officer, was Microsoft’s chief technology evangelist.

• Andrew Falaleev serves as the chief technology officer of Neon and also served as the chief technology officer of GolosChain Core.

EVM is good but not compatible with Solana

The Ethereum Virtual Machine (EVM) is a core component in the Ethereum network and provides the execution environment for all smart contracts on Ethereum.

Ethereum virtual machine diagram

Ethereum Virtual Machine Diagram

While the Ethereum Virtual Machine (EVM) is widely used in the blockchain world, it has its limitations. Due to the sequential execution required for its smart contracts, this restricts processing speed and efficiency. For example, Ethereum’s transaction throughput is typically limited to around 1,500 transactions per second, which can lead to network congestion and high transaction fees during periods of high demand.

In comparison to traditional blockchains like Ethereum, Solana achieves higher efficiency and throughput through its unique architectural design. Its Sealevel feature supports parallel processing of smart contracts, significantly improving processing speed, ideally reaching over 50,000 transactions per second.

Although Solana boasts higher efficiency and throughput, it is not interoperable with the Ethereum ecosystem, making it challenging for Solana to inherit Ethereum Virtual Machine’s features and attract Ethereum developers.

Neon, on the other hand, introduces the Ethereum Virtual Machine to the Solana ecosystem, providing more possibilities for the Solana ecosystem.

Neon: Introducing the Ethereum Virtual Machine to the Solana Ecosystem

Neon EVM is an innovative on-chain solution that brings the functionality of the native Ethereum Virtual Machine (EVM) into the Solana network. In doing so, Neon EVM successfully combines the widespread compatibility and popularity of Ethereum with the efficiency and low cost of Solana, offering developers and users more choices and flexibility.

Furthermore, the Neon EVM makes it possible to run any Ethereum-native application on Solana without any changes to its code base, while covering all standard Ethereum tools.

This means that through Neon EVM, developers can easily and seamlessly migrate Ethereum programs to Solana. The beauty of this approach is that popular Dapps like Uniswap and Curve can be built on Solana at a lower cost. As a result, developers have the opportunity to expand their user base, reach new user groups on Solana, and benefit from Solana’s strong liquidity.

Neon’s advantages: easy adaptation, seamless connection

The advantages and characteristics of Neon can be summarized from many aspects:

• Easily adapt to smart contracts: Solana’s Sealevel system allows parallel processing of smart contracts, which not only improves efficiency but also reduces the burden of contract adaptation. On the Solana platform, smart contracts can execute simultaneously without interfering with each other, making it easier to migrate existing contracts to Neon.
• Leverage familiar smart contract language: With Neon EVM, developers can write dApps using familiar programming languages ​​such as Solidity or Vyper and deploy Ethereum dApps such as Uniswap, SushiSwap, 0x and MakerDAO.
• The first EVM on Solana: Neon is the first Ethereum Virtual Machine (EVM) compatibility layer on Solana. This is an important development as it marks the first time the Solana blockchain has integrated with Ethereum’s EVM ecosystem. Through Neon, Solana is able to support Ethereum smart contracts and dApps (decentralized applications) while maintaining its own characteristics of high throughput and low transaction fees.
• Scalability: Neon’s scalability is mainly reflected in its combination of Solana’s low gas fees and high transaction speed. The Solana network is known for its high throughput and can ideally handle over 50,000 transactions per second, a performance that far exceeds that of the traditional Ethereum network. In addition, Solana’s low gas cost is also a distinguishing feature. On the Ethereum network, transaction fees (gas fees) can sometimes spike due to network congestion, increasing costs for users and developers. In comparison, Solana’s transaction fees are generally much lower than those on Ethereum. Currently, Neon has a throughput of approximately 4,500 TPS and a gas fee of $0.000015 per transaction.
• Solana’s growing ecosystem: Another significant advantage of Neon is that it enables users and developers to directly access and take advantage of Solana’s growing ecosystem, including SOL (Solana’s native token), the native Solana asset SPL token, and other assets. This advantage reflects Neon’s important role in bridging the Ethereum and Solana ecosystems.
• Developing with previously used tools: Users can leverage familiar Ethereum-based tools (such as MetaMask, Truffle Suite, etc.), pre-built asset integrations (such as ERC-20 tokens), and access infrastructure services (such as Chainlink and TheGraph). Any client can run a proxy to deploy contracts within Solana. The interface for client interaction will be the same as running a dApp on Ethereum, providing developers with great convenience.

Neon’s Six Advantages

In addition, Neon has created a secondary trading market where operators can specify their terms and fees. Users can choose operators that meet their needs, enhancing market transparency and choice.

Specifically, in the Neon EVM architecture, operators are special accounts on the Solana blockchain that provide the necessary services to support the execution of Neon EVM transactions. They are responsible for converting user Neon transactions into Solana transactions for execution on the Solana blockchain. Operators participate in market competition by setting their own service conditions and fees, allowing users to choose operators based on these conditions. This establishes a relationship between users and operators based on service and choice, where operators provide services, and users choose operators based on their needs and costs.

Complete transaction process

For a more detailed introduction, please read the official documentation。

Overall, Neon combines the high efficiency and low cost of Solana while providing an Ethereum-compatible environment, providing developers and users with flexibility, cost-effectiveness, and decentralized solutions.

Neon’s Token Economics

NEON is the native token of Neon EVM, with a total supply of 1,000,000,000. As of writing, its market price is $0.54.

(1) Token functions

The main functions of NEON tokens are divided into practical and governance ones:

• Practical functions: The payment method for users to conduct transactions on the Neon platform (transfer, deploy dApps, interact with dApps, etc.), similar to the way ETH is used on Ethereum
• Governance function: represents voting rights in Neon DAO, used for community governance

(2) Token distribution

The distribution breakdown for NEON is as follows:

Public Sale: 5%

Early Buyers: 16.12%

Early Contributors: 1%

Advisors and Service Providers: 1.07%

Solana Capital: 6%

Founders: 15%

Ecosystem Development: 31.5%

Recent Catalysts

In July of this year, Neon took a significant step outlined in its ecosystem development roadmap: launching on the Solana mainnet. This provides Ethereum developers with the necessary tools to transition their projects to Solana, allowing them to write Ethereum applications on the Solana network. This has greatly facilitated developers on Solana.

In the past month, the Neon testnet has allowed users to pay transaction fees using tokens such as SOL, USDC, and USDT instead of the native token $NEON. This feature is expected to be officially supported on the mainnet in Q1 2024, providing Neon users with additional convenience by allowing them to pay fees with other tokens.

With the market rebounding and the continuous booming of the Solana ecosystem, we believe that more developers will choose to use Neon, leading to the creation of more ecosystem applications on Solana. Perhaps in the days to come, Neon will continue to contribute to the prosperity of the Solana ecosystem, making the statement “Solana is the Ethereum killer” more than just a mere assertion.

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