Why Are We Building the SVM L2 Stack for Gaming Apps?

Do not index

Solana has recently gained significant attention as a highly scalable and performant blockchain capable of processing thousands of transactions per second (TPS) with extremely low fees. One of the key technologies powering it is the highly performant execution environment, SVM (Solana Virtual Machine), which is arguably one of the first parallelized virtual machines to work at scale. We at Sonic firmly believe in the power of SVM and anticipate that its significant network effects will lead to an extensive network of L2s and Rollups.

Sonic is the first atomic SVM chain built to enable sovereign game economies on Solana. Sonic enables sovereign game economies that roll up and settle on Solana.

Why SVM and Solana?

The Solana Virtual Machine (SVM) is the execution environment that processes transactions and smart contracts on the Solana network. It defines the specific rules for changing the state of the network. When a transaction is submitted, the SVM processes it and manages the state of the blockchain affected by the transaction. The SVM converts the smart contract code into a format executable by the validators' hardware.

On Solana, the main languages for writing smart contracts are Rust, C, Solidity, and C++ (with Move coming soon). These are compiled into BPF bytecode by the SVM, allowing transactions to be interpreted and executed efficiently by validator nodes. Validators run their own isolated environments or SVM instances to maintain consensus across the network. Think of these validators as “mini-computers” that perform the necessary operations to update the state of the Solana network based on the instructions provided by transactions.

Benefits of SVM:

Separation of State and Logic – SVM differs from EVM by separating state (accounts, that store data) and logic (programs or smart contracts) in the Solana Account Model. Transactions on Solana require explicit specification of the data they will read and modify before execution in the SVM. This allows programs that do not interact with the same data to run in parallel, contrasting with the single-threaded (EVM) vs. multi-threaded (SVM) runtime environment.

Localized Fee Markets – Solana has localized fee markets, enabling fees to be assigned per local smart contract. In contrast, EVM relies on global fee markets, meaning unrelated transactions, like an NFT mint and a swap, can congest the network by affecting each other.

These features, combined with SVM’s parallel processing, allow Solana to achieve significantly higher TPS, resulting in faster transaction speeds and very low fees compared to EVM. Additionally, the development of Firedancer, an independent, C++-based validator client, has the potential to improve transaction speeds to over 1 million TPS in a testing environment and enhance the network's defensibility. Technically, Firedancer is being developed layer by layer, following the data path from packet admission, runtime, and consensus to make Solana faster and more robust. Overall, Firedancer will improve network efficiency, increase scalability, reduce the cost of running a validator node, and decentralize the network further, establishing SVM as a technically superior VM.

Network Effects of Solana:

While the network effects of EVM are widely discussed, we believe the network effects of Solana are understated and rapidly developing:

According to the Electric Capital Report, 3,300 active developers were building on Solana as of Q4 2023. It is already the top non-EVM chain for new developers.

Solana DEXs have surpassed Ethereum on some days while maintaining a sizable TVL of $10 billion (including liquid staking). Solana DEXs processed more than $60 billion in March 2024 alone. With SOL as an asset having a market cap of over $80 billion, it has significant economic security.

More than $3 billion in stablecoins are issued on Solana, with a transfer volume of over $2.4 trillion in stablecoins in May 2024.

DEX frontends like Jupiter have cumulatively processed over $150 billion in volume, and Phantom has more than 7 million monthly users.

Big brands like PayPal, Visa, Shopify, and Stripe are building on Solana.

Solana has the highest number of active wallets, with daily active wallets consistently clocking between 1-2 million, and more than half a million tokens launched in just one month.

All this positions SVM as a next-gen blockchain environment, far more efficient and performant. As more developers recognize this, we will see greater adoption of the SVM as an execution environment, with an emerging ecosystem of SVM rollups taking shape.

The Emerging Ecosystem of SVM Infrastructure

Given the developing network effects of SVM, we are now witnessing the growth of an ecosystem of SVM infrastructure.

Anza, a spinoff entity from Solana Labs, has already unveiled their plans to make SVM modular. This means the transaction processing pipeline will be extracted from the current Solana validator client, into core executable components, enabling developers to run diverse implementations of SVM on any validator. This is in line with Solana’s vision for client diversity at the validator level. This will enable developers to run the implementation of SVM and operate independently of any validator.

As Anza’s Joe C notes, “Having a decoupled SVM with its own well-defined interface unlocks the ability for teams to build custom SVM implementations, including SVM rollups, SVM sidechains, and SVM-based off-chain services. Solutions like these can make Solana more performant and more reliable, as well as expand the landscape of possible products and services that can be built within its ecosystem.”

There is a range of infrastructure being built for SVM in general, including multi-sigs like Squads, wallets like Nightly, and SOL restaking players like Cambrian, Picasso, Jito Stakenet, and Solayer.

Why does Solana Need Rollups?

While Solana Mainnet is highly performant, some applications may prefer to have their own rollups for several reasons:

More Value Capture: Applications like games find it challenging to internalize value on a shared Solana layer not designed with just one application in mind. By having their own rollup, they can customize their fees as part of their business model.

Customizability for Use-Cases: Specific applications may require custom features such as:

Privacy

Instant settlements

Asset transfer rules and compliance

and so on.

TPS Needs for Gaming: Although Solana offers significant performance advantages compared to Ethereum, it faces challenges from a large number of small games or a single large game, especially Fully On-Chain Games (FOCG). In these cases, hundreds of thousands or even millions of users' on-chain interactions can severely impact the main chain performance of Solana L1. This is particularly true during special operational activities (such as server launches, holiday events, flash sales, etc.), where the instantaneous impact can be substantial. This not only affects the performance of the entire Solana L1 chain but also the playability and user experience of each game, including game response speed and data availability. Poor user experience can be fatal for any game.

