The Ethereum Virtual Machine (EVM) is the heart and soul of the Ethereum network, an open-source platform that has redefined the landscape of blockchain technology. While EVM solely serves the Ethereum network, its importance transcends its native network. Today, most blockchain networks seek to be EVM-compatible, largely because of its budding ecosystem of developers and dApps.
This article delves deep into the core concepts of the EVM, its role within the Ethereum ecosystem, and its impact on the world of blockchain and beyond.
The Ethereum Virtual Machine (EVM) is a crucial component of the Ethereum blockchain platform, serving as the runtime environment for executing smart contracts and decentralized applications (DApps). It operates as a decentralized computer that runs on the global network of Ethereum nodes. The EVM is responsible for processing and executing code written in Ethereum’s native programming language, Solidity, or other compatible languages.
At its core, the EVM is a Turing-complete, sandboxed execution environment. Turing completeness means it can theoretically perform any computation, making it a versatile platform for creating dApps. The sandboxed nature of the EVM ensures that code execution is isolated and secure, preventing malicious code from affecting the entire network. Ethereum developers compile their smart contracts into bytecode that can be executed by the EVM, and the resulting code is immutable once deployed on the blockchain.
To interact with the EVM, users, and DApps send transactions to Ethereum addresses containing executable code. These transactions trigger the EVM to execute the code, which can read from and write to the Ethereum state (the distributed ledger), enabling the creation of decentralized applications with various functionalities like decentralized finance (DeFi), non-fungible tokens (NFTs), and more.
The EVM’s decentralized and deterministic execution then ensures that all nodes on the Ethereum network reach consensus on the state changes caused by these transactions, maintaining the integrity and trustworthiness of the blockchain.
The EVM is a crucial component of the Ethereum blockchain platform, designed with several key features and functions. Its core features are explained below:
The EVM operates on a decentralized network of nodes, ensuring that no single entity or organization has control over its operations. This decentralization is at the heart of the Ethereum blockchain’s trustless and censorship-resistant nature.
When a transaction or smart contract is submitted to the Ethereum network, it is propagated to thousands of nodes worldwide. These nodes independently validate and execute the code contained in the transaction, and consensus is reached among them regarding the transaction’s validity and outcome. Decentralized execution means that no single point of failure exists in the network. It also prevents any entity from manipulating the system, as a majority of nodes must agree on the validity of transactions and smart contract results.
Smart contracts are self-executing programs that automatically enforce the terms of an agreement or perform certain actions when predefined conditions are met. The EVM is specifically designed to execute these smart contracts, which are written in high-level programming languages like Solidity. Developers compile their code into bytecode, which is the low-level language that the EVM understands.
When a smart contract is deployed on the Ethereum blockchain, it becomes immutable, meaning its code and behavior cannot be changed. The EVM enforces the logic and rules encoded in the smart contract, and its execution is publicly auditable on the blockchain.
The EVM’s Turing completeness means that it can perform any computation that can be expressed algorithmically. This characteristic sets it apart from simpler, non-Turing-complete blockchains.
Developers have significant flexibility when writing smart contracts for the EVM. They can implement complex algorithms, create DApps with intricate logic, and design a wide range of innovative blockchain solutions.
Turing completeness, however, comes with challenges. The potential for infinite loops is one such challenge. However, this is mitigated by the gas system.
To ensure efficient and fair resource allocation, the EVM employs a gas system. Gas represents the cost of computational resources required to execute a transaction or smart contract. Each EVM operation consumes a specific amount of gas, and users must pay for gas when submitting transactions. The gas price is determined by the user, and miners often prioritize transactions with higher gas prices.
The gas system serves two primary purposes: to prevent spam and abuse of the network by making resource consumption costly, and to incentivize miners and nodes to process transactions by offering them transaction fees in gas.
The EVM enforces code execution in a secure and isolated environment. Each smart contract runs in its own “sandbox,” preventing one contract from interfering with the state or behavior of others. This isolation enhances security by containing potential vulnerabilities within individual contracts. Even if one contract has a bug or is compromised, it does not affect the overall integrity of the Ethereum network or other contracts.
