What is the Ethereum Virtual Machine (EVM)?

The Ethereum Virtual Machine (EVM) represents a groundbreaking innovation in blockchain technology, serving as the computational engine that powers the Ethereum network and various EVM chain ecosystems. When Vitalik Buterin created Ethereum, his vision extended beyond Bitcoin's simple peer-to-peer transactions. He envisioned a blockchain capable of executing complex programs and self-enforcing agreements, which led to the development of smart contracts and the EVM that executes them.

What are smart contracts?

Smart contracts are autonomous computer programs that execute predetermined instructions on a blockchain network without human intervention. These self-executing contracts consist of data codes that developers deploy to carry out specific tasks automatically. Once deployed, users cannot control smart contracts as they operate exactly as programmed, ensuring transparency and reliability. The Ethereum network pioneered the implementation of smart contracts in blockchain technology, becoming the first platform to successfully integrate this revolutionary concept. Today, millions of smart contracts operate on the Ethereum blockchain and across various EVM chain networks, facilitating everything from financial transactions to complex organizational governance, all made possible through the EVM's sophisticated execution environment.

What is the Ethereum Virtual Machine (EVM)?

The Ethereum Virtual Machine is a sophisticated virtual machine software embedded at the core of Ethereum's protocol and numerous EVM chain implementations. As a digital software environment, the EVM serves multiple critical functions within the Ethereum ecosystem. It acts as the computational engine that powers the entire network, executing programs, storing data, connecting to networks, and performing various computational tasks. Most importantly, the EVM is responsible for the execution and deployment of smart contracts on the Ethereum blockchain and compatible EVM chain platforms. Unlike traditional virtual machines, the EVM operates in a decentralized manner across thousands of nodes worldwide, ensuring that smart contract execution is consistent, transparent, and tamper-proof. This distributed architecture makes the EVM a truly revolutionary piece of technology that enables trustless computation on a global scale.

How it works

The EVM operates through an intricate two-state system that distinguishes Ethereum and EVM chain networks from simpler blockchain networks. This sophisticated architecture allows Ethereum to function as what developers call an "unbounded state machine," capable of processing complex transactions beyond simple value transfers. The EVM manages two distinct states: the world state and the machine state, each serving specific purposes in the transaction processing lifecycle.

World state

The world state functions as Ethereum's permanent record of all account balances and smart contracts. Similar to Bitcoin's ledger but more comprehensive, this state is decentralized, immutable, and publicly accessible to anyone with internet access. Every time the EVM completes a transaction, it updates this layer, ensuring that all participants can view identical, real-time data through block explorers. This transparency and consistency are fundamental to Ethereum's trustless operation across all EVM chain implementations.

Machine state

The machine state serves as the EVM's execution environment, often called Ethereum's sandbox for developers. Here, the EVM processes transactions step-by-step, handling two primary transaction types. The first type, "message calls," involves simple ETH token transfers between accounts. During these transactions, the EVM moves tokens from one wallet address to another and updates the world state accordingly, charging the sender gas fees for the computational work performed. The second transaction type, "contract creation," occurs when developers deploy smart contracts to Ethereum or any EVM chain. In this scenario, developers provide gas fees and submit smart contract bytecode, which the EVM then processes and stores on the blockchain.

Solidity programming language

Solidity stands as the predominant programming language for creating Ethereum smart contracts and applications on EVM chain platforms. This high-level language, similar to JavaScript in syntax and structure, is designed to be human-readable and developer-friendly. However, machines cannot directly interpret Solidity code, necessitating a translation process. Developers must compile their Solidity smart contracts into machine-readable bytecode using specialized tools like the Ethereum Virtual Machine compiler (solc). This compilation process transforms human-readable code into low-level instructions that the EVM can execute, bridging the gap between developer intent and machine execution.

Smart contract execution

The EVM's smart contract execution process demonstrates sophisticated resource management and security measures across all EVM chain implementations. As the EVM executes bytecode instructions, it continuously monitors and deducts from the gas supply based on each computation's cost. This metering system ensures fair resource allocation and prevents abuse. If the gas supply depletes to zero before transaction completion, the EVM immediately halts execution, abandons the transaction, and leaves the world state unchanged. While the network remains unaffected, the sender's balance decreases to compensate for the computational resources consumed up to the halting point. Conversely, when execution completes successfully, the EVM updates the world state to reflect the changes made during the machine state processing, finalizing the transaction and making its effects permanent on the blockchain.

