Stellar sparks smart contract upgrade — and it’s not an EVM

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Val­ida­tors of the Stel­lar net­work vot­ed Tues­day to upgrade the Stel­lar main­net to “Pro­to­col 20,” which intro­duces the Soroban smart con­tract platform.

The addi­tion of smart con­tracts fol­lows years of plan­ning for Stel­lar — which has been known pri­mar­i­ly for pay­ments — as it seeks to com­pete with a pletho­ra of smart con­tract ecosystems.

The Stel­lar com­mu­ni­ty aims to dif­fer­en­ti­ate Soroban by empha­siz­ing a com­bi­na­tion of its effi­cien­cy, focused use cas­es, and inte­gra­tion with Stellar’s exist­ing infrastructure.

Soroban is expect­ed to extend Stellar’s cur­rent strengths on cross-bor­der trans­ac­tions and inter­op­er­abil­i­ty between var­i­ous fiat cur­ren­cies and cryp­tocur­ren­cies, with sup­port for com­pli­ance and reg­u­la­to­ry require­ments direct­ly with­in the smart con­tract lay­er, mak­ing it more appeal­ing for insti­tu­tion­al adoption.

Orig­i­nal­ly launched in 2014, Stel­lar made a name for itself through its native sta­ble­coins, includ­ing USDC, and part­ner­ship with Mon­ey­gram in 2021.

The plat­form was always more than a cur­ren­cy, with many basic build­ing blocks for the pay­ments focus built in, said Tomer Weller, vice pres­i­dent of prod­uct at the Stel­lar Devel­op­ment Foun­da­tion (SDF).

“You have things like pay­ments, a decen­tral­ized exchange, all the tech­ni­cal minu­tia — things like mul­ti­sig, time locks, issu­ing assets as a first class prim­i­tive,” Weller told Block­works. “One thing that’s kind of been absent is this idea of writ­ing ful­ly cus­tom trust-min­i­mized code.”

That’s where smart con­tracts come in.

Playing catch-up or catching narratives?

The past year has seen numer­ous exam­ples of chains that pre­vi­ous­ly launched as their own layer‑1 net­works, shift­ing to an Ethereum L2 — think Celo, and more recent­ly Lisk — or of chains adopt­ing the Ethereum Vir­tu­al Machine (EVM) after once eschew­ing it, such as Tezos, EOS, XRP and IOTA.

With Soroban, Stel­lar is chart­ing its own course, not jump­ing on pre­vail­ing nar­ra­tives — it’s nei­ther a layer‑2, nor is it using the EVM.

“We want to ensure that this doesn’t affect the exist­ing stake­hold­ers, so we’re tak­ing a very pro­gres­sive approach to open­ing up the flood­gates,” Weller explained. “We’re launch­ing with very min­i­mal capa­bil­i­ties and slow­ly open­ing it up.”

It took some time to get full buy-in from all Stellar’s stake­hold­ers, but with the emer­gence of suc­cess­ful decen­tral­ized apps (dapps) like Uniswap on Ethereum — which iter­ate quick­ly thanks to their smart con­tract plat­forms — the SDF real­ized that hav­ing to coor­di­nate a chain upgrade with val­ida­tors to deploy a dapp like an AMM-based DEX wasn’t the ide­al strategy.

“If we actu­al­ly want to have, like, a good pace of inno­va­tion on the pro­to­col lay­er, we prob­a­bly need to detach it from the core pro­to­col,” Weller said, recount­ing delib­er­a­tions from mid-2021.

Then the ques­tion turned to how, exact­ly, to go about imple­ment­ing smart con­tracts with­out dis­rupt­ing the finan­cial insti­tu­tions that already rely on the network.

“We start­ed this jour­ney [try­ing] to be extreme­ly un-opin­ion­at­ed in the begin­ning,” Weller said. “We talked with pret­ty much any­one who would talk to us.”

Even­tu­al­ly, the team set­tled on a WebAssem­bly (WASM) run­time writ­ten in the Rust pro­gram­ming lan­guage. That sets it up to stand out from the EVM crowd, but it still pre­pares for a mul­ti­chain future.

