FuelVM

FuelVM is a deterministic, register-based virtual machine designed from the ground up to execute smart contracts on the Fuel blockchain, a modular execution layer. Its primary architectural goal is to overcome the limitations of traditional blockchain VMs, such as the Ethereum Virtual Machine (EVM), by enabling parallel transaction execution and providing a more efficient instruction set. This design allows Fuel to scale transaction throughput significantly while reducing computational overhead and associated costs.

At its core, FuelVM introduces several key innovations. It uses a UTXO model similar to Bitcoin, which natively supports parallel processing by allowing non-conflicting transactions to be validated simultaneously. The VM's register-based architecture, as opposed to a stack-based one like the EVM, allows for more efficient computation and reduced gas costs for complex operations. Furthermore, FuelVM features predicate contracts, a lightweight form of smart contract used for simple state validation, which can be executed off-chain to further optimize performance.

For developers, FuelVM offers enhanced flexibility and safety. It supports multiple cryptographic primitives beyond the EVM's standard, provides stricter control over asset handling to prevent common vulnerabilities, and uses Sway as its native smart contract programming language. Sway's syntax is similar to Rust and is specifically optimized for the FuelVM, enabling developers to write secure, high-performance decentralized applications (dApps) that can leverage the network's parallel execution capabilities for superior scalability.

The Fuel Virtual Machine (FuelVM) is a purpose-built, deterministic state machine that executes smart contracts and processes transactions for the Fuel blockchain, engineered to maximize throughput by leveraging parallel execution and a UTXO-based data model. Unlike account-based VMs like the Ethereum Virtual Machine (EVM), the FuelVM operates on a set of unspent transaction outputs, allowing it to deterministically identify which transactions are independent and can be processed simultaneously. This architectural foundation is key to Fuel's scalability proposition, enabling block-space efficiency and high computational capacity.

At its core, the FuelVM utilizes a register-based design, contrasting with the stack-based approach of the EVM. This design choice reduces the number of operations and state accesses required for complex computations, leading to more efficient execution and lower gas costs. The VM executes a custom, low-level instruction set called Fuel Assembly (FuelASM), which provides fine-grained control over resources. Smart contracts are typically written in Sway, a Rust-like domain-specific language that compiles down to this bytecode, ensuring predictable performance and security.

A critical component enabling parallelization is the FuelVM's strict access of state access lists declared within each transaction. A transaction must explicitly list all the coins, contracts, and state it intends to read from or write to. This declaration allows the block producer to build a directed acyclic graph (DAG) of transactions, where non-overlapping transactions—those with disjoint access lists—are validated and executed in parallel. This model prevents state conflicts and ensures deterministic finalization without the need for complex runtime scheduling or optimistic concurrency control.

The execution environment is deterministic and sandboxed, meaning contract code cannot access external system information (like block time or coinbase address) unless it is explicitly provided as an input. All fees are paid in the base asset of the Fuel chain and are calculated based on the actual computational (gas) and storage resources consumed. The VM's design minimizes overheads and irregular state accesses, making it particularly suited for high-frequency applications such as decentralized exchange order matching, payment channels, and other modular blockchain components requiring maximal performance.

The UTXO-inspired state model is a computational paradigm where the global state of a blockchain is represented as a set of discrete, independent state objects. Unlike the account-based model used by Ethereum, where state is a mutable ledger of balances and storage, each UTXO is an immutable packet of data that can only be consumed once to create new outputs. In FuelVM, these objects are called coins for native assets and contract UTXOs for smart contract state, enabling clear ownership and state isolation. This design is inherently parallelizable because transactions that operate on non-overlapping sets of state objects can be validated and executed simultaneously without conflict.

This model enforces deterministic execution and state finality. A transaction explicitly lists the specific state objects it intends to spend (or input) and the new objects it will create (or output). The virtual machine can therefore validate the entire transaction's logic—including smart contract execution—based solely on this declared input set, independent of the broader chain state. This allows for powerful features like predicate scripts, which are pure functions that can validate conditions for spending an output without requiring a full contract call, enabling trustless off-chain interactions and advanced scripting capabilities.

The architecture provides significant performance and scalability advantages. By treating state as discrete objects, the FuelVM can leverage strict access lists where a transaction's validity is bounded and known in advance. This eliminates the need for a global state lock, enabling block-level parallel transaction execution. Furthermore, the model naturally supports state minimization; only the UTXOs referenced in a block need to be accessed and verified, reducing I/O overhead. This design is a key enabler for Fuel's high-throughput capabilities, making it particularly suited for applications requiring massive transaction volume, such as decentralized exchanges or high-frequency trading platforms on a rollup.

The FuelVM is a high-performance, deterministic virtual machine engineered from the ground up to enable parallel transaction execution within a blockchain's state model. Unlike the sequential execution model of the Ethereum Virtual Machine (EVM), the FuelVM is built with a strict-access list paradigm, allowing it to deterministically identify which parts of the state (e.g., specific accounts or smart contracts) a transaction will read from or write to before it is executed. This capability is the cornerstone of blockchain parallelization, as it allows non-conflicting transactions—those that do not touch the same state—to be processed simultaneously, dramatically increasing throughput and reducing latency.

At its core, the FuelVM achieves this through a UTXO-based state model, similar in concept to Bitcoin but extended with smart contract functionality. Each transaction explicitly declares its inputs and outputs, creating a clear, acyclic dependency graph. This design allows a block's transactions to be analyzed for conflicts before execution. Transactions with independent inputs can be run in parallel across multiple CPU cores, while those with overlapping dependencies are processed sequentially. This approach maximizes hardware utilization and is a key differentiator from account-based VMs, where state dependencies are often only discovered during execution, forcing a single-threaded process.

The architecture also introduces several technical innovations for developers, including native support for predicates (pure, stateless verification scripts), a more efficient 64-bit word size, and a redesigned fee market that separates computation from state access. These features reduce overhead and enable more predictable gas costs. By moving away from EVM compatibility, the FuelVM sacrifices direct interoperability for a specialized design that prioritizes scalability and deterministic parallelism, making it a foundational component for high-throughput blockchain applications requiring low-cost, concurrent transaction processing.