Ethereum gas fees

Gas fees play a multifaceted role in the Ethereum ecosystem and across EVM chain networks, serving both as validator incentives and security mechanisms. In Ethereum's current Proof of Stake model, gas fees compensate validators for the computational resources associated with transaction processing. For simple ETH transfers, gas fees fluctuate based on network congestion and transaction pool demand. However, gas fees take on additional significance when executing smart contracts. At execution time, smart contract bytecode is decomposed into smaller units called "opcodes" or Operational Codes. Each opcode carries an assigned gas cost proportional to its computational complexity—more complex operations require higher fees. This pricing structure is crucial for maintaining Ethereum's security. For instance, if an attacker attempts a DDoS attack by deploying malicious smart contracts, the EVM continues processing while charging gas fees for every computation. When the attacker's gas supply exhausts, the EVM abandons the transaction, effectively neutralizing the threat without compromising network integrity.

What are the benefits of EVM?

The EVM provides numerous advantages that have solidified Ethereum's position as the leading smart contract platform and inspired countless EVM chain projects. Its primary benefit lies in security—the EVM's architecture and gas fee mechanism create a robust defense against malicious attacks while enabling smart contracts to execute in a trustworthy environment. The Ethereum network has grown into the largest cryptocurrency ecosystem, widely recognized as the gold standard for decentralized application (DApp) development and smart contract deployment. This success has inspired numerous blockchain projects to create EVM-compatible side chains, allowing developers to port their applications seamlessly without code modifications. The EVM's decentralized nature ensures permissionless innovation, enabling anyone to create smart contracts without requiring authorization. This openness has fostered explosive growth in decentralized services and applications across multiple EVM chain networks, democratizing access to blockchain technology and empowering developers worldwide to build the next generation of decentralized solutions.

EVM use cases

The Ethereum Virtual Machine has enabled numerous groundbreaking applications across the blockchain ecosystem and various EVM chain platforms. These use cases demonstrate the versatility and power of EVM-based smart contracts:

ERC-20 tokens

ERC-20 tokens represent fungible digital assets created through smart contracts using standardized data structures. These structures define token characteristics such as names, distribution mechanisms, and tracking systems. Following the initial coin offering boom, countless new cryptocurrencies have launched using the ERC-20 standard. Today, ERC-20 tokens find their most prominent application in stablecoins like USDT, providing price stability and facilitating seamless value transfers across the cryptocurrency ecosystem and various EVM chain networks.

Decentralized Exchanges

Decentralized trading platforms revolutionize cryptocurrency trading by employing smart contracts to facilitate peer-to-peer transactions without intermediaries. Platforms implementing automated market maker (AMM) protocols enable users to access token liquidity pools directly. These platforms eliminate traditional exchange vulnerabilities while providing users with complete control over their assets throughout the trading process across multiple EVM chain networks.

NFTs

Non-fungible tokens (NFTs) represent unique digital artifacts authenticated and stored on the blockchain. Smart contracts enable creators to mint and manage NFT collections, ensuring authenticity and preventing duplication. High-value collections such as Bored Ape Yacht Club (BAYC) and Cryptopunks demonstrate NFTs' cultural and economic significance. Owners can freely transfer or trade their NFTs on various marketplaces, with all transactions secured and verified through EVM-executed smart contracts on different EVM chain platforms.

DeFi lending

Decentralized Finance (DeFi) lending platforms eliminate traditional financial intermediaries by using smart contracts to govern borrowing and lending protocols. These platforms provide immediate loan issuance to borrowers while offering lenders competitive interest rates, sometimes distributed daily. The automated, trustless nature of these protocols reduces costs and increases accessibility across multiple EVM chain ecosystems, democratizing financial services globally.

