What is EVM Blockchain?

| January 9, 2024

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EVM Blockchain

The Ethereum Virtual Machine (EVM) stands at the core of the Ethereum network. It is a groundbreaking open-source platform reshaping the blockchain technology landscape. Although initially designed for the Ethereum network, its significance extends beyond its native environment. Presently, numerous blockchain networks aspire to achieve EVM compatibility, drawn by its flourishing ecosystem of developers and decentralised applications (dApps).

The Ethereum Virtual Machine (EVM) serves as the dedicated runtime environment for Ethereum’s smart contract. It is designed to be sandboxed and isolated from other system components. This ensures that no operation within the EVM impacts your data or programs, regardless of how frequently a specific function is invoked.

The blockchain EVM is the runtime environment responsible for executing Ethereum smart contracts, utilising Ethereum’s Turing-complete scripting language, Solidity. To fulfil the execution of this code, the Ethereum Virtual Machine (EVM) comes into play. Positioned atop the Ethereum network, it operates in a manner that ensures consensus among all nodes regarding the code to be executed at any given moment.

Key Points to Remember:

  1. Ethereum’s Turing completeness distinguishes it from other blockchains, such as Bitcoin. This characteristic allows Ethereum to execute arbitrary logic, enhancing its versatility and functionality.
  2. Ethereum is not the sole EVM-compatible blockchain; several Layer 1 (L1) and Layer 2 (L2) chains share this compatibility. This feature facilitates seamless migration, contract deployment, and token transfers between various chains. Notable examples include Polygon, BNB Smart Chain, Avalanche, and more.
  3. The EVM plays a pivotal role in enabling developers to deploy decentralised applications (dApps) on the Ethereum network. This emphasis on decentralisation underscores Ethereum’s commitment to fostering a distributed and secure ecosystem for diverse applications.

What is an EVM-Compatible Blockchain?

An EVM-compatible blockchain serves as the backbone of the Ethereum blockchain, simplifying the development of decentralised applications and smart contracts while standardising wallet usage. As technological advancements unfold and the web3 blockchain progresses, the EVM blockchain is emerging as the preferred standard for developers.

Explaining the Ethereum Virtual Machine (EVM)

The Ethereum Virtual Machine (EVM) plays a pivotal role in the Ethereum blockchain ecosystem, functioning as the operational environment for running smart contracts and decentralised applications (DApps). Serving as a decentralised computing entity, the EVM chain operates across the global network of Ethereum nodes. Its primary responsibility is to process and execute code scripted in Ethereum’s native language, Solidity, or other compatible programming languages.

Fundamentally, the EVM is a Turing-complete, isolated execution environment. Its Turing completeness implies the capability to theoretically execute any computation, offering a versatile foundation for the development of diverse DApps. The EVM blockchain’s isolated nature ensures secure code execution, safeguarding the entire network against potential malicious threats. Ethereum developers compile their smart contracts into bytecode, which becomes immutable upon deployment on the blockchain, ready to be executed by the EVM.

Users and DApps engage with the EVM-based blockchain by transmitting transactions containing executable code to Ethereum addresses. These transactions prompt the EVM to execute the code, enabling interactions with and modifications to the Ethereum state (the distributed ledger). This mechanism facilitates the creation of decentralised applications with functionalities ranging from decentralised finance (DeFi) to non-fungible tokens (NFTs) and more.

The decentralised and deterministic execution of the EVM ensures that all nodes within the Ethereum network achieve consensus on the state changes resulting from these transactions. This process upholds the integrity and trustworthiness of the blockchain, establishing a reliable foundation for the Ethereum ecosystem.

Key terminologies in EVM and Their Functions

Smart Contract Components: These components, often referred to as “Uncles,” represent small fragments of smart contracts or data that reside on the blockchain. This feature proves valuable as it enables the storage of metadata about a program, enhancing the versatility of data management within the Ethereum ecosystem.

Actions: Fundamental operations applicable to assets stored in memory, excluding actions directly on the blockchain. Examples include multiplication and addition.

Balance: Signifies the amount of Ether an entity possesses at any given time. While not a variable, it serves as a memory section where the EVM-based blockchain stores data. Attempts to modify or read from it result in an error.

Block: Immutable storage capturing all actions and transactions related to Ethereum until the current block. With a fixed limit of 65,000 blocks, this structure remains constant.

Blockhash: A hash representing a specific block. Useful for referencing data stored under a different name on the blockchain.

