Nitro: Solana’s VM Enters The Cosmos

The high demand for Ethereum blockspace and expensive transaction fees that ensued during the last bull run led to the rise of alternative L1s throughout 2021. Solana and its novel proof-of-history consensus mechanism was a prime beneficiary of this trend, with many users flooding into its ecosystem in favor of lower transaction fees. Ethereum was the first blockchain to support smart contracts, written in Solidity, which led to developer network effects around the EVM. Solana’s programming language is Rust, a widely known programming language, so all the success it has achieved to date is independent of the EVM’s network effects. The builders behind Solana believe Rust is a superior programming language to Solidity, and is now looking to create a standard around its Sealevel Virtual Machine (SVM). Nitro, an L2 scaling solution built on Sei, is putting this thesis to the test as it aims to bring the SVM into the Cosmos ecosystem.

Nitro allows Solana’s developer community to deploy smart contracts seamlessly into Cosmos, enabling SVM dApps to integrate with IBC connected assets. IBC stands for Inter-Blockchain Communication; an on-chain light client that allows asset and data interoperability between connected Cosmos chains. The IBC ecosystem currently consists of 50 connected chains with a total market cap of over $12B.

The Ethereum Virtual Machine (EVM) is currently the dominant Virtual Machine standard; however, the Solana and Nitro partnership has long-term implications by introducing a secondary standard built upon a high performance programming language. The introduction of Nitro will give Solana developers access to IBC connected chains. Setting the precedent of a secondary VM is also in-line with the ‘multichain future’ thesis. Their ecosystem has been hit hard by the recent FTX/Alameda blow ups, which makes the mission of creating another virtual machine standard of utmost importance if Solana wishes to capitalize on their early success.

SVM Overview:

The Solana Virtual Machine is the heart of the blockchain as it is the foundation that allows developers to write smart contracts and build dApps. The Virtual Machine is essentially a digital CPU: similar to how a CPU compiles the Java or C++ code that programmers write to bytecode (the language the computer can understand), the SVM compiles and translates Rust to bytecode to execute the smart contracts. Instead of one large-scale database or CPU that holds all of Solana’s wallets and transactions, many nodes worldwide simultaneously run the SVM. This “distributed state machine,” with around 2,000 validating nodes, keeps track of the current state of the blockchain. When a smart contract is deployed, each node receives a copy of the code, compiles it to bytecode, and shares the code with whoever calls the protocol. The SVM is the most efficient method as it functions like a physical CPU with memory and storage, but runs solely on code. However, Solana critics often point out that the hardware requirements to run a validator are too high to achieve meaningful decentralization.

Solana boasts one of the fastest transaction speeds due to the SVM’s architecture. Sealevel can process large batches as it allows parallel transactions to be processed simultaneously, increasing the number of transactions per second (TPS). Additionally, Sealevel allows for horizontal scaling with the SVM as multiple smart contracts can run in parallel without affecting one another.