# Runtime

Runtime layer is used to execute smart contracts and other actions created by the users and preserve the state between the executions. It can be described from three different angles: going step-by-step through various scenarios, describing the components of the runtime, and describing the functions that the runtime performs.

## Scenarios

• Financial transaction -- we examine what happens when the runtime needs to process a simple financial transaction;
• Cross-contract call -- the scenario when the user calls a contract that in turn calls another contract.

## Components

The components of the runtime can be described through the crates:

• near-vm-logic -- describes the interface that smart contract uses to interact with the blockchain. Encapsulates the behavior of the blockchain visible to the smart contract, e.g. fee rules, storage access rules, promise rules;
• near-vm-runner crate -- a wrapper around Wasmer that does the actual execution of the smart contract code. It exposes the interface provided by near-vm-logic to the smart contract;
• runtime crate -- encapsulates the logic of how transactions and receipts should be handled. If it encounters a smart contract call within a transaction or a receipt it calls near-vm-runner, for all other actions, like account creation, it processes them in-place.

The utility crates are:

• near-runtime-fees -- a convenience crate that encapsulates configuration of fees. We might get rid ot it later;
• near-vm-errors -- contains the hierarchy of errors that can be occurred during transaction or receipt processing;
• near-vm-runner-standalone -- a runnable tool that allows running the runtime without the blockchain, e.g. for integration testing of L2 projects;
• runtime-params-estimator -- benchmarks the runtime and generates the config with the fees.

Separately, from the components we describe the Bindings Specification which is an important part of the runtime that specifies the functions that the smart contract can call from its host -- the runtime. The specification is defined in near-vm-logic, but it is exposed to the smart contract in near-vm-runner.

## Functions

• Receipt consumption and production
• Fees
• Virtual machine
• Verification