The Future of Sovereign Execution: Why Appchains Need Dedicated Smart Contract Layers

Forcing all appchains to use the EVM sacrifices performance and design flexibility for compatibility. It's a one-size-fits-none approach that bottlenecks innovation.

• Performance Ceiling: Inherits EVM's ~100ms block times and synchronous execution limits.
• Economic Leakage: Gas fees and MEV are captured by the base layer's validators, not the appchain.
• Design Constraint: Cannot implement novel VM features like parallel execution or custom state models.

A purpose-built Virtual Machine allows an appchain to define its own execution semantics, optimizing for its specific use case.

• Parallel Execution: Architectures like Solana's SVM (Sealevel) enable ~50k TPS by processing non-conflicting transactions simultaneously.
• Custom Fee Markets: Implement application-specific gas schedules and priority fee auctions to manage congestion.
• Enhanced Security: MoveVM's resource-oriented model provides built-in protection against reentrancy and overflow bugs common in EVM.

Even on EVM-based chains, sovereignty is achieved by embedding critical logic directly into the client as precompiles or via hook architectures like Cosmos SDK modules.

• Native Performance: Precompiles execute complex operations (e.g., cryptographic proofs) at ~1/100th the gas cost of a smart contract.
• Protocol-Enforced Logic: Hooks allow the chain to execute custom code at key lifecycle events (begin/end block, pre/post transaction).
• Examples: dYdX v4's orderbook matching engine and Osmosis' concentrated liquidity AMM are client-level modules, not contracts.

Relying on a shared sequencer network (e.g., Espresso, Astria) for execution ordering reintroduces the very liveness risks and MEV leakage that sovereignty aims to solve.

• Liveness Risk: Your chain halts if the shared sequencer fails or is censored.
• MEV Leakage: Transaction ordering rights—and the value extracted—are outsourced.
• Latency Overhead: Adds an extra network hop before execution, increasing finality time.

Full sovereignty requires a vertically integrated stack where the appchain controls transaction ordering, execution, and proof generation.

• End-to-End Control: Own the sequencer to guarantee liveness, implement custom ordering rules, and capture 100% of priority fees.
• Optimistic or ZK: Pair with a fraud proof system (OP Stack) or a dedicated zk-prover (Risc Zero, SP1) for secure bridging to Ethereum.
• Example: Arbitrum Nitro chains demonstrate this model, with each chain running its own sequencer and prover.

The next evolution moves beyond transaction execution to fulfilling user intents, abstracting complexity through specialized solvers.

• Declarative Transactions: Users specify a desired outcome (e.g., 'best price for 100 ETH to USDC'), not a step-by-step path.
• Solver Networks: A competitive market of solvers (like in CowSwap, UniswapX) finds the optimal execution path across venues.
• Sovereign Advantage: An appchain can host a native solver network, capturing the solver fees and ensuring execution aligns with protocol rules.

Running on a shared VM like the EVM forces your app to compete for blockspace with every other dApp, creating unpredictable costs and performance. This is a fundamental misalignment for high-throughput or specialized applications.

• Uncontrollable Latency: Your user's tx competes with the latest memecoin, causing ~500ms to 10s+ delays.
• Cost Volatility: Base fees spike 10-100x during network congestion, destroying UX and unit economics.
• Inflexible Design: You're locked into the host chain's VM, data structures, and fee market.

A dedicated smart contract layer (e.g., a custom VM or optimized runtime) that an appchain sovereignly controls. Think FuelVM, MoveVM, or a Cosmos SDK module. This is the core differentiator from a generic rollup.

• Deterministic Performance: Guarantee sub-100ms finality and stable, predictable gas costs for your users.
• Custom State Models: Build with purpose-built data structures (e.g., UTXOs for gaming, parallel execution for DeFi).
• Full Revenue Capture: Your chain's execution fees and MEV flow directly to your protocol's treasury and validators.

The winning architecture separates settlement, data availability, and execution. Your SEE is the execution client. This is the Celestia + EigenLayer + FuelVM or Avail + Polygon CDK + Move model.

• Leverage Specialized DA: Use Celestia or EigenDA for ~$0.001 per MB data, making state growth cheap.
• Choose Your Prover: Opt for a RISC Zero zkVM for privacy or a gnark-based prover for speed.
• Interoperability via Intents: Connect to the broader ecosystem via intent-based bridges like Across and aggregation layers like UniswapX.

Value in crypto accrues to points of control and scarcity. A generic L2 is a low-margin commodity; an appchain with a dominant SEE captures its entire economic vertical. Look at dYdX v4 and its Cosmos-based chain.

• Protocol-Owned Liquidity: Native issuance and fees bootstrap $100M+ TVL without mercenary capital.
• Sustainable Moats: Your optimized runtime and developer tools become a defensible ecosystem.
• M&A Target: A successful SEE is a prime acquisition for larger ecosystems seeking vertical integration (e.g., an L1 acquiring a gaming-specialized chain).