Soroban Smart Contracts and Their Impact on the Stellar Blockchain

The release of the smart contacts platform Soroban on the Stellar blockchain in February 2024 marked the most impactful upgrade in the network’s 10-year history.

Stellar is a decentralized, public blockchain that gives developers the tools to create experiences that are more like cash than crypto  — it has been actively developing since 2014. Built with speed and low costs in mind, the Stellar network provides financial institutions and developers worldwide a platform to issue assets, and to send and convert currencies in real-time, creating real-world utility.

We at Ultra Stellar have been building on the Stellar blockchain since 2015. At the time, we chose Stellar as it excels at moving and exchanging all kinds of money. It is fast, cheap, and efficient, which we feel is a very strong foundation for any kind of financial service looking to make a real-world, lasting impact. 

As we continued building on Stellar, we were closely monitoring the blockchain space for new and popular technologies. Smart contracts emerged early as a critical component of the broader digital assets landscape because of the extended functionality they can offer in any blockchain ecosystem.

Smart contracts are digital agreements that are executed automatically when certain conditions are met. They can be programmed with logic and business rules, so they can provide more complex functions than just transferring data between parties. Smart contracts are agreed to and executed on the blockchain. 

Our team has been interested in developing products based on smart contact technology ever since smart contacts first appeared on the scene on other crypto chains like Ethereum and Solana. The ever-increasing popularity of smart contact-based services like Uniswap, Curve, and Aave always left us wishing to see true DeFi services strive on Stellar.

That’s why the team was very excited when the development of the Soroban smart contract platform for the Stellar network was officially announced in 2022. From day one we started planning how we can leverage smart contacts to enhance our suite of leading Stellar products and bring new unique services to the Stellar ecosystem.

Soroban is a smart contract platform that is integrated into the existing Stellar blockchain. It is an additive feature that lives alongside and doesn't replace the existing Stellar blockchain. Soroban is designed to be a clear, scalable, and developer-friendly solution. Soroban matches Stellar in scale, convenience and accuracy — it can be used by any transaction processor, including other blockchains, L2 and permissioned registries.

Soroban is named after the Japanese soroban, a simple and small abacus that is considered an important symbol of the Japanese business world — and become the "abacus standard" in Japan, and the smart contract system aims to become the same standard in the world of cryptocurrencies.

The transition to the new version of the Stellar network with Soroban support (from v19 to v20) required more than 2 years of technical discussions, hundreds of thousands of lines of code, and more than 150 projects deployed in Testnet. 

In order to preserve the network's performance, security, and stability at this turning point in the evolution of the network, the wider Stellar ecosystem has agreed on the phased approach to Soroban release:

• Phase 0, the initial Soroban launch on Stellar, was aimed at completing the testing first. Developers performed the smoke testing, verified contract performance, and ensured their products were ready to interact with smart contract transactions.  

• Phase 1 increased the transactional and throughput capacity of Soroban. Builders started to deploy contracts in the core network and tested the performance impact of contracts at a larger scale.

• At the full launch in Phase 2 on March 19, 2024, the network now matches the average DeFi transactions for many other blockchains (10 transactions per second). Developers are now able to take advantage of Soroban’s capabilities at full scale. 

• The following phases will be aimed at optimizing and increasing the performance even further.  

The release of Soroban marks the beginning of a new chapter in decentralized finance on the Stellar network. And there couldn't be a better time for such a major release. We're in the middle of a bull market where smart contact chains, DeFi services, and cryptocurrencies in general are as popular and accessible as they've ever been. 

Soroban has come a long way in development and evolution since its initial announcement, and the team at Ultra Stellar loved how easy it was for us to start developing on the platform from the get-go. Stellar Development Foundation (SDF) did an amazing job at evaluating the market needs and listened to the community feedback to make Soroban into the powerful platform it is upon release. 

The Stellar Community Fund, established by SDF to support developers and startups building on Stellar and Soroban, played a crucial role in building the future of decentralized finance on Stellar. To encourage development on Soroban, SDF has committed to investing $100 million into projects leveraging the network’s smart contract capabilities. The fund has supported more than 160 projects, paving the way for one of the biggest smart contact platform launches to date. 

Ultra Stellar team is proud to be among the recipients of the ‘Community’ award in the fund’s program. We will be using our years of experience on Stellar and the new capabilities of Soroban smart contracts to upgrade our suite of products along with the leading product LOBSTR wallet with new major advancements, enhancing user interaction and utility. 

The Stellar Community Fund also fostered the spirit of collaboration in the Stellar community, allowing every Stellar developer to be aware of what others are building on Stellar and Soroban. It helped our team at Ultra Stellar forge new exciting partnerships and collaborations with other ecosystem services which users can expect us to roll out in the coming months. 

Now that Soroban is live, we are looking forward to the major breakthrough in the adoption and popularity of the Stellar network in 2024 and beyond. New kinds of novel products and services not previously possible on the network, like advanced lending products, custom DEXs, AMMs and DAO frameworks, will emerge, sparking network usage and growth.

The new DeFi services and Soroban-powered improvements for popular established platforms are expected to attract a new wave of users to Stellar, boosting the market liquidity and token exchange rates on the network. Ease of use, scalability, low transaction cost, and the Stellar Community Fund support should also attract even more developers from other chains to try Soroban and Stellar, so we should expect more unique projects to be announced this year.

Being the developer of LOBSTR, one of the most popular wallet apps on Stellar, we at Ultra Stellar are working with the developer community to ensure our users can easily access new services coming to the network. One of the major upcoming releases for us is the LOBSTR Signer extension which will enable a new efficient way for users to interact with dApps without compromising the security of their wallets.

With Soroban's release now official, 2024 is about to become the pivotal year for the growth and expansion of the Stellar network. We are very excited about the positive changes that Soroban has already brought to Stellar and can't wait to see how the network evolves in months after the Soroban release.