Say Hello to RollApps on Solana

Key Points:

• There is a heavy focus on building scaling solutions in Web3. Innovative approaches to this are seen in Ethereum and Solana, with each ecosystem taking different approaches to addressing scalability.

• Rollup economy on Solana is being suggested amid various scaling approaches. Nevertheless, general-purpose rollups might not represent a suitable scaling option within the Solana environment.

• Customization of a rollup, better known as a rollApp, is getting some attention from stakeholders in the Solana ecosystem.

• RollApps, or application-specific rollups, offer tailored environments for dApps with dedicated blockspace. RollApps could greatly enhance the scalability and performance of Solana, especially for applications requiring significant computational capacity, such as blockchain gaming, DeFi, payments, etc.

Introduction

Scalability has long remained a critical challenge in the blockchain landscape. As blockchain networks grow, the number of transactions they need to handle skyrockets, leading to a continuous quest to enhance transactions per second (TPS), finality, and throughput. Decentralized public blockchains like Bitcoin can only process around 6-8 TPS, and Ethereum mainnet handles about 12-15 TPS. Solana is known for its higher throughput clocks approx 1000-1500 TPS. Meanwhile, traditional centralized private blockchain systems like Visa process around 1,700 TPS on average. With a perpetual effort to explore scaling solutions, decentralized applications (dApps) on blockchains aim to compete with these traditional systems or achieve the mass adoption required for them to grow exponentially.

So what really are scaling solutions?

A scaling solution is a method or technology designed to increase the capacity of a blockchain to handle more transactions and data without compromising its performance or security. These solutions address the limitations of blockchain networks, such as transaction speed and costs, by improving efficiency and throughput.

Scalability on Ethereum vs scalability on Solana environment

Layer 2 (L2) solutions have emerged as critical mechanisms to address scalability issues. They are driven by the need to enhance throughput and efficiency without compromising the foundational security of Layer 1 (L1) blockchains. This dynamic is particularly evident in the context of the Ethereum blockchain, where the pursuit of scalability led to the adoption of layered scaling or sidechain solutions, including L2s, rollups, plasma chains, validiums, rollApps, and much more. With further advancements in modular rollups and their SDKs, numerous types of rollup scaling solutions have emerged in the Ethereum ecosystem. For instance, Optimism has introduced Op Stack, Zksync has open-sourced its Zk Stack, Arbitrum has Abirtrum Nitro, and Polygon has developed its rollup-centric 2.0 architecture.

Image: A snapshot of few examples of Ethereum L2 scaling solutions. Source: Web3Labs. Ethereum’s roadmap is rollup-centric and designed to accelerate and empower rollups.

While scalability on the Ethereum blockchain is heavily cost-dynamic focused (high-demand periods cause transaction costs and gas fees to skyrocket); Solana is dealing with a slightly different scaling context and needs different solutions.

Solana stands out with its unique architectural approach. By integrating Proof-of-History (PoH) alongside its Proof-of-Stake (PoS) mechanism, Solana offers a high-performance, low-latency blockchain environment. This innovation involves stringent hardware requirements, a mempool-less transaction forwarding protocol, and a distinctive account model. Solana's design decouples smart contract logic from the compute state, enhancing scalability and simplifying development. These attributes position Solana as a robust L1 with high throughput and significantly lower costs (in comparison to the Ethereum ecosystem).

Ongoing scalability debate

However, amid the memecoin mania and failed transactions in Q1 2024, the scalability debate on Solana got ignited. It was noticeably highlighted that the total compute cap on a block on Solana L1 is 48M CU.

Source: Solana

And during times of high activity and network congestion, this cap is often reached, says Solana.

During massive growth periods and periods of active transaction activity, the network's computational bandwidth is stretched to its limits.

Solana was quick to address this by adopting vertical scaling paths to handle the burgeoning compute load. These included the introduction of priority fees, reducing the number of CUs used per transaction to help more transactions be processed within the same block capacity, and a software release (v1.18) that will introduce improvements to the transaction scheduler, a component that helps fill blocks efficiently. However, blockspace management still retains its status in the scalability debate.

Within the Solana ecosystem, the debate has reached a fever pitch, fueled by pointed discussions on X among leading figures in the blockchain space. (Read more on this in our previous blog which provides different perspectives about blockspace management — Exploring SVM Scalability Solutions With Demand-driven Modularity).