Block Number: Indicates the position of the block in the blockchain. Beginning from zero, the block number increments with each newly added block, and associated timestamps reveal the time elapsed between two blocks.

Code: Executable blockchain EVM code determines actions when certain inputs occur, such as money transfers.

CodeHash: A hash representing the code itself, visible when inspecting a contract on platforms like Etherscan. This hash changes as functions execute, reflecting alterations based on inputs.

CodeSize: The actual size of the code measured in bytes.

GasLimit: An EVM blockchain component allowing users to specify the amount of gas they are willing to expend for an execution. If this number is zero, no action takes place, although such occurrences are rare.

How EVM Works

The Ethereum Virtual Machine (EVM) is a crucial component that executes scripts, carrying out specific operations within the Ethereum blockchain. It acts as a program facilitating the creation of new tokens on the Ethereum Blockchain. In the context of EVM-compatible blockchains, a script refers to a set of instructions or an algorithm that guides the computer on proper functionality. Access to any network node is a prerequisite for executing desired commands and seamlessly generating new tokens on the blockchain.

In the Ethereum ecosystem, smart contracts play a pivotal role, embodying computer code designed to enable the exchange of money and information. The Ethereum Virtual Machine provides a Turing-complete environment for executing these scripts and smart contracts, allowing any computation feasible on a computer to run on the EVM chain. Serving as the foundation for decentralised applications (DApps), the blockchain EVM ensures the correct and expected execution of transactions and smart contracts on the Ethereum blockchain, aligning with the predetermined logic set by the smart contract creator.

The Ethereum Virtual Machine consists of two integral parts. Firstly, the EVM, which is responsible for running Solidity’s source code, is written in C++ and utilises LLVM as its compiler. It offers a comprehensive virtual machine with features essential for a general-purpose Smart Contract Virtual Machine, supporting multiple programming languages, security features, runtime environments, and the ability to write custom EVM chain bytecode. Secondly, “Uncles” are small components storing smart contracts or data on the blockchain, providing a means to store metadata about programs. Additionally, blockchain EVM Assembly, the bytecode of the EVM blockchain, serves as a programming language for developers in the Ethereum ecosystem. In essence, the Ethereum Virtual Machine simplifies the creation and execution of DApps on the blockchain.

Advantages of EVM-Compatible Blockchains

EVM-compatible blockchains offer several advantages to developers engaged in crafting smart contracts and constructing decentralised applications (dApps):

Interoperability: Smart contracts and dApps formulated for one EVM-compatible chain, such as Ethereum, can be seamlessly transferred to other EVM-compatible chains, like Polygon, with minimal adjustments to the code.

Costs: The EVM establishes a standardised environment for writing smart contracts and developing dApps. This allows developers to write code once and deploy it on any EVM-compatible blockchain, eliminating the need for separate codebases for each chain. The use of Solidity, a widely adopted programming language for Ethereum, further reduces the learning curve across EVM-compatible blockchains.

Developer Ecosystem: Since dApps on EVM-compatible blockchains inherently operate on the Ethereum network, they gain access to its extensive user base of over 100 million unique wallets. This integration simplifies the process of achieving mass adoption for web3 applications built on EVM-compatible blockchain networks.

Decentralised Applications and Financial Systems on EVM Chains

The ongoing advancement of web3 emphasises the extensive utilisation of decentralised applications, particularly in the realm of decentralised finance (DeFi) exchanges and stablecoins. This necessitates swift transactions at reduced costs. The emergence of EVM-compatible layer-2 scaling solutions adds further value to the blockchain EVM’s adaptability.

An EVM blockchain operates in a decentralised manner, supported by a network of contributing computers or nodes. This decentralised structure ensures transparency and immutability, implying that once data is recorded on the blockchain remains unalterable and irremovable. This characteristic establishes a trustless environment for participants, thereby enhancing the overall security of the system.


In summary, EVM-compatible blockchains offer significant advantages by prioritising scalability and efficiency, all while being integrated into the Ethereum network and harnessing its full range of capabilities.

The EVM’s establishment of a standardised environment for decentralised applications (dApps) ensures that any application developed on an EVM-compatible blockchain is not only optimised for portability but also interoperable with other EVM networks. This interoperability facilitates seamless access to the expansive Ethereum ecosystem for all dApps constructed on these blockchains.

More on Crypto

As we continue constructing a fully regulated digital asset custody platform, ensuring secure storage for both crypto and fiat assets remains a critical priority. 

To facilitate the last checkpoint of enabling institutions to convert their digital asset treasury into fiat currency, we’re expanding beyond pure wallet infrastructure and integrating seamless fiat off-ramp capabilities for our partners.

