Parallel EVM Parsing: A New Direction to Break Through Blockchain Performance Bottlenecks

Parallel EVM is a new narrative that emerges after the on-chain transaction volume reaches a certain level. It is mainly divided into two categories: monolithic blockchains and modular blockchains, with monolithic blockchains further divided into L1 and L2. Parallel L1 public chains have formed two major camps: EVM and non-EVM. Currently, the parallel EVM narrative is still in the early stages of development.

From a technical implementation perspective, the parallel EVM mainly consists of two aspects: the virtual machine and the parallel execution mechanism. In the context of blockchain, the virtual machine refers to the virtual process virtual machine for distributed state machines, used to execute smart contracts.

Parallel execution refers to fully utilizing the advantages of multi-core processors to execute multiple transactions simultaneously while ensuring that the final state is consistent with the results of serial execution. The parallel execution mechanism is mainly divided into three categories: message passing, shared memory, and strict state access lists. Among them, shared memory can be further divided into memory lock models and optimistic parallelization. Regardless of the mechanism used, it will increase technical complexity.

The parallel EVM narrative has both intrinsic driving factors for industry growth and requires practitioners to pay close attention to potential security issues. Various related projects have provided different approaches to parallel execution, sharing common technical aspects while also having their unique contributions.

Market Prospects for Parallel EVM

The parallel EVM narrative still has significant market growth potential. Currently, the total circulating market value of L1 and L2 is 752.123 billion USD, while the circulating market value of parallel Blockchains is 52.539 billion USD, accounting for only about 7%. The circulating market value of parallel EVM-related projects is 2.339 billion USD, only accounting for 4% of the circulating market value of parallel Blockchains.

From the perspective of the number of projects and the development of major tracks, the ecology of various parallel EVM L1 public chains still has significant room for growth compared to the Ethereum ecology. Tracks such as DeFi and gaming, which have high demands for execution speed, can benefit from parallel EVMs to provide a better user experience, and are expected to drive the industry into a new phase.

Main Project Analysis

Sei

Sei is a general public blockchain based on open-source technology, established in 2022. The two founders come from the University of California, Berkeley, and all team members have backgrounds from prestigious overseas institutions. Sei has raised a total of 3 rounds of funding, including $5 million in the seed round, $30 million in the first strategic round, and the amount for the second round is undisclosed.

In August 2023, the Sei mainnet went live, claiming to be the fastest L1 public chain, capable of executing 12,500 transactions per second, with finality in just 380 ms, and currently has a circulating market value of nearly $2.2 billion. The Sei ecosystem has 118 projects, mainly focused on DeFi, infrastructure, NFTs, gaming, and wallets.

Sei will launch the v2 version upgrade in the first half of 2024, introducing new features such as optimistic parallelization to enhance performance and developer friendliness.

Monad

Monad was founded in 2022 by two senior engineers from Jump Crypto, and completed a $19 million seed round of financing in February 2023. In March 2024, Paradigm is negotiating to lead a financing round of over $200 million for Monad. The project has successfully launched its internal testnet and is working towards a public testnet.

Monad is favored by capital for two main reasons: first, its strong technical background; second, its marketing prowess. The core team of 30 members has been deeply involved in high-frequency trading, kernel-driven technology, and financial technology for decades, possessing rich experience in distributed system development.

Monad is committed to becoming a high-performance smart contract platform for developers. It introduces superscalar pipelining and improved optimistic parallelism, currently achieving a performance of 10,000 TPS and a block time of 1 second.

Canto

Canto is a highly decentralized L1 project, established in 2022, entirely community-driven. Canto's vision is to become an accessible, transparent, decentralized, and free DeFi value platform. It incentivizes developers and users to join the ecosystem by providing free public infrastructure.

In March 2024, Canto announced a new round of technical iteration plans, which will introduce a parallel EVM upgrade using an optimistic parallelization mechanism. This is expected to bring better performance to Canto.

Fuel

Fuel is a modular "Ethereum rollup operating system" consisting of FuelVM, the Sway language, and related toolchains. The project was established in 2019 and plans to launch its mainnet in the third quarter of 2024. Fuel completed financing of $1.5 million and $80 million in 2021 and 2022, respectively.

Fuel adopts the UTXO data model and achieves parallel execution by identifying transaction dependencies to improve throughput. Its design philosophy is to provide a more flexible and efficient rollup solution in response to the trend of modular blockchain.

L2 Solution

L2 projects such as Neon, Eclipse, and Lumio enhance transaction execution speed by combining the capabilities of two virtual machines. Neon is the first parallel EVM project in the Solana ecosystem, Eclipse is another high-speed L2 protocol compatible with EVM within the Solana ecosystem, and Lumio combines Aptos and Ethereum to build an optimistic rollup L2 protocol.

Although these projects have not yet formed a large-scale ecosystem, they have received considerable financing and community attention. They adopt different technological routes to provide a high-performance execution environment for Ethereum applications while achieving cross-ecosystem interoperability.

Future Outlook

The parallel EVM technology is still in its early stages of development, and more L1 and L2 projects will join the competition in the future. The L1 track may form a pattern of comprehensive competition between parallel EVM and non-EVM camps, while the L2 track may develop towards blockchain virtual machine simulators or modular blockchains.

The optimization of infrastructure will bring faster speeds, lower costs, and higher efficiency, providing a better foundation for Web3 innovation. For investors, in addition to focusing on technology, it is also necessary to comprehensively consider various factors such as the project's narrative, market capitalization, and liquidity.

Currently, projects such as Neon, Monad, Canto, Eclipse, Fuel, and Lumio are still in the value discovery phase, particularly Monad, Canto, and Fuel which deserve special attention. With the maturity and application of parallel EVM technology, this field is expected to spawn new investment opportunities and business model innovations.