Neon EVM: Pioneer of the Solana Network Extensions

TLDR: Neon EVM is the definition of what a Solana Network Extension is. Neon EVM was built to create new use cases and broaden the core capabilities of the Solana blockchain maintaining unified liquidity and user experience. SVM networks using different consensus layers than Solana are not a Solana Network Extension, nor those fragmenting liquidity or user base. Solana L1s modular approach differs from the Ethereum one, as it is mainly focused on enhancing the functionalities of the base layer rather than its performance. Neon EVM achieves this mission by allowing EVM builders to become Solana-native and leverage composability between the EVM layer and Solana.

Within the rapidly growing Solana ecosystem, several innovative projects don’t fit into any clear product category, creating challenges for market understanding and accurate classification. This ambiguity leads to confusion, as these projects fall into a gray area, sparking debate within the community and leaving their true value underappreciated.

Beyond the Modular vs. Monolithic debate

One of the most significant discussions in the blockchain space today revolves around modular versus monolithic blockchain design. In a monolithic blockchain, all core functions—execution, settlement, consensus, and data availability—are managed on a single layer. This approach prioritizes speed, efficiency, and scalability within a unified system. On the other hand, modular blockchains separate these core components across multiple layers, allowing for more flexibility but often at the cost of additional complexity and slower finality.

This debate, when applied to Solana, misses an important nuance: not all projects aiming to enhance Solana capabilities fit neatly into this framework. For example, some projects introduce new functionality or tools and solely rely on Solana L1s underlying structure without altering UX or fragmenting the markets.

Moreover, as L1 ecosystem grows, more projects emerge that blend product categories. They serve a critical function in expanding Solana capabilities but struggle to position themself due to their categorization challenges.

Neon EVM: An Illustrative Example

Take Neon EVM as a case in point. Neon isn’t a typical L2—it runs as an EVM (Ethereum Virtual Machine) on Solana, extending the network’s deeper compatibility with Ethereum-based applications while remaining fully integrated with Solana L1. Unlike Optimistic or ZK Rollups, Neon doesn’t process transactions off-chain. Instead, it allows developers to deploy Ethereum dApps on Solana, leveraging the base layer's core capabilities.

Source: Toly’s tweet

Neon doesn’t fit into the standard L1 classification either. It doesn’t have its own consensus mechanism or independent blockchain architecture, features that define a true L1 protocol.

Neon also goes beyond being a simple dApp on Solana. It integrates several key modules, such as Neon Proxy, which translates Ethereum-like transactions into Solana transactions, and the Neon EVM contract, which unpacks and executes these transactions on Solana’s validators. Additionally, Neon offers a Tracing API that supports Ethereum client compatibility. Neon EVM represents a compatibility layer rather than fitting into the rigid L1 or L2 framework.

A Broader Challenge Across the Solana Ecosystem

Neon EVM isn’t an isolated case. Across the Solana ecosystem, numerous projects like Magicblock, Metaplex, Jito, Light Protocol, Marginfi, Squads and more… are creating tools, services, and infrastructure that don’t always fit into well-defined single categories. Without clear product categories, these projects might face difficulties in market positioning, community engagement, and developer adoption. As the ecosystem continues to evolve, more projects that play an essential role in extending Solana capabilities will inevitably fall into this gray area.

Enter Network Extensions: A New Product Category In the Solana Ecosystem

In response to these challenges, Austin Federa, Head of Strategy at the Solana Foundation, recently tweeted about a new product category: Network Extensions. Although the concept is still being debated, we at Neon, believe the following definition captures its essence perfectly:

Solana Network Extensions are specialized modules or "legos" that add specific functions or broaden the Solana core capabilities (Execution, Settlement, Consensus, or Data Availability layers) without fragmenting liquidity and user experience.

We believe that Network Extensions can therefore be defined by a set of simple criteria:

The following map is the result of the application of this rationale to the Solana ecosystem.

The Strategic Importance of Network Extensions

Network Extensions fill a critical gap in the Solana ecosystem. By offering a formal category for projects that natively extend Solana L1s core, we provide clarity to developers, investors, and users alike. These extensions act as building blocks, empowering dApp developers to create innovative solutions that harness the base layer's unique advantages and Network Extension functionalities.

Composability: The Key to Realizing the Solana-native Transition

The success of our Network Extensions strategy translates into a technological reality based on critical factors of composability and Solana-native integration. While Network Extensions is the strategy, the engine under the hood will be the two essentials: Solana-native vision and full composability.

As we move towards full composability, we will make it easier for Solidity smart contracts deployed on Neon EVM to call Solana programs and thereby leverage the growing liquidity and set of solutions built on Solana. Expanding the use cases associated with composability is the first step in this direction and has been demonstrated by examples like the EVM interaction with Orca).

Similarly, the goal is to enable users to interact with applications built on Neon EVM and execute transactions directly in Solana. This is where our Solana-native vision takes over: making L1 liquidity, user base, and integrations (SPL tokens, Metaplex, Solana Pay, Sealevel Parallel tech) accessible without Rust coding.

Read more here on how we are enabling both these

Why Network Extensions, and Why Now for Neon EVM?

The rapid expansion of Solana ecosystem makes this the ideal time to introduce Network Extensions, and Neon EVM is ready to be the key pioneer and leader in this vertical.

To achieve this, Neon EVM will allow EVM builders to integrate with Solana fully, abstracting any representations of the EVM layer, thus enabling new use cases for EVM builders/developers. The Solana community will be able to connect with dApps on Neon EVM using their preferred Solana wallets (such as Phantom, Backpack, or Solflare) and pay gas fees in SOL, maintaining a unified user experience. Users won’t even realize that these dApps are built on an Ethereum-like codebase.

Additionally, the enhancement of existing composability features eliminates liquidity fragmentation and unifies markets, enabling an EVM dApp on Neon EVM to access Solana liquidity and vice versa. Both builders and users have access to Solana and EVM ecosystem without any barriers.

After Breakpoint, the unmatched superiority of Solana technology has been reinforced, and EVM developers are now clearly shifting their attention to this.

Start developing on Neon EVM today and experience seamless integration with Solana!