We’re thrilled to announce our partnership with Encryptus, licensed and compliant off-ramp solutions tailored for institutional clients. This collaboration elevates Liminal’s service offerings by empowering our partners to convert their digital asset treasuries into fiat currencies efficiently.

Integrating A Seamless Off-Ramp Solution

The digital asset ecosystem historically faced friction points when transitioning between fiat and cryptocurrencies. Off-ramp solutions address this pain point by enabling efficient and streamlined conversion between asset classes, minimising value loss and simplifying compliance processes.

Here’s how off-ramp changes the game:

  • Reduced Friction: Frictionless conversion minimises delays and operational complexities associated with traditional fiat-crypto exchange methods.
  • Enhanced Efficiency: Streamlined workflows expedite asset conversion, increasing speed and cost-effectiveness for institutional and individual users.
  • Optimised Value Preservation: Advanced off-ramp solutions prioritise minimising price slippage and value loss during conversion, protecting user portfolios.
  • Simplified Compliance: Integrated compliance features navigate regulatory complexities, ensuring adherence to relevant financial regulations.

With our partnership with Encryptus, we have embedded their institutional-grade APIs, connecting their off-ramp solution within Liminal’s wallet and custody platform. 

This integration simplifies our clients’ liquidation requirements while keeping their assets secure and more:

  • Effortless Digital Asset to Fiat Conversion: Our partners will be able to access treasury management and facilitate business payments in 54 countries and individual payments in an extensive network of 80+ countries.
  • Streamlined Compliance and Regulation: Our partners will be able to leverage Encryptus’s rigorous licensing and compliance framework, ensuring adherence to stringent financial regulations.
  • Enhanced Platform Value: We will be able to expand the functionality of the Liminal custody solution, attracting institutional users seeking comprehensive digital asset management capabilities.

Moving Towards A Robust Off-Ramp Partnership With Encryptus

The partnership between Liminal and Encryptus earmarks a significant step forward in secure digital asset custody, representing a shared commitment to pushing compliant practices while supplying institutions with easy access to convert their digital assets to fiat. 

For Encryptus, the opportunity to integrate with Liminal’s established platform presents a chance to reach a wider audience and scale their innovative off-ramp solutions to new heights. By streamlining fiat conversion within Liminal’s secure custody infrastructure, Encryptus gains access to a trusted network of institutional users seeking seamless and compliant treasury management.

For Liminal, this collaboration reinforces our dedication to partnering with companies that demonstrably prioritise clear governance and robust policy frameworks. By aligning with Encryptus’s stringent compliance standards, we reaffirm our commitment to building a secure and sustainable future for digital assets, where trust and regulatory certainty go hand-in-hand.

January 22, 2024

Hello world, it’s that time of the month when we share the biggest security breaches in the world of Web3 through our Security and Regulatory Newsletter. 

Liminal believes in optimizing security and custody practices globally across the Web3 industry. Through our Newsletter, we highlight security, regulations, and compliance incidents that have happened in the past month and how one can follow better Security practices to safeguard their digital assets. 

We will also highlight regulatory changes that might have happened globally, which were significant to the overall ecosystem.

Dive in and get a detailed analysis of everything security and regulation in the domain of web3 with Liminal’s Monthly Security and Regulatory Newsletter.

Web3 Security Compromises in January

Abracadabra exploited for almost $6.5 million, Magic Internet Money stablecoin depegs

The Magic Internet Money ($MIM) stablecoin has lost its dollar peg again, dipping all the way below $0.77 in a flash crash before returning to around $0.95.

The depeg appears to be related to an exploit of the Abracadabra lending protocol, which allows people to borrow $MIM. An attacker exploited an apparent flaw in the platform’s smart contracts to drain around $6.5 million.

Goledo Finance hacked for $1.7 million

Goledo Finance, an Aave-based lending protocol, was exploited through a flash loan attack. The attacker stole assets estimated by CertiK to be around $1.7 million.

Goledo Finance contacted the attacker to offer a 10% “bounty” for the return of the remaining assets. In a message on January 29, the attacker wrote: “I hacked Goledo and want to negotiate.”

Socket service and its Bungee bridge suffer $3.3 million theft

The Socket cross-chain infrastructure protocol was hacked for around $3.3 million in an attack that exploited its Bungee bridge. The thieves were able to exploit a bug that allowed them to take assets from those who had approved a portion of the system called SocketGateway.

