Fuel is a permissionless, trustless, layer-2 modular execution protocol within Ethereum, targeting low-cost, high-throughput value transfer transactions.
Currently, the traditional monolithic L1 (Layer 1) blockchain architecture performs poorly when handling a large number of concurrent transactions and is prone to bottlenecks, resulting in transaction delays and high fees. In addition, the traditional architecture also has technical challenges and limitations in achieving cross-chain interoperability.
To put it more vividly, the general-purpose computing system or monolithic L1 architecture currently in use is like an old country road, which was once sufficient to meet the traffic needs of a small village. However, as the village quickly developed into a busy city, this road can no longer cope with the increasing number of vehicles and pedestrians. Today, this road is not only often congested, but also becoming increasingly difficult to maintain and expand.
This complex environment is like the transportation system of a modern city. Faced with increasing traffic, passenger flow and diverse travel needs, what is needed is no longer simply widening roads, but establishing an efficient three-dimensional transportation network, including highways, subways, bus systems and pedestrian streets, which must be seamlessly connected to each other to ensure smooth operation.
Solutions like Fuel, in order to solve the scalability problem and ensure efficient parallel processing, state management and cross-chain interoperability, provide a more modern transportation system that can flexibly respond to the city’s changing transportation needs and ensure that every user can reach their destination quickly and safely.
Therefore, in order to realize the future of Rollup Center, an architecture designed specifically for Ethereum 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.
In short, Fuel adopts a unique approach that is different from the existing blockchain design paradigm. Fuel focuses on the modularity of the execution layer and achieves long-term scalability by minimizing state growth. Fuel also introduces FuelVM and a new programming language Sway to overcome the limitations of the Ethereum Virtual Machine (EVM). Fuel was originally designed to provide an execution environment for highly configurable Rollups, and its fuel is powered by a highly optimized Rollup design.
Core Features:
FuelVM: Fuel introduces the new FuelVM, which supports efficient transaction processing and built-in security measures to go beyond the limitations of EVM. FuelVM adopts a global shared memory architecture, and all contract calls can share global memory, realizing cross-contract data transfer without storage space. FuelVM allows users to specify the contracts involved in the transaction, so that the virtual machine can process other transactions while executing non-contentious state access transactions, realizing fully parallel processing. In addition, FuelVM supports the 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.
Modular blockchain structure
Fuel is used as an execution layer in conjunction with other blockchain layers such as Ethereum and Celestia, and can be flexibly configured, such as an optimistic rollup on Ethereum. This modular multiple blockchain configuration enhances its flexibility and scalability.
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 accounting model. In the UTXO model, there is no concept of wallets or accounts. Each UTXO represents a certain number of tokens. The purpose of the transaction is to consume previously created UTXOs and create new UTXOs. Fuel's UTXO model is more general. 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 by building a strict access list to ensure that the execution order of transactions complies with the specification, thereby improving transaction processing efficiency.
Parallel processing: Through strict access lists, Fuel allows independent transactions to be processed in parallel, greatly improving throughput.
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 high-computing Fuel environment. Sway inherits Rust's syntax, enabling developers to write secure 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, testing infrastructure, and a block explorer to support developers using Sway.
Scripts and predicates: Fuel supports scripts and predicates, allowing multiple contracts to be called in a single transaction and conditionally determining the availability of UTXO, thereby reducing state bloat.
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 borrowed the principles of mature mechanisms such as 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 based on the Fuel network, aiming to revolutionize financial services through its comprehensive suite of services. Spark v1 introduced a multi-collateral cross-margin system, supported deposits of multiple assets, and implemented a complex clearing protocol to ensure trading flexibility and risk management. Spar supports long-term and short-term perpetual contracts with up to 2000 TPS, provides a comprehensive SDK and API, supports non-custodial interactions with order books, and promotes integration and innovation. The Fuel network enables Spark to leverage its high throughput and security to implement complex financial services.
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 returns while creating a fair environment where small and medium-sized enterprises (SMEs) and entrepreneurs can thrive. Fuel, as a modular execution layer, provides Acumen with blockchain infrastructure, ensuring the performance and security of the Acumen platform when processing large amounts of debt and asset tokenization transactions.
Thunder is an NFT marketplace that allows batches of transactions to be completed in a single transaction with minimal fees. For experienced NFT traders, this marketplace looks to be a more seamless trading experience, with fast transactions possible through parallelization.
In preparation 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-Deposit Smart Contract on Ethereum before the Fuel Mainnet launches. After depositing assets, participants will receive Fuel points every day based on the USD value of the deposited assets.
Participants receive between 1.5 and 3 points per day for each dollar of asset value deposited, depending on the type of asset deposited. For example, when depositing ETH, users receive 1.5 points per day for every $1 of ETH deposited. The dollar value of the asset is determined hourly by a price oracle (such as the DeFiLlama API), and points are calculated based on that value. For example, if a user deposits 1 ETH when the ETH price is $3,500, the user will receive 3,500 × 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. The 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 the pre-deposited assets to the mainnet within 14 days of release, otherwise the points will be confiscated.
In general, Fuel can be regarded as a project worthy of attention from long-term investors, especially with the support of capital, the application of the new Layer-2 token model, and the launch of the mainnet. Fuel's ecological development and continuous funding plan have made its ecosystem full of new ideas and creativity, and it has been 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 competition market still needs time to verify. Let us continue to pay attention to future developments.