Syscoin: NEVM Smart Contract Layer Explained

NEVM brings EVM and scalable smart contracts to the Syscoin ecosystem. This article explains what this means, the advantages of NEVM, and dives into important core changes necessary in order for our developers to implement NEVM on the Syscoin platform. It is important for the Syscoin Community, and for anyone who has an interest in Syscoin, to sufficiently understand these changes.

What are Virtual Machines?

The Ethereum Virtual Engine (EVM) offers a layer of abstraction between the smart contract code and the Ethereum network’s machine that executes it. Most Ethereum smart contracts are written in Solidity, a programming language created by Dr. Gavin Wood, one of Ethereum’s founders. EVM will also provide support for eWasm (Ethereum WebAssembly) which will enable smart contracts to be coded in various languages including C, C++, and more, which can be trans compiled and executed.

The EVM does not directly execute code. Instead, the code is compiled into opcodes when a smart contract developer is ready to deploy it. Opcodes are a collection of 141 unique instructions that the EVM employs to carry out activities depending on the coded instructions in the smart contract.

Each opcode has a fixed gas cost; however, some may also have a dynamic gas cost. The computational effort required to perform any given transaction on the Ethereum network is measured in gas, which in turn is used to calculate transaction fees in combination with the current demands, i.e. “traffic”, on the Ethereum network.

Turing-completeness refers to a computer’s capacity to tackle every solvable issue. The EVM’s 141 opcodes, meant to calculate every situation, was meant to be Turing-complete in theory. On a practical level, however, the EVM isn’t truly Turing-complete since the amount of gas available limits every computation.

Importance of Virtual Machines

The EVM is not without flaws. The most glaring example of this for the Ethereum network is that, due to design, it is not scalable. This means that as demand grows the network is unable to consistently provide reasonable transaction costs and fulfillment time. Ethereum is pursuing a proof-of-stake security system with the aim of addressing this, but it comes at a great cost; proof-of-stake is inherently less secure, and less proven (academically and in the real world) than proof-of-work.

What is Syscoin’s Network-Enhanced Virtual Machine (NEVM)?

With NEVM, Syscoin will essentially combine the strongest elements of Bitcoin (security model, merge-mined hashrate potential, UTXO efficiency and compatibility with future UTXO advancements) with Ethereum (broad usefulness of generalized computation), into a single decentralized coordinated financial computation platform. Syscoin will also improve upon both aspects. For example, on the UTXO side, chainlocks will address Bitcoin’s long-standing “selfish mining” vulnerability and harden the network against reorg impact after a chain lock is established which usually takes up to a minute after each block. On the NEVM side, we will implement zero-knowledge proofs to offer scalability and trustless interoperability for Turing-complete smart contracts. The chainlock’s mechanism gives a finality guarantee which is the desired effect of sharding and proof-of-stake on Ethereum 2.0. With finality, we can achieve better constraints for usable roll-up designs such as optimistic roll-ups, which require a waiting period of two weeks on Ethereum mainnet and can be much less on Syscoin due to new finality guarantees that chainlocks provide. On Syscoin the contracts would only have to wait hours on such designs and with the use of zero-knowledge proofs in zkRollups these withdrawal delays can be eliminated entirely.

Advantages of NEVM

  • A decentralized cost model that leads to a significantly more efficient market for gas fees
  • Sublinear, reliable, fault-tolerant blockchain with interactive data availability
  • Trustless cross-chain interoperability is generalized for easy integration with various blockchains, in a way that provides far less cost and technical overhead compared to SysEthereum v1.
  • A coordinated platform with optimal features for easy value transfer, store-of-value, and generalized computing, while retaining concern separation and scalability
  • The security of merged-mining the most reliable PoW network, tapping into most significant hashrate resource available: Bitcoin
  • Finality guarantee through chainlocks, which is based on the security of validators holding some amount of coins mined via PoW and participating in a supermajority of consensus on the current chain tip. This is free from the shortcomings of Proof-Of-Stake and especially the “nothing-at-stake”, which involves validators that are providing consensus without the backing of real sunk costs (energy, infrastructure). In the event a supermajority is not established, the chainlock mechanism resolves back down to a regular bitcoin-type policy.