A little over 700 victims were affected, and the highest loss from a single wallet was around $657,000. 121 wallets lost assets priced at more than $10,000.

On January 23, the protocol announced they had recovered 1,032 ETH (~$2.23 million) of the stolen funds.

Web3 Regulatory Practices for January

The EU Imposes Stricter Due Diligence Rules for Crypto Firms

On Jan. 17, the European Council and the Parliament came to a provisional agreement on parts of the Anti-Money Laundering Regulation (AMLR) that now extends to the crypto sector.

Under the new rules, cryptocurrency firms will be required to run due diligence on their customers involving a transaction amounting to €1,000 ($1,090) or more. 

However, the agreement isn’t final yet as it has to be first officially adopted by the Council and Parliament before the rules can be applied.

So, after the EU passed its landmark MiCA regulation last year, which clarified rules about cryptocurrencies, regulators are now targeting the space with tighter controls. 

While these regulations bolster security and trust in the crypto market, potentially attracting more cautious investors and combating financial crimes, they also present challenges. 

The US State of Virginia Introduces Digital Assets Mining Rights

Recently, the Virginia State Senate introduced Bill No. 339, which outlines regulations for the transactions and mining of digital assets and their treatment under tax laws. 

The legislation exempts individuals and businesses engaged in crypto mining activities from obtaining money transmitter licenses. Additionally, it protects miners from any discrimination. 

Issuers and sellers of crypto are also exempted from securities registration requirements if certain conditions are met. Moreover, those offering mining or staking services are not to be classified as “financial investment” but must file a notice to qualify for the exemption.

The bill further incentivizes crypto’s use for everyday transactions by offering tax benefits. Under this, up to $200 per transaction can be excluded from an individual’s net capital gains or gains derived from using crypto to purchase goods or services, starting from Jan. 1, 2024.

Key Takeaways:

  • Hackers continue to exploit vulnerabilities in DeFi protocols and cross-chain bridges, highlighting the need for robust security measures.
  • Regulatory frameworks are evolving rapidly, with stricter AML rules and supportive legislation for emerging technologies like crypto mining.
  • Staying informed about these developments is crucial for navigating the digital assets market safely and responsibly.

Stay #LiminalSecure

These events highlight the constant evolution of Web3 security and regulation. You can confidently navigate this dynamic landscape by staying informed and prioritizing security best practices. 

At Liminal, we’re committed to empowering institutions to unlock the full potential of digital assets without compromising security or compliance norms with our robust custody and wallet infrastructure solutions. Join us on this journey towards a safer, more accessible future for digital assets.

January 15, 2024

Buckle up as we’re about to take a trip down memory lane. 

The year 2023 was a wild ride that showed signs of a plummeting market, groundbreaking innovation and regulatory hurdles. 

Contrastingly, in the same year, we saw no market-shattering crashes. Financial institutions extending an olive branch, key jurisdictions unlocking the doors to blockchain technology. 

Simultaneously, at Liminal, we experienced significant breakthroughs, re-engineering our positioning and becoming a pioneer in digital asset security with bank-grade custody. 

We took major strides this year, right from building comprehensive products to becoming a qualified custodian, from revamping our brand design to expanding our offices in newer locations, from partnering with hyper-local communities to onboarding a diverse set of clients,  we did it all. 

So, let us take you through everything we accomplished in 2023 and what the future holds.  

Liminal Became A Qualified Custodian

One of the prominent moves we made this year was to change our positioning as a regulated custodian from being a wallet infrastructure platform. 

We got two licenses in key jurisdictions to operate as a regulated custodian. 

The first one came from Hong Kong, where we acquired the TCSP license issued by the SFC, which oversees and regulates financial activities to ensure compliance with legal and regulatory obligations. 

Our next license came in the MENA region, where we got In-Principle Approval for the FSP license granted by the FSRA, a governing body in ADGM, to establish a progressive financial services environment. 

Both these licenses paved the way for Liminal to push its wallet infrastructure and offer bank-grade custody to institutions looking to operate in these particular regions. 

Liminal Introduced A Suite of Products & Features

Continuing our building spree, we launched new products and integrations to broaden the existing infrastructure and added more parameters of security, scalability and sustainability. 


Liminal launched staking for institutions to eliminate the risks involved in running staking nodes and the vulnerabilities in hot wallet transfer. 

Hence, we introduced an industry-first mechanism of cold wallet staking to ease staking for institutions and secure assets explicitly.  

