Fuel is a permissionless and trustless second-layer modular execution protocol within Ethereum, aimed at low-cost, high-throughput value transfer transactions.

Currently, traditional monolithic Layer 1 (L1) blockchain architectures perform poorly when handling large volumes of concurrent transactions, leading to bottlenecks, transaction delays, and high fees. Additionally, traditional architectures face technical challenges and limitations in achieving cross-chain interoperability.

To put it more vividly, the general-purpose computing systems or monolithic L1 architectures in use today are like an old country road. While it once sufficed for a small village, as the village rapidly grew into a bustling city, this road could no longer handle the increasing number of vehicles and pedestrians. Now, not only does this road frequently experience congestion, but its maintenance and expansion have also become increasingly difficult.

This complex environment is akin to a modern city’s transportation system, which faces increasing traffic, pedestrian flows, and diverse travel demands. Simply widening the roads is no longer enough; what’s needed is an efficient multi-layered transportation network, including highways, subways, bus systems, and pedestrian walkways, all seamlessly connected to ensure smooth operation.

Solutions like Fuel, designed to address scalability while ensuring efficient parallel processing, state management, and cross-chain interoperability, propose a more modern transportation system capable of flexibly adapting to the ever-changing traffic demands of a city, ensuring every user can reach their destination quickly and safely.

Thus, to realize a Rollup-centric future, an architecture specifically designed for Ethereum Rollup needs is essential. Fuel’s design combines Bitcoin’s UTXO model, Solana’s parallelism, Ethereum’s security, Move’s asset-oriented design, and Cosmos’ interoperability and virtual machine customization, creating the ultimate Ethereum Rollup operating system.

In simple terms, Fuel adopts a unique approach that differs from existing blockchain design paradigms. Fuel focuses on modularizing the execution layer, achieving long-term scalability by minimizing state growth. It also introduces FuelVM and a new programming language, Sway, overcoming the limitations of the Ethereum Virtual Machine (EVM). Fuel’s design aims to provide an execution environment for highly configurable Rollups, powered by a highly optimized Rollup design.

Core Features:

FuelVM: Fuel introduces the new FuelVM, supporting efficient transaction processing and built-in security measures that surpass EVM limitations. FuelVM employs a globally shared memory architecture where all contract calls can share global memory, enabling cross-contract data transmission without storage space. FuelVM allows users to specify the contracts involved in a transaction, enabling the virtual machine to handle other transactions while executing non-contentious state access transactions, achieving fully parallel processing. Additionally, FuelVM supports a native asset system, allowing minting UTXO-based native assets through opcodes and adopts a multi-dimensional resource pricing model, optimizing block utility and promoting network decentralization.

Modular Blockchain Structure: Fuel leverages a modular blockchain architecture to achieve scalability and flexibility, making it a forward-thinking solution for the next generation of blockchain applications.

Fuel, as an execution layer, can be flexibly configured to work with other blockchain layers like Ethereum and Celestia. For example, it can function as an Optimistic Rollup on Ethereum. This modular and multi-blockchain configuration enhances its flexibility and scalability.

1. UTXO model

Fuel utilizes Bitcoin’s Unspent Transaction Output (UTXO) model, which is different from the traditional account model. In the UTXO model, there are no wallets or accounts; instead, each UTXO represents a specific amount of tokens. Transactions consume previously created UTXOs and create new ones. Fuel’s UTXO model is more versatile, representing not only token transfers but also the state of smart contracts. Each contract UTXO carries the contract’s state and balance, uniquely identified by a contract ID. This model allows for parallel execution of transactions by constructing strict access lists to ensure proper execution order, thereby improving transaction processing efficiency.

Parallel Processing:Fuel’s architecture supports parallel processing of independent transactions through the use of strict access lists, significantly boosting throughput.

Sway Programming Language:The Fuel team developed the Sway programming language, which is built on Rust and integrates features from Solidity. Sway provides a streamlined development experience for the high-computation environment of Fuel. It inherits Rust’s syntax, allowing developers to write secure and efficient smart contract code. Sway includes top-level contract storage and blockchain mechanisms, providing a safer programming environment. Additionally, the Fuel team developed the Sway toolchain Forc, which includes a package manager, VSCode extension, testing infrastructure, and block explorer to support developers using Sway.

