At just over 5%, the Solana blockchain ranks third in total value locked (TVL), a measure of how much value is locked in smart contracts on the chain. However, the leading Ethereum Virtual Machine (EVM) chains approach nearly 13% of TVL for all chains, and Ethereum itself represents 60% of all TVL. Solana VM seeks to turn those figures around by bringing EVM compatibility to Solana’s blockchain as a Layer 2 chain.
Layer 2 chains use the Layer 1 chain, Solana in this case, for security while enabling faster and cheaper transactions. Solana VM adds more than scalability, however. This new chain’s EVM compatibility opens the door for developers to port Ethereum’s leading decentralized apps, bringing Ethereum-like opportunities to the growing Solana community.
In this guide, we’ll look under the hood of Solana VM to learn its advantages and which challenges that may lie ahead. We’ll also learn how to buy Solana VM if you want to get in early.
What is Solana VM?
Solana VM is an EVM-compatible environment on the Solana blockchain. This means that the platform can run popular decentralized applications (dApps) available on the Ethereum blockchain and other EVM chains like BSC, Base, and Arbitrum.
It also encourages the massive developer community for EVM applications to migrate to the Solana VM. Nine out of 10 multi-chain developers work on EVM chains. Solana VM makes it easy for this army of developers to port apps to the chain or develop in a familiar environment. Project plans include support for Solidity and Vyper, two programming languages used with EVM blockchains.
Solana has some advantages over Ethereum, particularly in the areas of speed and scalability. By design, Solana uses a multi-threaded runtime environment. This allows validators to utilize all cores and execute multiple transactions at the same time. SVM uses this technology to process transactions in parallel.
The result is a real-world throughput of 1,500 transactions per second. Layer 2 networks often provide higher throughput, with Solana VM projecting between 2,000 and 5,000 TPS.
Per the Solana VM Whitepaper, the chain’s native token (SVM) will act as a fuel token on the Solana VM network. This parallels the native token function of ETH on Ethereum, AVAX on Avalanche, and SOL on Solana Mainnet. Transactions will require SVM, creating demand for the SVM token.
What Does Solana Virtual Machine Hope to Achieve?
Solana VM hopes to attract more users to the Solana ecosystem with EVM compatibility at the heart of the project. EVM compatibility brings the possibility of Ethereum’s leading apps coming to the chain, perhaps including dApps like Uniswap or forks of the Uniswap code. As importantly, the project plans support for popular EVM crypto wallets such as MetaMask.
In short, Solana VM plans to deliver an Ethereum-like experience powered by Solana, which is both faster and less expensive than Ethereum for transactions. This strategy makes it easy for Ethereum and Ethereum Layer 2 users to navigate Solana VM’s dApps. By contrast, using Solana Mainnet requires a different wallet and knowledge of a different dApp ecosystem.
Ethereum and Solana have emerged as two dominant smart contract platforms. However, the market segmentation due to incompatibility between these networks hampers growth and adoption. Solana VM aims to unite these two markets by bringing EVM compatibility and dApps to the faster and more affordable Solana ecosystem.
Despite Solana’s growing user base, dApps on Ethereum still tower over similar applications on Solana.
dApp | Category | TVL |
Lido (ETH) | Liquid Staking | $31 billion |
Jito (SOL) | Liquid Staking | $1.98 billion |
Uniswap (ETH) | Decentralized Exchange | $4.462b |
Raydium (SOL) | Decentralized Exchange | $1.129 billion |
AAVE (ETH) | Lending | $10.45 billion |
Kamino (SOL) | Lending | $1.288 billion |
However, these markets can potentially open up on Solana VM’s EVM-compatible chain, allowing trusted apps to be ported from Ethereum or other EVM chains.
Solana VM Fundamentals
Solana VM isn’t live yet, and the chain’s SVM tokens are in presale. User stats and chain metrics remain scant. Interest appears strong, though, and the official Solana VM X account has garnered an enthusiastic response from more than 18,000 followers.
Solana’s user base continues to grow as well, with wallet addresses reaching a recent all-time high of 10 million active addresses per week.
On June 21, 2024, SVM reached $2 million in presales for the SVM token. By July 25, the startup project had topped $3.5 million in presales.
As a presale, token prices move in steps, rewarding early buyers with a lower entry. As of this writing, SVM pricing is as follows:
- Current: 1 $SVM = 0.03384$
- Next Round: 1 $SVM = 0.03485$
Check the Solana VM Presale page for up-to-date pricing information.
How Does Solana VM Compare to Other Chains
Solana VM promises faster transaction speeds and lower fees than Ethereum and several other EVM-compatible blockchains.
