Modular protocol Fuel: Solving expansion, parallelism, and cross-chain. Why is this L2 worthy of attention?

Written by Teahouse Boy

Currently, the traditional monolithic L1 (Layer 1) blockchain architecture performs poorly when processing a large number of concurrent transactions and is prone to bottlenecks, resulting in transaction delays and high costs. In addition, traditional architectures also have technical challenges and limitations in achieving cross-chain interoperability.

To put it more vividly, the current general-purpose computing system or monolithic L1 architecture is like an old country road. Although it was once enough to meet the traffic needs of small villages, as the villages rapidly developed into busy cities, this The small road could no longer cope with the increasing number of vehicles and pedestrians. Today, not only is the road often congested, maintenance and expansion are becoming increasingly difficult.

This complex environment is like the transportation system of a modern city. Facing the increasing flow of vehicles, people and diversified travel needs, what is needed is no longer simply widening the roads, but establishing an efficient three-dimensional transportation network. Including highways, subways, bus systems and pedestrian streets, they must be seamlessly connected to ensure smooth operation.

In order to solve the scalability problem and ensure efficient parallel processing, state management and cross-chain interoperability, solutions like Fuel provide a more modern transportation system that can flexibly respond to the continuous changes in the city. Changing transportation needs ensure that every user can reach their destination quickly and safely.

So, in order to realize the future of Rollup Center, an architecture specifically designed for Ethereum’s Rollup needs is needed. The Fuel design combines Bitcoin's UTXO model, Solana's parallelization, Ethereum's security, Move's asset-oriented design, and Cosmos' interoperability and virtual machine customization to create the ultimate Ethereum rollup operating system.

Simply put, Fuel takes a unique approach that is different from existing blockchain design paradigms. Fuel focuses on modularity of the execution layer to achieve long-term scalability by minimizing state growth. Fuel also introduces FuelVM and the new programming language Sway to overcome the limitations of the Ethereum Virtual Machine (EVM). Fuel is designed to provide an execution environment for highly configurable Rollups powered by highly optimized Rollup designs.

Core Features:

1.FuelVM: Fuel introduces a new FuelVM that supports efficient transaction processing and built-in security measures to transcend the limitations of the EVM. FuelVM adopts a global shared memory architecture, and all contract calls can share the global memory, realizing cross-contract data transmission without storage space. FuelVM allows users to specify the contracts involved in the transaction, allowing the virtual machine to process other transactions while executing non-disputed state access transactions, achieving fully parallel processing. In addition, FuelVM supports a native asset system, allowing UTXO-based native assets to be minted through opcodes, and adopts a multi-dimensional resource pricing model to optimize block utility and promote network decentralization.

2. Modular blockchain structure

Fuel serves as the execution layer, used in conjunction with other blockchain layers such as Ethereum and Celestia, and can be flexibly configured, such as as an Optimistic Rollup on Ethereum . This modularization of multiple blockchain configurations enhances its flexibility and scalability.

3.UTXO model

Fuel uses Bitcoin’s Unspent Transaction Output (UTXO) model, which is different from the traditional account model. Fuel chooses to inherit Bitcoin’s UTXO (Unspent Transaction Output) model as its record In the UTXO model, there is no concept of wallet or account. Each UTXO represents a certain number of tokens. The purpose of the transaction is to consume the previously created UTXO and create a new UTXO. Fuel's UTXO model is more versatile. In addition to representing the transfer of tokens, it can also represent the status of smart contracts. Each contract UTXO carries the status and balance of the contract and is uniquely identified by the contract ID. This model allows transactions to be executed in parallel and ensures that the execution order of transactions complies with specifications by constructing strict access lists, thereby improving transaction processing efficiency.

4. Parallel processing: Through strict access lists, Fuel allows independent transactions to be processed in parallel, thus greatly improving throughput.