Scripts and Predicates：Fuel supports scripts and predicates, enabling multiple contracts to be called within a single transaction and determining UTXO availability through conditions, thereby reducing state bloat.

Account Abstraction: Through the use of UTXOs and predicates, Fuel achieves stateless account abstraction, allowing programmable transaction verification conditions.

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

Elix

Elix is a DEX (Decentralized Exchange) focused on providing efficient trading and low slippage. The team has drawn on the principles of established mechanisms like the concentrated liquidity pools on Curve to enable users to trade under ideal conditions. By leveraging Fuel, Elix can utilize parallel processing, resulting in faster transaction speeds and enhanced security.

Spark

Spark is a DeFi super app built on the Fuel network, aiming to revolutionize financial services with its comprehensive service suite. Spark v1 introduces a multi-collateral cross-margin system, supporting the deposit of various assets and implementing complex liquidation protocols to ensure transaction flexibility and risk management. Spark supports long-term and short-term perpetual contracts with up to 2000 TPS, offering a comprehensive SDK and API for non-custodial interaction with the order book, facilitating integration and innovation. Fuel’s high throughput and security allow Spark to deliver sophisticated financial services.

Acumen Protocol

Acumen is a non-custodial interest rate protocol that uses algorithmically determined rates to enable open financial applications. It connects cryptocurrencies with traditional finance, offering DeFi users attractive, stable, and uncorrelated yields, while creating a fair environment for SMEs and entrepreneurs to thrive. As a modular execution layer, Fuel provides the blockchain infrastructure for Acumen, ensuring the platform’s performance and security in handling large volumes of debt and asset tokenization transactions.

Thunder

Thunder is an NFT marketplace designed to facilitate bulk transactions at minimal fees in a single transaction. For experienced NFT traders, this marketplace offers a seamless trading experience with fast transactions enabled by parallelization.

In preparation for the upcoming Fuel mainnet launch, Fuel introduced the Fuel Points program on July 8th. This initiative is aimed at engaging the community and ensuring a smooth transition to the mainnet.

Participants can deposit eligible assets into a pre-deposit smart contract through the Fuel Points Program portal. These assets will be stored in the Fuel pre-deposit smart contract on Ethereum until the Fuel mainnet launches. After depositing, participants will earn Fuel points daily based on the USD value of their deposited assets.

Participants can earn between 1.5 to 3 points per dollar of asset value deposited daily, depending on the type of asset deposited. For example, depositing ETH will earn users 1.5 points per dollar of ETH deposited per day. The USD value of assets is determined hourly by a price oracle, such as the DeFiLlama API, and points are calculated based on this value. For instance, if a user deposits 1 ETH when the price of ETH is $3,500, the user will earn 3500 × 1.5 / 24 = 218.75 points per hour.

Points can be monitored through the portal, with early depositors earning more points. Currently accepted assets include ETH, WETH, EETH, rETH, rsETH, WBETH, USDT, USDC, USDE, sUSDE, ezETH, and stETH. The point multiplier for different assets may change, with specific information released by Fuel Network on the X platform. After the Fuel mainnet launch, participants need to bridge their pre-deposited assets to the mainnet within 14 days, or their points will be forfeited.

Overall, Fuel is worth the attention of long-term investors, especially with capital backing, the application of new Layer-2 token models, and the positive outlook of the mainnet launch. Fuel’s ecosystem development and continuous funding programs foster new ideas and creativity, making the ecosystem relatively prosperous even at this early stage. However, with the mainnet yet to launch, Fuel’s performance in the competitive Rollup market remains to be seen. Let’s keep an eye on future developments.

Disclaimer

1. This article is reposted from [链茶馆], with the original title “Fuel: Solving Scalability, Parallelism, and Cross-Chain Issues - What’s the Background of This Unreleased L2 Protocol?”, and the copyright belongs to the original author [茶馆小二儿]. If there are any objections to the repost, please contact the Gate Learn team who will process it according to relevant procedures.

2. The views and opinions expressed in this article are solely those of the author and do not constitute investment advice.

3. Other language versions of the article have been translated by the Gate Learn team and should not be copied, distributed, or plagiarized without mention