Ethereum pioneered the generic smart contracting level on its blockchain, so it comes as no surprise that the Ethereum Virtual Machine, or EVM for short, has attracted and retained a large portion of Web3 developers.
What is less well known is that EVM is not intrinsically linked to Ethereum. It is already implemented in several other blockchains. With that in mind, here are three predictions for where the EVM space will grow and evolve in the coming year.
A growing collection of EVMs will become increasingly specialized
The EVM is by far the most popular execution environment among smart contract developers. The proliferation of decentralized applications, or dApps, on Ethereum and Layer 2s is a testament to this vibrant construction scene.
At the same time, users may be a bit disappointed when they see that many of the dApps on these different EVMs are simply forks. The many examples of decentralized exchanges like Uniswap or Sushiswap and lending protocols like Aave are perfect examples of this phenomenon.
These forks are not created unnecessarily – Uniswap on Polygon generally has lower transaction costs than Uniswap on Ethereum – but when considering that liquidity is fragmented among these multiple versions of the dApp and therefore developers are deemed to have to maintain For each of these applications, the case for multi-chain implementations is not very strong.
As the Web3 application space, and especially decentralized finance (DeFi), matures, applications will consolidate into one or a few instances and interact with other ecosystems.
Along with this consolidation, we will also see a growing specialization in EVM to meet specific types of applications. These are called application-specific EVMs, built to fit application categories like DeFi, ReFi [regenerative finance], and infrastructure. Some of these applications will mature and migrate to their application-specific blockchains (appchains), such as what the blockchain-based Cosmos enables.
Already decentralized derivatives exchange dYdX is building its appchain within the Cosmos ecosystem, a decision made by its developers to take more control over the entire platform stack. More native Ethereum apps may soon follow.
However, different dApps have different amounts of contributor resources and developer skills behind them, so don’t expect all of them to become appchains overnight. Building and maintaining an application, especially when it has been deployed to multiple chains, is quite difficult for many teams.
So, in addition to the extensive generic EVMs like Ethereum, Polygon, and Arbitrum, there is also plenty of room for EVMs with unique features. There will be more conservative EVMs (like grandpa Ethereum) and others building innovative new features enabling next-gen dApps.
EVMs will prioritize interoperability and composability
A key component of Vitalik Buterin’s Endgame vision for Ethereum is a thriving multi-accumulation ecosystem. This could very well work, but there will be more than just EVM summaries involved. There will also be many independent but interoperable EVM blockchains, some of which, like Evmos, will develop unique and extensive EVM capabilities.
This expanding collection of EVMs will diversify and see maximum value creation when fully composable. This would allow dApps on one chain to use and interact with dApps deployed on other chains, effectively creating cross-chain “lay money”. In my opinion, this is how the scale of Ethereum (both mainnet and L2 rollup) and Cosmos, each of which has experienced rapid growth, will come together in a larger Interchain.
Ethermint will become the library of choice
Developers will converge on solutions that allow them to launch new EVM blockchains as easily as possible. An open source EVM library like Ethermint, built for interoperability, great developer experience, and extensibility, is a perfect fit for this project. (Full disclosure: Evmos drives development and maintains the Ethermint library.)
The beauty of Ethermint is that it brings together the EVM and the Cosmos SDK [software development kit]. This means that blockchains built with Ethermint can allow EVM smart contracts to use the core Cosmos modules.
I’ve already mentioned the importance of interoperability, and IBC, the non-custodial bridging protocol that made Cosmos famous, is just one of the many unique features enabled by the Cosmos SDK modules that Ethermint can allow dApps to take advantage of.
Additional building blocks such as interchain accounts and interchain queries are making cross-chain application development a reality. These two modules allow chains to forward and act on messages, as well as control the resources in their respective chains.
For example, a cross-chain version of vault-style products like Yearn could move/trade/asset LPs in interconnected chains in Cosmos. That’s the tip of the iceberg when it comes to IBC-enabled dApps, and I’m excited to see this design space explored.
The future is bright for EVMs. They are proliferating, expanding their feature sets and bringing Ethereum and Cosmos together. In 2023 we will see years of infrastructure development bring this to life for users as EVM applications become more powerful and more connected than ever before.