At the heart of the debate is the question of whether Solana can maintain its performance and economic sustainability without resorting to L2/rollup solutions or whether general-purpose rollups and app-specific scaling solutions would enhance the Solana dApp ecosystem.

Solana says:

Source: X, Anatoly Yakovenko, co-founder Solana & CEO Solana Labs.

Everyone has their take on it, and so do we. Therefore, the focus of this article isn't on scaling Solana due to a lack of innovation at the base layer (as there are plenty of Solana innovations and upgrades, including the upcoming Firedancer). Instead, it brings a new dimension to the scalability and adds a modularity thesis by highlighting the opportunity for dApps to utilize the Solana development stack to create customized rollApp applications. This approach leverages Solana's economic security and consensus while enhancing the overall dApp ecosystem.

This paper delves into rollups and rollApps and takes a market-oriented approach to better understand the available solutions. It will illuminate some interesting answers and clarify the ongoing scalability debate. Here, we will take a more market-savvy approach (while steering clear of tech-heavy lingo) to dissect scaling solutions and find answers to which of these innovations is set to revolutionize the Solana ecosystem.

Rollups on Solana

Rollups are an L2 scaling solution that bundles multiple transactions into a single batch, processes them off-chain, and settles the results back on-chain. They aim to reduce network congestion while still benefiting from the L1's security and consensus mechanisms. Many proponents propose that Solana may need to foray into rollups to address network congestion and enhance scalability without compromising its current high throughput and low transaction costs.

But will general-purpose rollups on Solana essentially bring massive benefits for dApps?

Source: X, Anatoly Yakovenko, co-founder Solana & CEO Solana Labs

Once again Solana CEO clarifies well. Let us shed more light.

In addition to no significant cost benefits, a general-purpose rollup does not fully solve the underlying cause of network congestion on the Solana blockchain—blockspace management. When a general-purpose rollup reaches the same activity as the L1, it is also subject to the same transaction bottlenecks when the block limit is maximized.

At a certain point, it's worth considering whether a rollup economy is worth it, given that the most cited reason for launching a scaling solution in the Solana environment context is ‘blockspace management’.

Source: X, Kyle Samani, Managing partner - Multicoin Capital.

The other problem with a rollup economy on Solana is the fact that it does not essentially fit in well with the Integrated approach that Solana has dedicatedly announced time and again in its monolithic thesis, as highlighted by Solana itself and in Syncracy’s Solana Thesis.

Based on this snapshot, suffice it to say that in the foreseeable future, the Solana ecosystem will always execute and settle everything into the L1 protocol with its own consensus. This scenario forces developers using general-purpose rollups to deal with Solana’s inherent aspects, leaving little room for them to optimize the core of their dApp solutions. While achieving full modularity might be challenging, dApps can still benefit from demand-driven operational customizations. _In other words, let’s keep our minds open to modularity, albeit at a dApp level rather than a chain level, and that takes us to application-specific rollups, better known as rollApps. _

RollApps on Solana: A Customized Solution

Given the unique challenges amid the quest for maximum scalability, customizability, and fee predictability, the concept of rollApps emerge as a more fitting solution for Solana. Unlike shared general-purpose rollups, which aggregate multiple applications into a single execution environment, rollApps provide each dApp with its own dedicated rollup.

This dedicated approach solves several critical issues inherent in shared rollup architectures. RollApp allows developers to build application-specific scaling solutions that can operate independently while still benefiting from the security and consensus of the Solana L1 blockchain.

A good way to understand this is to think—that a blockchain gaming dApp will have completely different needs than a DeFi (decentralized finance) dApp. However, the current market does not permit them to build according to their unique market requirements, and they essentially all follow the same protocol essentials available to them.

The key point is that with a rollApp infrastructure in place, dApps are ‘free to build’ their specific custom solution as they do not have to fit the general Solana requirements.

Benefits of a RollApp Infrastructure

What is the advantage? At a high level: Custom execution environments tailored to specific dApps with massive increases in computational scalability.

Here are some key benefits of a rollApp infrastructure:

1.Customization and flexibility: RollApps provide a high degree of customization, allowing developers to create bespoke scaling solutions tailored to the unique requirements of their dApps. This flexibility enables optimization of transaction processing, resource allocation, speed, fees, etc., to best serve the specific use cases of individual applications. Unlike general-purpose rollups, RollApps can be fine-tuned for performance and functionality based on the needs of the dApp, leading to a more efficient and effective operation. For instance, an orderbook DEX may need an execution speed of >100ms to compete with traditional finance apps. Customizing with SVM rollApps could allow them to unlock such speed for certain types of transactions.

