Fuel network is an execution layer designed to introduce modularity into blockchains. The aim is to make blockchains more scalable as each layer of a blockchain is separated from others and designed to work independently.
Fuel network was created first as a layer 2 technology on the Ethereum blockchain, deployed in 2020, to improve the ability of blockchains to scale. While there has been an increase in the number and usage of layer 2 networks, the challenge of paying higher gas fees during congestion periods is still existing today.
Fuel network is designed to optimize blockchain transactions and reduce the impact of gas fee increases during peak periods.
The modularity effect
Ethereum as an earlier blockchain network is designed as a monolithic system where its consensus, data availability, and execution are joined or controlled as one. In today’s world, there is a migration from a monolithic system to a modular system.
In the modular system, the three components – consensus, data availability, and execution – are separated on a chain. An example of this is the Celestia blockchain. This demarcation brings specialization to the base layer for any blockchain designed as a modular system.
Using the modular system, the Fuel network acts as one of the fastest execution layers for chains built using modular stacks. It also provides a high security and throughput structure for chains built with it. Fuel makes execution more efficient.
Features of the Fuel network
Fuel network has three major pillars that make up its stack – Parallel transaction execution, Fuel Virtual Machine (FuelVM), and the Sway language.
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Parallel Transaction Execution
There are two common models of executing transactions and processing user balance on the blockchain. They are UTXO and the Account model.
Ethereum uses the account model which operates in such a way that the balance of the token held by a user is sequentially calculated all the time to maintain a correct state of the blockchain.
Thus, each time a transaction occurs, Ethereum follows a process to update all records of token balances. This method is known to be inefficient because it takes more time as not all aspects of the CPU involved in the processing are used.
But in the UTXO model, which FuelVM uses, each transaction stands out and does not need to be processed with all other transactions at the same time. Therefore, when a transaction is initiated, it is recorded as a receipt.
And when the final balance of a token held by a holder is being displayed, it is done by adding up the available unspent transaction output (UTXOs). It doesn’t keep track of all balances all the time like Ethereum does. Once a user wants to view the balance, the UTXOs are used immediately.
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Fuel Virtual Machine (FuelVM)
Fuel is designed with the Fuel Virtual Machine, its version of the Ethereum Virtual Machine. It is designed using several proposals related to the EVM. Some of which include ERC-2098, EIP-3074, EIP-3102, EIP-4758, EIP-5027, EIP-86, EIP-2926 amongst others.
Some of the differences between the two virtual machines are that fraud provability is easier on FuelVM than on EVM. To construct fraud proofs on EVM requires another layer such as WASM or MIPS but on FuelVM, there is no need for a second layer.
Another difference between FuelVM and EVM is that on FuelVM, tokens of other projects can be sent and received as seamlessly as the Fuel token. Thus, with or without the token contract of external crypto assets on the Fuel network, these external tokens are treated like Fuel tokens. This is different from EVM which gives preference to Ether over external tokens.
FuelVM also uses the Register-based system to process its activities. This is different from the Stack-based system – used by EVM – that uses more instructions to do the same work as the former. Thus, FuelVM does more with fewer instructions.
With an atomic UTXO system, FuelVM allows the consistent transfer of assets without the need to rebuild the accounts tree of the asset each time these transfers are done. This saves time and provides a faster machine for activities done on Fuel.
Sway like Solidity in Ethereum is the native language of Fuel Network and comes with a toolchain, Forc (Fuel Orchestrator). Sway combines some advantages of Solidity (storage, ergonomic, and safe contract programming standards) and Rust (syntax, borrow checker, and safety-first semantics).
Through Forc, developers have access to a variety of tools and commands, such as scaffolding a new project, formatting, running scripts, deploying contracts, and testing contracts, while building in the Fuel ecosystem. Other components on Fuel include the Fuel Indexer, a standalone service for indexing several components of the blockchain; and a Network Explorer.
Projects building on Fuel
Projects on the Fuel platform include DEXes (Microchain Systems, and Elix Finance); Unic, and Thunder, NFT marketplaces; Acumen Finance, a lending platform; Fuel Nomen, a name service; Orao, Oracles, and VRF; Sway DCA, dollar costing average protocol; PoolSharks, order book SDK; WebGum, digital file marketplace; Fuel Punks, an NFT project; and Fuelet wallet.
Team behind Fuel
A few of the core team members of Fuel include John Adler, co-founder of Fuel; Nick Dodson, CEO of Fuel Labs; Emily Herbert, core contributor of Sway Language and Fuel Labs; Mohammad Fawaz, team lead of Sway Language; Cami Ramos, head of developer relations at Fuel Labs; Alex Hansen, CTO of Fuel Labs. Fuel has successfully raised over $80 million in funding on two separate occasions. In 2021, they raised $1.5 million in a round (non-equity assistance) led by CoinFund with participation from Fenbushi Capital and Origin Capital.
Fuel Labs recently announced an $80 million venture round led by Blockchain Capital and Stratos, with participation from Alameda Research, Maven 11 Capital, and Spartan, among others. This raise will aid Fuel Labs in its vision to build a high-performance modular execution layer.
Fuel Grant Program
Fuel also has an open Grant program created to support teams that are developing in its ecosystem. According to Fuel, the grant ranges from $10,000 to $150,000. For registration, see this.
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