EVM stands for Ethereum Virtual Machine. It powers Ethereum smart contracts. Once smart contracts arrive, Kaspa will be able to run Ethereum dApps better than Ethereum itself with EVM-Compatibility.

Kaspa is designed for speed and scalability, using a unique structure called a blockDAG (Directed Acyclic Graph) instead of a traditional linear blockchain like Bitcoin or Ethereum. This allows Kaspa to process transactions much faster, you already know this part, while maintaining a proof-of-work (PoW) consensus mechanism for security, also that means Kaspa doesn’t natively support smart contracts or any kind of programmable functionality. EVM is essentially the engine that powers Ethereum’s smart contracts. It’s a virtual environment that runs code (written in languages like Solidity). Smart contracts enable applications (dapps) think DeFi platforms, NFTs, or automated agreements/lending protocols) which have driven Ethereum’s massive ecosystem.

Given the success of EVMs, many blockchains have adopted EVM compatibility because it allows developers to easily port over Ethereum-based dApps and tap into an existing pool of tools and code. Coming back to Kaspa - Kaspa’s native L1 doesn’t have this programmability built in. It’s lean and focused on being a fast, secure and decentralized layer, but to expand use cases Kaspa will benefit massively from Layer 2 solution such as Igra labs that adds features like smart contracts. This is where EVM comes in. An EVM-compatible Layer 2 on Kaspa would mean adding a separate layer that can run Ethereum-style smart contracts while still leveraging Kaspa’s fast and secure L1 for transaction processing and settlement (in Igra’s case - Based Rollups for sequencing / proposing) You know to grow Kaspa’s ecosystem speed alone isn’t enough. Developers and users want functionality—things like decentralized finance (DeFi), token creation, or supply chain tracking—which require smart contracts.

Without them, Kaspa risks being limited to a niche, even with its impressive transaction throughput. By integrating EVM on an L2, Kaspa could attract developers who already know how to build on Ethereum, letting them bring their dApps to Kaspa with minimal changes. This “plug-and-play” aspect is huge because it lowers the barrier to entry and taps into Ethereum’s massive developer community. Second, EVM compatibility could make Kaspa interoperable with other EVM-based chains (like Polygon, Arbitrum, or BNB Chain). This means assets and applications could move more easily between Kaspa and these networks, boosting its ecosystem. (Source: @XXIM via X: https://x.com/xximpod/status/1895443476508299739)

EVM image from ETH website: https://x.com/KaspaFacts/status/1895420949140520977