Chain | Real-Time TPS | Max Recorded TPS | Theoretical TPS |
Solana | 756 | 7,229 | 65,000 |
Ethereum | 13.29 | 62.34 | 119 |
Solana VM | Untested | Untested | 5,000 |
BNB Smart Chain | 49.39 | 1,731 | 2,222 |
Arbitrum | 31.8 | 648 | 40,000 |
Base | 44.4 | 293 | 1,429 |
Of note, Solana VM has not yet launched, so real-time TPS cannot be measured. However, the project expects a real-world throughput ability of 2,000 to 5,000 transactions per second.
Transaction throughput becomes an essential measurement as it affects gas costs and the network’s overall performance. In 2017, the immensely popular CryptoKitties NFT game famously “broke Ethereum,” causing gas prices to skyrocket and slowing transactions to a crawl.
Gas prices themselves also create a market for Layer 2 projects like Solana VM. While Solana transaction fees typically range between $0.01 and $0.03, depending on network usage, Ethereum’s average transaction fee approaches $1, making the chain impractical for smaller transactions. Ethereum Layer 2 chains saw average transaction fees fall to $0.01 or lower following Ethereum’s Dencun upgrade. Solana VM expects average transaction costs to rival these Layer 2 chains while bringing higher throughput and potentially creating a more vibrant ecosystem.
Solana transaction volume from Messari has dramatically increased in the past year, trending with the increase in active wallet addresses detailed earlier. This means the Solana chain is seeing more users drive its growth, not just more activity from existing users.
Solana Virtual Machine Roadmap
The Solana VM project outlines an ambitious roadmap. Step 1 focused on planning, information gathering, and strategy.
Step 2 of the roadmap marked the presale launch, with additional goals such as staking still in the works. Staking, when enabled, will allow SVM holders to earn a yield on their locked tokens.
In Step 3, Solana VM plans to launch the chain and generate the tokens in a Token Generation Event (TGE) expected to occur in the third quarter of 2024. Additional milestones include exchange listings with tokens already allocated for decentralized exchange (DEX) and centralized exchange (CEX) markets.
Step 3 will also see the deployment of the chain’s first dApps, demonstrating the viability of EVM-compatible apps running in Solana VM.
Step 4 releases pre-allocated tokens to foster the ecosystem’s growth through a grant program and an incubator for new apps. The wildly successful Arbitrum Grant program followed a similar strategy, supporting key apps within the ecosystem with incentives for users and funds for development.
Audits
Step 2 of Solana VM’s roadmap included an audit from an independent security team. SolidProof completed a token audit for SVM on June 24, 2024. The audit results showed no critical, high, or medium security issues.
The remaining low-priority issues relate to the solidity version for the token and a math library. Both are marked as pending, suggesting that Solana VM can make the necessary changes to resolve these minor issues and earn a clean audit report. Of note, SVM tokens have yet to be generated for distribution, as detailed in the tokenomics section of this page.
SVM Whitepaper
The Solana VM Whitepaper provides additional detail on the project’s mechanics and the role of the SVM token itself. Similar to ETH on the Ethereum network, SVM powers transactions on the Solana Virtual Machine. Gas fees will vary depending on the exchange rate for the SOL/SVM pair. Solana VM advises that initial transactions, including account setup, will be higher than subsequent transactions, which are expected to be less than a penny for most transactions.
Solana Virtual Machine’s Whitepaper also details upcoming support for EVM wallets, including MetaMask and support for the popular WalletConnect protocol.
The protocol itself is written in Rust, the primary language used for Solana. However, it supports smart contracts authored in Solidity and Vyper, languages used for the Ethereum Virtual Machine.
Solana VM Tokenomics
Supply for SVM will be 8 billion tokens, with no ability to mint additional tokens, according to the third-party audit conducted by SolidProof.
Token allocation is as follows:
- 15% Presale / Initial Coin Offering (ICO): 1.2 billion SVM
- 15% Liquidity for centralized and decentralized exchanges: 1.2 billion SVM
- 15% Team: 1.2 billion SVM
- 15% Marketing: 1.2 billion SVM
- 10% Community Incentives: 800 million SVM
- 30% Treasury and ecosystem growth: 2.4 billion SVM
The largest allocation, 30%, will help grow the ecosystem through grants, as detailed in Step 4 of the roadmap.
However, much of the supply is locked to preserve the token’s value. For example, the team tokens unlock over a 48-month period with quarterly releases.
Notable locks from the vesting schedule are as follows:
- 20% of presale tokens will be available on token generation day. The remainder have a 5-month vesting period with monthly releases.