Furthermore, not all applications require mainnet composability, particularly games, which can function well as their own rollup.

Existing Solana Rollups:

Contrary to popular belief, Solana already has several applications that have been built or are currently being developed as rollups.

A few of them are:

GetCode: A payments app with a micropayments SDK that enables instant payments and employs a pseudo-rollup for its application. It creates intents for all transactions and uses a rollup-like sequencer, which settles on Solana after N intervals. This rollup-like structure provides:

Flexibility: Intents can represent various future activities, not just payment transactions. Additionally, Solana as a chain can be replaced if necessary.
Instant and Private: With the soft finality of the sequencer, payments are instant even during Solana congestion. While transactions are visible on-chain, the exact value and intent remain obscured, ensuring user privacy.

Grass: A DePIN project aimed at solving AI data problems through verified scraping. When Grass nodes scrape the web for AI training data, validators store the data on-chain, tracking its origin and rewarding the responsible nodes proportionately. Grass requires 1 million web requests per second, which is unfeasible on the Solana mainnet. Therefore, they plan to create ZK proofs of the origin data for all datasets and batch them for settlement on Solana L1. They are considering using state compression from another cluster and settling roots on the mainnet-beta.

Zeta: One of the oldest perpetual DEXs on Solana, which previously had a fully on-chain perpetual order book, plans to move its matching off-chain via a Solana rollup. Zeta is building ZX, where settlement and consensus (data availability) will exist on the native Solana L1, while execution will be handled by an off-chain zkVM-compatible matching engine.

Sphere: One of the largest payment companies on Solana has hinted at possibly building a payments L2 on Solana.

Additionally, Solana has appchains (SVM forks) such as:

Pyth: A leading oracle using the chain as a computational base layer for processing and aggregating data provided by Pyth’s network of data publishers.

Cube: A hybrid CEX using the chain for settling trades.

These examples highlight the importance of SVM as a highly performant layer.

Enter Sonic – The Atomic SVM Chain

To enable games and apps to launch their roll-ups that settle on Solana, Sonic is building the first atomic SVM chain.

Sonic is built on top of HyperGrid, the first concurrent scaling framework for Solana. Sonic is the inaugural instance of a Grid orchestrated by this framework.

HyperGrid is designed to introduce customizability and scalability while remaining natively composable with Solana.

What Makes Sonic Different?

Sonic stands out with its focus on atomic interoperability and gaming applications. The key differentiator is HyperGrid, the Shared Sequencer Network. HyperGrid's architecture employs a multi-grid approach, where each grid operates semi-autonomously while remaining anchored to the Solana mainnet for consensus and finality. This design ensures atomic interoperability for transactions. Benefits for HyperGrid include:

Horizontal Scaling: By utilizing concurrent merklelized state compression and BFT (Byzantine Fault Tolerance) consensus, HyperGrid aims to achieve a controlled aggregated transaction settlement of 12,000,000 TPS to the base layer by parallelizing execution. HyperGrid aims to achieve potentially infinite transaction throughput through horizontal scaling across multiple grids. This approximation is under the assumption that HyperGrid transactions ideally consume 100% of throughput on Solana L1.

Game-Specific Transactional Framework: Sonic’s transactional model is specifically designed to meet the needs of gaming, enabling high-frequency, low-latency interactions that are essential for in-game events, player actions, and state updates. HyperGrid will also feature an integrated verifiable random function (VRF) for on-chain randomness and NFT support from Metaplex, significantly reducing the minting costs of game-produced NFTs. Sonic offers native composable gaming primitives and extensible data types based on the ECS framework directly on-chain.

Why Choose Sonic?

Lightning Speed at Low Cost: Sonic offers an exceptionally fast on-chain game experience, powered by SVM, at minimal cost.

Atomic Interoperability: Execute transactions on Sonic without redeploying your Solana programs and accounts, benefiting from Solana's base layer services and liquidity.

Write for EVM, Execute on SVM: Seamlessly deploy dApps from EVM chains to Solana via HyperGrid's interpreter.

Composable Gaming Primitives & Sandbox Environment: Sonic provides native composable gaming primitives and extensible data types based on the ECS framework on-chain, along with sandbox utilities for developers to build their business logic.

Monetization Infrastructure: Sonic includes native infrastructure for growth, traffic, payment, and settlement for games.

While Sonic is highly focused on gaming, it can be any application, be it DePIN or DeFi.

Sonic — Expanding the SVM

We believe Sonic will serve as critical infrastructure, significantly benefiting the Solana Ecosystem.

Onboarding More Games: Sonic's developer tooling will enable seamless game launches, bringing more games to the Solana Ecosystem. While previous games faced scalability and tooling concerns, Sonic allows easier game launches with settlement on Solana.

Liquidity and User Network Effects: As more games are onboarded, each will bring users and liquidity for in-game assets, which will trickle down to Solana's base layer as well. Additionally, tech integrations for these games will improve Solana's developer tooling.

Base Layer Value Accrual: The Sonic ecosystem is designed to accrue value to the base layer, SOL. The HyperGrid ecosystem employs a staking protocol where validators stake SOL as collateral to participate in the network. This active commitment ensures the security and continuity of all grids within HyperGrid.

In conclusion, Sonic's advancements will establish SVM as the standard for major games using Solana as the settlement layer, much like rollups and L2s did for EVM. This will drive further adoption, innovation, and growth within the Solana ecosystem, solidifying its position as a leading blockchain platform for gaming and beyond.

This piece was greatly inspired by Yash Agarwal’s blog on 'Solana Need L2s and Appchains' on the Superteam blog, and we appreciate the review.