Scaling with rollApps will be much easier because the tooling becomes abstracted and productized. Developers can add more resources of choice as and when required. A blockchain game engineer will no longer need to connect all widgets together, keep things running, and wait for the next threat to jump up whenever things heat up.

2.Improved performance: By dedicating specific resources and blockspace to individual applications, rollApps ensure stable and predictable performance. This isolation prevents network congestion issues that might arise in a shared environment, providing a more reliable user experience. dApps can maintain high throughput and low latency even during peak network activity, thereby enhancing the overall performance of the Solana ecosystem. For example, a high-roller NFT mint in one dApp on the ecosystem will not affect the execution environment of a TradFi dApp aiming to settle high-priority financial transactions at speed.

For blockchain gaming, performance has often been a bottleneck. Blockchains must coordinate with thousands of participants globally each time there’s an update to its stored data. For players, this means that each in-game action has to wait for the next block to be confirmed. Consequently, game designers have been forced to build games that comply with the performance limitations of the L1, removing features that demand extensive computation. With rollApps, however, this is set to change. By leveraging dedicated computational resources, rollApps will enable game developers to design richer, more complex games that deliver real-time experiences without compromising performance.

3.Facilitating Innovation: The modular and customizable nature of RollApps fosters innovation by allowing developers to experiment with new features. This experimentation can lead to the development of advanced dApps that push the boundaries of what is possible in the blockchain space, driving further growth and evolution of the Solana ecosystem. For instance, in the current environment, a DEX is designed to balance several competing goals: financial value for users, high-speed swaps, incentives, minimization of transaction costs, and top-notch security for users and protocol. However, many times dApps are compromising on these criteria in the fierce bid to compete for block space. This scenario is inhospitable for applications and hinders innovation. With the ease of their specific vanilla environment, rollApps can focus more on building innovative features.

While rollApps present numerous advantages for dApps on Solana, they also come with certain limitations, as seen in L2 solutions. Security is one important parameter to consider. This means both rollApp and L1 need to be secure, effectively also doubling the potential vulnerabilities that need to be managed. The increased complexity can lead to more opportunities for bugs and vulnerabilities, necessitating rigorous security audits and ongoing maintenance to ensure the integrity of both layers. However, specialized infrastructure players in the rollApps space are ardently well-suited to design moats and ensure these challenges are overcome.

RollApps are particularly well-suited for enterprise applications that require high levels of customization, performance, and security. By offering a dedicated and isolated environment, rollApps can meet the stringent requirements of enterprise-grade solutions, making them an ideal choice for businesses leveraging blockchain technology for their operations.

RollUps vs RollApps on Solana

At the time of writing, the market is not demonstrating the need for general-purpose rollups on Solana, but the table below compares the rollups and rollApps Unique Selling Propositions.

As the market continues to evolve and innovative solutions are developed, rollApps are emerging as a strong contender for addressing the unique scalability challenges within the Solana ecosystem. This nascent dApps market is ripe for growth, and as projects build and refine their approaches, rollApps technology will likely become even more pronounced in shaping the future of scalability on Solana.

RollApps Value Creation

The RollApp represents a novel blockchain primitive similar to smart contracts, wallets, tokens, or NFTs, which are fundamental building blocks in the ecosystem. Unlike tokens that store value, the primary role of a RollApp is to facilitate the creation of value.

In the podcast - The Sovereign Rollup Thesis | Mustafa Al-Bassam (Celestia) and Preston Evans were heard reflecting on app layer value creation: (The following is a transcript from the video interview)

“There will be fewer Data Availability (DA) layers than execution layers.

And there will be fewer execution layers than application layers.

The total value of application layers will be greater than the total value of execution layers and again greater than the total value of DA layers."

That sums up the flywheel value beautifully.

Future Outlook

Neon EVM is excited about the possibilities opening up for the infrastructure growth on Solana. Our team is dedicated to continually enhancing infrastructure and tooling to ensure that developers can experience the full potential of Web3 technology. Stay tuned for more insights in Neon EVM upcoming articles. The debate between vertical and modular scaling solutions is just beginning, and we will continue to explore and develop the best paths forward.

Are you building?

If you are building an SVM L2 solution or rollApp and would like to connect with us, contact Ramiro Gamen, Partnership Manager, at [email protected] for an insightful conversation. Don’t miss a beat: follow Neon EVM latest updates on Discord and Twitter.