“WebAssem­bly is a very wide­ly used tech­nol­o­gy, not only in the space of blockchains, but also in the web,” Weller said. “There’s a lot of trans­fer­able tools and trans­fer­able knowl­edge, both in terms of WebAssem­bly [and] in terms of Rust.”

Deian Ste­fan, co-founder and chief sci­en­tist at Cubist — which is “large­ly a Rust shop” and focus­es on build­ing tool­ing for cross-chain inter­op­er­abil­i­ty solu­tions — was impressed by Stellar’s approach.

“There are a bunch of real­ly good ver­i­fi­ca­tion tools that would help you get that code right, and the seman­tics of these con­tracts I would say are much sim­pler than some­thing like Solid­i­ty,” the lan­guage of Ethereum smart con­tracts, Ste­fan told Block­works. “A bunch of bugs should just go away or not even exist if you are tar­get­ing Soroban.”

Read more: Solv­ing Web3’s Devel­op­er Prob­lem: Web2 Remains Hesitant

There’s less “low­er lev­el plumb­ing” to be done by devel­op­ers writ­ing smart con­tract code in Rust, Defan said, which is one rea­son why some are attract­ed to Solana.

“I like the tar­get­ing of WASM because it also makes it pos­si­ble to real­ly sup­port a bunch of lan­guages and dove­tail [with] work that’s done on the WASM side of things,” he said, adding: “They have the ben­e­fit of hind­sight from see­ing what Solana has done.”

Cubist aims to con­nect Soroban to EVM-based chains using its cross-chain soft­ware devel­op­ment kit (SDK). That should allow devel­op­ers to build things like cross-chain tokens on top of gener­ic mes­sag­ing sys­tems such as Lay­erZe­ro in order to, for exam­ple, write cross-chain token swaps that work like they would on a sin­gle chain.

Solang, a Solid­i­ty com­pil­er devel­oped under the umbrel­la of the Hyper­ledger Foun­da­tion, will allow EVM dapp builders to port over their code to Soroban, with a bit of effort.

Weller said that Stel­lar took greater inspi­ra­tion from Solana.

“The trans­ac­tions come with an access list which [means] each trans­ac­tion con­tains an indi­ca­tor for ‘what state I’m going to read and what state I’m going to write,’ and then the val­ida­tor can actu­al­ly make an intel­li­gent deci­sion on how to divide the trans­ac­tion sets in a way that they don’t have any depen­den­cies internally.”

This should be use­ful in the future as the plat­form scales. The next ver­sion of Soroban will include con­cur­ren­cy — also known as par­al­lel exe­cu­tion — one of the core require­ments in the architecture.

The ini­tial 10 trans­ac­tions per sec­ond (TPS) looks low at first blush. But Weller point­ed out that’s on top of the exist­ing Stel­lar chain’s 200 TPS, and will rise over time.

“We are tak­ing a very slow and safe approach to scal­a­bil­i­ty here,” he said.

What cross-chain appli­ca­tions devel­op­ers will come up with — and where demand from users will take the plat­form — remains to be seen, accord­ing to Stefan.

“I think there’s a lit­tle bit of a chick­en and egg — it’s so hard to build any­thing that spans mul­ti­ple chains right now,” he said. “If the tools sucked less, we can poten­tial­ly make it eas­i­er for peo­ple to build, and then what peo­ple build will be inter­est­ing to see.”

The plan is to tar­get not only users unfa­mil­iar with Stel­lar, but those unfa­mil­iar with DeFi gen­er­al­ly. For exam­ple, an inte­gra­tion between a Stel­lar wal­let, Beans, Mon­ey­gram and DeFi pro­to­col Blend.

“They demon­strat­ed this very tight expe­ri­ence in which you can deposit cash into USDC and direct­ly into a yield pro­to­col all in the same wal­let and the same expe­ri­ence,” Weller said.

“We’re not going for the ‘degen’ ecosys­tem,” he added. “We’re real­ly try­ing to use the exist­ing stel­lar infra­struc­ture in order to bring more inno­v­a­tive finan­cial instru­ments to peo­ple that don’t nec­es­sar­i­ly have access to them right now.”

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