The EVM ensures deterministic execution, which means that given the same input and the same initial state, any node in the Ethereum network will produce the exact same result when executing a transaction or smart contract. Deterministic execution is crucial for achieving consensus across all nodes. It guarantees that all participants on the network will agree on the blockchain’s state, enhancing trust and reliability.
Immutable Code Smart contracts deployed on the Ethereum blockchain are immutable. Once a contract is deployed, its code cannot be altered or updated. Immutability is a fundamental property of blockchain-based smart contracts because it ensures that the contract’s behavior remains consistent over time. Users and DApps can trust that the contract’s rules will not change unexpectedly.
Global Computation The EVM enables global computation by harnessing the combined computing power of all participating nodes in the Ethereum network. This distributed approach ensures that code execution is redundant, fault-tolerant, and resistant to censorship. It also means that even if some nodes go offline or are compromised, the network as a whole can continue to function.
Stack-Based Execution The EVM uses a stack-based execution model. This means that data and operands are pushed onto a stack, and operations are performed by popping values from the stack. Stack-based execution is efficient and well-suited for the EVM’s resource-constrained environment, allowing for compact and predictable code execution.
Opcode System The EVM relies on an opcode system to define the specific actions that can be taken during code execution. Opcodes represent the fundamental building blocks of EVM instructions. They include arithmetic operations, data storage and retrieval, conditional statements, contract interaction, and more. Developers write smart contracts in high-level languages, which are then compiled into a series of opcodes that the EVM can understand and execute.
In summary, the EVM is a sophisticated, decentralized, and secure execution environment that underpins the Ethereum blockchain. Its features and functions enable the creation of decentralized applications with complex logic and provide the foundation for trustless, censorship-resistant, and reliable blockchain-based solutions.
The EVM is powered by the collective computing resources of the Ethereum network. It operates on a decentralized network of nodes, which are essentially individual computers or servers run by Ethereum participants. These nodes work together to execute smart contracts and process transactions on the Ethereum blockchain.
Here is a breakdown of how it works:
Nodes Participants in the Ethereum network run software that allows them to become nodes. These nodes can be miners (responsible for adding new blocks to the blockchain) or full nodes (which store and validate the entire Ethereum blockchain). Each node contains a copy of the EVM and participates in executing code on the network.
Consensus Mechanism Ethereum uses the Proof of Stake consensus mechanism. In PoS, validators (node operators) stake cryptocurrency as collateral to create new blocks and validate transactions. They are motivated to act honestly because they have a financial stake in the network.
Execution of Code When a transaction or smart contract is submitted to the Ethereum network, it is broadcast to all participating nodes. The EVM in each node processes the code contained in the transaction, reaching a consensus on the result of that code execution.
Global Computing The power of the EVM comes from the fact that it operates on a global scale, with thousands of nodes collectively executing code. This distributed approach ensures redundancy, security, and immutability of the computations, making it extremely difficult for any single entity to control or manipulate the system.
It is quite evident that the Ethereum ecosystem sits at the core of DeFi and dApps. This is evident in the thousands of dApps that are operational on the Ethereum blockchain.
Hence, it is of utmost importance that projects existing outside of the native Ethereum blockchain be EVM-compatible. EVM resonates with the core vision of the Orderly Network for DeFi, which is why we are currently in the process of expanding to the EVM.
Orderly’s expansion is primarily because the Ethereum ecosystem is the largest and most robust in DeFi; hence, we are bringing the perks of Orderly Network, such as our CLOB infrastructure and robust liquidity layer, to the EVM chain. Also, our expansion into the EVM ecosystem means Orderly Network becomes compatible with EVM chains (like Arbitrum and Optimism) which ties into our vision to deliver an omnichain CLOB infrastructure for DeFi.
This expansion would ultimately unveil all of the tools, assets, and infrastructure of Orderly Network to the broader DeFi space, thus creating enhanced options and use cases for DeFi projects in the EVM ecosystem.
The Ethereum Virtual Machine shines as a beacon of innovation among blockchains. Its ability to execute smart contracts and power dApps has reshaped industries and paved the way for a more transparent, efficient, and decentralized future. As we look ahead, the EVM remains at the forefront of blockchain evolution, driving progress and redefining our digital landscape.