- Team tokens vest over 48 months using quarterly releases
- Treasury tokens vest over 36 months with monthly releases
Vesting helps promote price stability after launch and reduces price risk due to profit taking in the period immediately following the Token Generation Event.
How to Buy Solana VM
SVM purchases are supported on 11 blockchains, including Solana, Ethereum, Base, Abritrum, Polygon, and eight others. The minimum purchase is $135 or the equivalent amount in cryptocurrencies like Ethereum (ETH), Solana (SOL), US Dollar Coin (USDC), Shiba Inu (SHIB), or DAI. Supported assets eligible for purchases vary by chain.
Fiat purchases are also supported using Visa or Mastercard, with a 4% processing fee. In both cases, you’ll need to connect a compatible crypto wallet first to link your wallet address and receive your SVM tokens after the token generation.
You can also make a purchase directly by sending ETH, SHIB, USDT, or USDC from your web3 wallet directly to the contract address provided by Solana VM.
How to Buy SVM, Step-by-Step
To purchase SVM during the presale, follow these steps.
1) Navigate to Solana VM
Visit Solana VM’s official website. SVM presale tokens are only available through the official site. Solana Virtual Machine provides an easy-to-use widget for buying.
2) Connect a Compatible Wallet
To receive your tokens, you’ll need to provide a wallet address. Connect a Solana wallet like Phantom or Solflare or an EVM wallet, such as MetaMask or Rabby. Tap the connect button and choose the wallet address you’d like to use.
3) Choose Your Payment Method
SVM purchases support crypto payments, including ETH or SOL, but options vary depending on which network you choose to use. You can also purchase with Visa or Mastercard with a 4% processing fee, although you still need to provide a wallet address to receive your tokens when generated.
4) Choose a Purchase Amount
SVM presale requires a minimum purchase of $135 or the equivalent value in supported cryptocurrencies.
5) Confirm Your Purchase
Verify your order details and make a note of the wallet address you chose for the transaction. If everything is correct, complete the purchase.
Staking is coming soon. After the Token Generation Event, you can stake SVM tokens to support the blockchain’s features and earn a yield. Staking demand is also expected to aid SVM’s price stability.
Is Solana VM a Good Investment?
Solana VM offers a promising alternative to Ethereum Layer 2 chains and Ethereum itself. Token prices for SVM are challenging to predict because Solana VM is the first Layer 2 blockchain to bring EVM compatibility to the Solana blockchain. The token’s success depends on the speed at which dApps arrive, although EVM compatibility invites popular dApps to migrate with minimal coding changes.
Many well-known projects, including Solana itself, launched with a presale or venture capital token sales. The earliest buyers for SOL purchased at $0.04, providing a 4,300x return through mid-2024.
Several factors affect long-term performance, including supply. To compare similar tokens, SVM’s total supply of eight billion tokens closely mirrors the total supply for ARB, the Arbitrum Layer 2 blockchain governance token. Arbitrum reached an all-time high of $2.40 in January 2024. At press time, SVM’s presale price is just over three cents.
If Solana Virtual Machine delivers on its roadmap and reaches a similar level of adoption to chains like Arbitrum, token values could skyrocket. Strategic token-locking schedules may also help SVM hold its value as the team works to build the ecosystem. Crypto investments always come with risk, however, so it’s important to invest within your means and never invest more than you can afford to lose.
Conclusion
Solana Virtual Machine aims to bring EVM compatibility to the high-speed Solana network as a Layer 2 solution. This unique strategy allows developers to easily port successful, battle-tested apps from the Ethereum ecosystem to Solana VM.
Users benefit from cheaper transactions, faster execution, and quicker transaction finality. Solana VM will also provide a familiar interface for Ethereum users, with planned support for popular wallets like MetaMask as well as WalletConnect support.
FAQs
What is Solana VM?
Solana VM is the first EVM-compatible Layer 2 for Solana. The project will support apps built for the Ethereum Virtual Machine, allowing developers to port popular Ethereum applications to the Solana Virtual Machine.
What does the SVM token do?
SVM will be a gas token for the Solana VM network. SVM tokens will pay for transactions and may act as a paired asset in decentralized exchanges, much like SOL on Solana or ETH on Ethereum.
What is the advantage of Solana VM?
Solana VM will support Ethereum-compatible apps while providing faster and cheaper transactions compared to Ethereum.
Which wallet do I need for Solana VM?
Solana VM will be compatible with popular Ethereum wallets such as MetaMask or wallets with WalletConnect support.
Which apps are available for Solana Virtual Machine?
No apps are available yet, but Solana VM has reserved tokens to promote growth on the network and encourage developers to port existing Ethereum apps or build from the ground up.