5.Sway programming language: The Fuel team developed the Sway programming language. Sway is built on Rust and incorporates the features of Solidity to provide a simple development experience for the Fuel environment with high computing requirements. Sway inherits the syntax of Rust, enabling developers to write safe and efficient smart contract code, and has built-in top-level contract storage and blockchain mechanisms, providing a safer programming environment. The Fuel team also developed the Sway toolchain Forc, including a package manager, VSCode extension, test infrastructure, and block explorer to support developers using Sway.

6. Scripts and predicates: Fuel supports scripts and predicates, allowing multiple contracts to be called in a single transaction and determining the availability of UTXO through conditions, thereby reducing state bloat.

7. Account abstraction: Through UTXO and predicates, Fuel implements stateless account abstraction, allowing programmatic definition of transaction verification conditions.

Based on these developer-friendly technologies, multiple teams are now building projects on Fuel.

• Elix is ​​a DEX focused on providing efficient trading and low slippage. The team draws on principles from proven mechanisms like centralized liquidity pools on Curve to allow users to trade under ideal conditions. Since Elix will use Fuel, it can take advantage of parallel processing, which means faster transactions and greater security.
• Spark is a DeFi super application built on the Fuel network, aiming to revolutionize financial services through its comprehensive suite of services. Spark v1 introduces a multi-collateral cross-margin system, supports deposits of multiple assets, and implements complex clearing protocols to ensure trading flexibility and risk management. Spar supports long-term and short-term perpetual contracts up to 2000 TPS, provides a comprehensive SDK and API, supports non-custodial interaction with the order book, and promotes integration and innovation. The Fuel Network enables Spark to leverage its high throughput and security to implement complex financial services.
• The Acumen Protocol is a non-custodial interest rate protocol that uses algorithmically set interest rates to enable open financial applications. It bridges cryptocurrencies and traditional finance, enabling DeFi users to earn attractive, stable, and uncorrelated yields while creating a level playing field where small and medium-sized enterprises (SMEs) and entrepreneurs can thrive. Fuel serves as a modular execution layer that provides Acumen with the blockchain infrastructure, ensuring the performance and security of the Acumen platform as it handles large volumes of debt and asset tokenized transactions.
• Thunder is an NFT marketplace that allows bulk transactions to be completed in a single transaction with minimal fees. For experienced NFT traders, the marketplace looks to be a more seamless trading experience, with parallelization enabling fast transactions.

To prepare for the upcoming Fuel mainnet launch, Fuel launched the Fuel points program on July 8.

Participants can deposit eligible assets into the pre-deposit smart contract through the Fuel Points Program Portal. These assets will be stored in the Fuel pre-storage smart contract on Ethereum before the launch of the Fuel mainnet. After depositing assets, participants will receive Fuel Points daily based on the USD value of the deposited assets.

Participants can earn between 1.5 and 3 points per dollar of deposited asset value per day, depending on the type of asset deposited. For example, when depositing ETH, users will earn 1.5 points for every $1 of ETH deposited per day. The USD value of the asset is determined hourly by a price oracle (such as the DeFiLlama API), and points are calculated based on this value. For example, if a user deposits 1 ETH when the ETH price is $3500, the user will receive 3500 × 1.5/24 = 218.75 points/hour.

Points can be monitored through the portal, and early depositors will receive more points. Currently accepted assets include ETH, WETH, EETH, rETH, rsETH, WBETH, USDT, USDC, USDE, sUSDE, ezETH, and stETH. Point multipliers for different assets may change, and specific information will be published on the X platform through FuelNetwork. After the Fuel mainnet is released, participants need to bridge their pre-deposited assets to the mainnet within 14 days after the release, otherwise the points will be forfeited.

In general, Fuel can be regarded as a project worthy of the attention of long-term investors, especially with the benefits of capital support, the application of the Layer-2 new token model and the launch of the mainnet. Fuel's ecological development and ongoing funding program have kept its ecosystem full of new ideas and creativity, and it is already relatively prosperous at such an early stage of the project. However, the Fuel mainnet has not yet been launched, and its performance in the Rollup competitive market still needs time to be verified. Let us continue to pay attention to future developments.

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