Stellar Sparks Smart Contract Upgrade — And it’s Not an EVM

Validators of the Stellar network have made a significant decision by voting to upgrade the mainnet to "Protocol 20," unveiling the Soroban smart contract platform. This milestone marks a pivotal moment for Stellar, a network renowned for its payment capabilities, as it ventures into the competitive realm of smart contract ecosystems.

The Evolution of Stellar

Since its inception in 2014, Stellar has evolved beyond its origins as a currency platform, showcasing prowess in areas like native stablecoins and partnerships with industry giants like MoneyGram. According to Tomer Weller, vice president of product at the Stellar Development Foundation (SDF), Stellar's infrastructure has long supported fundamental features like payments and decentralized exchanges, but lacked the ability for custom trust-minimized code — until now.

Soroban: A Unique Approach to Smart Contracts

While many blockchain projects have adopted Ethereum's popular EVM or pursued layer-2 solutions, Stellar's Soroban stands out as a bespoke smart contract layer, steering clear of prevailing narratives. This distinctive approach reflects Stellar's commitment to innovation while ensuring minimal disruption to existing stakeholders. By leveraging WebAssembly (WASM) technology and Rust programming language, Soroban sets itself apart, offering simplicity and security in smart contract development.

A Focus on Developer Experience and Interoperability

Soroban's choice of technology not only simplifies smart contract development but also enhances cross-chain interoperability, a crucial feature in today's diverse blockchain landscape. By connecting with EVM-based chains through cross-chain SDKs like Cubist, Soroban opens doors for developers to explore new possibilities in decentralized finance (DeFi) and beyond. Moreover, Soroban draws inspiration from successful projects like Solana, implementing features such as transaction access lists to optimize scalability and concurrency.

Unveiling Soroban's Potential

With Soroban's launch, the possibilities for cross-chain applications are vast, though challenges remain in tooling and developer experience. Despite initial concerns about scalability, Soroban's incremental approach ensures a safe and steady transition, building upon Stellar's existing transaction throughput. As Deian Stefan of Cubist emphasizes, the true potential of Soroban lies in its ability to democratize access to innovative financial instruments, bridging the gap for users unfamiliar with both Stellar and DeFi.

Bridging Traditional Finance with DeFi

The integration of Soroban with existing Stellar infrastructure presents an exciting opportunity to revolutionize traditional finance. By facilitating seamless interactions between Stellar wallets, financial institutions like MoneyGram, and DeFi protocols such as Blend, Soroban aims to democratize access to advanced financial tools. As Weller asserts, Soroban's focus lies not in catering to the "degen" ecosystem, but in empowering individuals who lack access to innovative financial instruments.

Bottom Line

Stellar's adoption of Soroban represents a strategic move towards enhancing its capabilities and expanding its ecosystem. By prioritizing efficiency, interoperability, and user experience, Soroban sets the stage for a new era of innovation within the Stellar network, offering a compelling alternative to existing smart contract platforms. As the journey unfolds, Soroban's true impact on the blockchain landscape remains to be seen, but its potential to bridge traditional finance with DeFi could reshape the future of financial inclusion.