Changes to Syscoin for NEVM

Change 1: Adjust the SYS mainchain blocktime in order to optimize chainlocks

Change 2: Introduce EIP-1559

EIP-1559 will burn the base gas fees spent on NEVM. A priority fee will be paid out to Bitcoin miners and other SHA-256 miners who mine NEVM. This will introduce a dynamic model; Fee burning is deflationary, while NEVM miner rewards and ongoing masternode rewards are inflationary. There will be a max inflation of roughly 1.25% a year. In reality, inflation will be lower than 1.25% due to fees being burned and that not all masternodes will have full seniority.

Benefits:

  • Subsidies for masternode owners/operators will continue indefinitely instead of being cut off when a supply cap is reached. This helps ensure Syscoin will continue to have a strong network of many full nodes into the distant future.
  • Appropriate service and appropriate fees on L1 in any condition, in part, because blocksize limits will dynamically increase beyond a baseline or decrease towards a baseline, according to real demand
  • The SYS inflation rate can range close to the projected rate of world population growth
Projected Syscoin Supply with EIP-1559

SYS Mainchain Rewards & Payouts

Masternodes

  • Base: 2.5 minutes x 23.45 = 58.62 SYS per payout
  • 1 year Seniority: 2.5 minutes x 31.66 = 79.15 SYS per payout
  • 2.5 year Seniority: 2.5 minutes x 46.9 = 117.25 SYS per payout

Miners

2.5 minutes x 7.81 SYS = 19.52 SYS per payout

The above numbers will deflate 5% each year.

Miner rewards and governance payouts reach zero on the SYS mainchain through deflation.
Masternode payouts deflate until the base payment amount reaches 5.275 SYS (10.55 with full seniority). This is done to ensure the long-term health and safety (liveness) assurances of the network of full nodes, as the subsidy winds down.

NEVM Chain Rewards

Governance Proposals & New White Paper

A new Syscoin white paper is near completion. It will include information on the above topics, NEVM, and more. Its finalization and release are pending the voting results on the proposals mentioned above.

NEVM Roadmap

Step 1: PoW Smart Contracts, Q4 2021

Step 2: Rapid Speed via ZK-Rollups, Q1 2022

Step 3: Validium, Q3 2022

NEVM is Live on our Tanenbaum Public Testnet

Follow this guide to set up Metamask

Explorer: https://tanenbaum.io
Stats: https://ethstats.tanenbaum.io/#stats
Faucet: https://ethstats.tanenbaum.io/#faucet

Join the #testnet channel in the official Syscoin Discord for more details.

About Syscoin

Syscoin Platform is a full Layer-1 and Layer-2 blockchain solution built to combine industry-proven technology to support cutting-edge applications all in one network. The project’s goal is to build a protocol that transforms the blockchain experience and combines the best of Bitcoin and Ethereum. Through Bitcoin merge-mining, Syscoin transforms Bitcoin’s Proof-of-Work security and decentralization into a functional and scalable solution.

Syscoin’s Layer-1 features include proprietary Z-DAG technology to experience near-instant network transactions, ultra-low transaction fees, taproot, and a token platform, and compatibility with Bitcoin’s emerging Layer-2 advancements. Syscoin’s token platform currently features custom notary API, Fungible Tokens, NFTs, and Fractionalized NFTs.

On the Syscoin Platform, a masternode network provides a scalable service layer and added security through ChainLocks. Building on the Syscoin Platform unlocks future access to Network Enhanced Smart Contracts (NEVM) that takes the best of Ethereum and expands its processing power to facilitate bigger and more complex programs with ultra-low fees.

Trustless Interoperability. Token & Asset Micro-Transactions. Bitcoin Core Compliant - Merge Mined.