Whitelabel Solution

Accelerating the go-to-market time for organisations looking to build a secure and customisable application, Liminal launched its whitelabel solutions

Targeted to help organisations meet security standards, manage assets with maximum control, and add their custom branding to give it a personal touch. Our whitelabel solution is a first-in-class custodian-developed solution for institutional grade custody.

Smart Consolidation

We are building not just secure custody but also automation-based features to eliminate manual errors, increase the throughput of transactions and scale institutional wallets. 

Taking this ahead, we launched the Smart Consolidation feature to automatically calculate all the active addresses and consolidate them into a single address. With this level of automation, managing multiple addresses becomes uber easy for wallet teams. 

Travel Rule 

To limit the use of cryptocurrencies for activities like money laundering and terror financing by regulatory bodies, travel rule was mandated for institutions to follow. 

Continuing the latest compliance integration policy, Liminal partnered with Notabene to introduce Travel Rule, enabling institutions to manage counter-party risk and extend the process of due diligence right from the Vaults dashboard.   

Liminal Accured List Of Security Certifications

Following our ISO certification for data privacy and risk management, we added two new security certifications to fortify our systems and build trust for our clients. 

Liminal Achieves Crypto’s Highest Security Mark: CCSS Level-3 Certified

Cryptocurrency security lacked a gold standard, creating a vulnerable ecosystem. Enter the CryptoCurrency Security Standard (CCSS), setting the bar for auditing and certifying custodian infrastructure and establishing levels of trust and confidence for investors. 

Liminal became only the second wallet infra platform and the first regulated custodian to be accredited with Level-3 certification, deeming wallets, transfer environments, workflows and engines safe and secure. 

Liminal Reciueved SOC 2 Type II Certification

To tackle threats in institutional-grade security, organisations’ SOC has been identified as the primitive compliance standard for service organisations to handle customer data.

Liminal successfully attained SOC 2 Type II certification, validating its setup of security controls & compliance processes to be industry standard. 

Liminal Level Up

Liminal unveiled its most significant platform upgrade ever, revolutionising the future design standard of a qualified custodian. This level-up activity included revamping our website and product UI, giving a completely new look and feel to not “Liminal” but “Liminal Custody”. 

The Liminal level-up activity was a strategic step and the biggest one for us this year to create an intuitive, inviting and tailored experience for our clients. 

Liminal Reached New Borders

We spread out our operations this year, reaching new borders and onboarding a new wave of institutions across gaming, DeFi, HNI wealth, treasuries, and exchanges! From Indonesia and Africa to India, UAE, and Korea, we are setting up custody operations worldwide. 

This isn’t just a roster of clients; it’s a network ready to spark connections, collaborations, and shared success to further the definition of secure assets. 

Liminal Collaborated With Law Enforcement Agencies

The best and the proudest moment of Liminal for this year was when we collaborated with CBI & Himachal Prashesh police department to aid them in seizing digital assets. 

This partnership put us on the map, as we became the first point of contact for LEAs in India, and we standardised the process of secure seizure of digital assets. Leveraging our expertise, we enabled a safe space for officers to learn the basics of custody, contributing to a safer digital landscape.

Team Liminal Grew Bigger

Building such a massive infrastructure, prioritising security and compliance over everything else, we had to grow the team to build at pace and expand at an even higher level. Not only did we grow in team numbers, but we also elongated our footprint to new destinations. 

Team Liminal went from 32 to 70 with 5 new offices in Mumbai, Ahmedabad, Hong Kong, Singapore and ADGM, setting up our custody operations steadfastly. 

What’s To Look Out For In 2024

We are excited to announce that our commitment to integrating the most secure digital asset wallets with a cutting-edge custody platform is swiftly becoming a reality. 

The upcoming year, 2024, will serve as a testament to this transformative journey. Moving beyond self-custody, we are constructing a comprehensive infrastructure encompassing both custodial and non-custodial wallets. Exciting products are set to launch starting from the first week of January, some of which are: 

  • Official Custody Platform Launch
  • Liminal’s Off-Exchange Settlement Hub
  • Secure Custody of Real-World ‘Tokenised’ Asset

The Web3 space has evolved explicitly this year, pushing the narrative of secure digital asset custody and security, introducing new regulations and compliance standards, licensing VASP providers and standardising the use of custodians as a trusted third party. 

At Liminal, we took major strides this year, from building comprehensive products to becoming a regulated custodian, from revamping our brand design to building the full infrastructure of custodial and non-custodial wallets.

January 5, 2024

Find Out How You Can Benefit From A Fully Self-Custodial Wallet Architecture