Decentralized Autonomous Organizations

Decentralized Autonomous Organizations (DAOs) represent a new paradigm in organizational governance, operating without central authority. DAO members collectively make decisions regarding project direction and resource allocation. Smart contracts encode and enforce organizational rules, ensuring transparent and democratic governance across various EVM chain networks. This model enables global collaboration and community-driven development across various industries and initiatives.

EVM limitations

Despite its revolutionary capabilities, the EVM faces two significant challenges. First, it requires users to possess Solidity programming knowledge and coding skills, creating barriers to entry for non-technical users who wish to create or interact with smart contracts. This limitation restricts broader adoption and innovation to those with technical expertise. Second, gas fees can become prohibitively expensive, particularly during network congestion. High costs associated with smart contract creation and DApp deployment can discourage developers and users, limiting the platform's accessibility and scalability across various EVM chain implementations.

Which cryptocurrencies are EVM compatible?

EVM compatibility has emerged as a popular solution for addressing Ethereum's high gas fees and scalability challenges. Several blockchain networks have adopted EVM-compatible architectures, allowing developers to deploy Ethereum-based applications with minimal modifications. This compatibility enables seamless asset transfers between networks while maintaining familiar development environments. Notable EVM chain platforms include various Layer-1 and Layer-2 solutions such as Avalanche, Fantom, Cardano, Polygon, and Tron. These EVM chain networks leverage Ethereum's proven technology while offering faster transaction speeds and lower fees, creating a diverse ecosystem of interconnected blockchain platforms that expand user choice and developer flexibility.

The future of EVM

The Ethereum Virtual Machine continues to evolve, advancing toward Vitalik Buterin's vision of a universally accessible decentralized supercomputer. Recent developments demonstrate significant progress in addressing scalability and efficiency challenges across the EVM chain ecosystem. The Dencun upgrade, completed in early 2024, introduced transformative improvements through EIP-4844 and proto-danksharding. This innovation significantly reduces gas fees by enabling more efficient Layer-2 transaction data processing through a new data type called blobs, which are temporarily stored rather than permanently retained on the blockchain. Additionally, EIP-4788 enhanced interoperability by allowing the EVM to directly access the Beacon Chain's state, crucial for protocols involving liquid staking and cross-chain interactions. Looking forward, Ethereum's roadmap emphasizes scalability through rollups and zero-knowledge EVMs (zkEVMs). These zkEVMs enable efficient off-chain transaction processing while maintaining Ethereum compatibility, promising substantial improvements in scalability and performance without compromising security or decentralization across all EVM chain implementations.

Conclusion

The Ethereum Virtual Machine stands as a cornerstone of blockchain innovation, fundamentally enabling the execution of smart contracts and the operation of the Ethereum network and numerous EVM chain platforms. As essential infrastructure, the EVM performs critical computational tasks while maintaining network security through sophisticated mechanisms like gas fees and state management. Beyond its technical operations, the EVM has catalyzed a revolution in decentralized applications, from DeFi protocols and NFTs to DAOs and decentralized trading platforms. Its influence extends beyond Ethereum through EVM-compatible blockchains, creating an interconnected ecosystem that balances innovation with proven technology. Despite facing challenges such as high gas fees and technical barriers to entry, ongoing developments like the Dencun upgrade and zkEVMs demonstrate Ethereum's commitment to improvement. As the EVM continues to evolve, it remains fundamental to realizing the vision of a decentralized, accessible, and secure computational platform that empowers developers and users worldwide to build the future of Web3 across multiple EVM chain networks.

FAQ

What is an EVM chain?

An EVM chain is a blockchain that runs smart contracts and processes transactions using the Ethereum Virtual Machine protocol. It's compatible with Ethereum, enabling interoperability with other EVM-based chains.

How many EVM chains are there?

As of 2025, there are hundreds of EVM chains. The exact number fluctuates as new chains emerge and some become inactive, but estimates suggest over 200 active EVM-compatible blockchains.

Is Solana an EVM chain?

No, Solana is not an EVM chain. It uses its own runtime and consensus mechanism, but offers EVM compatibility through solutions like Neon EVM.

What is an EVM side chain?

An EVM side chain is a blockchain that runs parallel to a main chain, using Ethereum's technology. It offers faster and cheaper transactions while maintaining compatibility with Ethereum's smart contracts and tools.