Monad: The New Star of the Next Generation Layer 1

In today's rapidly evolving blockchain technology landscape, Ethereum, as a pioneer of smart contract platforms, has laid a solid foundation for the entire industry. However, with the surge in application demand, the limitations of existing infrastructures like Ethereum in terms of scalability and transaction speed have become increasingly apparent, posing a bottleneck to industry development. To address these challenges, Monad has emerged, promising to redefine blockchain performance standards with a throughput of up to 10,000 transactions per second.

Recently, Monad Labs completed a $225 million financing round led by Paradigm, highlighting the market's high recognition of Monad's technological potential. This funding will be used to further build and optimize Monad's Layer 1 blockchain, promising to bring revolutionary changes to the industry.

The Birth of Monad: Solving the Ethereum Scalability Problem

Ethereum's position in the blockchain field is unshakeable. It is not only the center of blockchain research, decentralized applications (Dapps), and community development, but also boasts the highest total value locked (TVL), showcasing its leadership in the blockchain world. With the vigorous growth of Ethereum, its developer community has become the largest group in the crypto space, nurturing numerous innovative DeFi and dApp projects.

However, as the number of projects skyrockets, the Ethereum Virtual Machine (EVM) faces unprecedented challenges, particularly the increasingly prominent scalability issues. The single-threaded nature of the EVM limits transaction processing speed and increases execution time. In response to this challenge, the industry has proposed various solutions, among which sharding technology and Layer 2 scaling strategies have received significant attention.

Sharding technology aims to split the blockchain network into multiple smaller shards to improve storage capacity and performance. However, the implementation of this technology requires long-term validation and research, making it difficult to realize its potential in the short term. Layer 2 scaling strategies, on the other hand, handle transactions and smart contract execution by building additional frameworks on top of the main chain, alleviating the burden on the main chain and improving overall network efficiency. However, with some well-known Layer 2 projects postponing the decentralization of sequencers, the challenges of centralization for Layer 2 are becoming increasingly severe.

In the face of these challenges, Monad's founder Keone Hon has put forward unique insights. He believes that there are issues with the current scalability path of Ethereum. The Layer1+Layer2 hierarchical strategy may lead to the blockchain being divided into independent execution environments, undermining composability on the chain. Therefore, establishing a more efficient underlying network is the best solution, which is the origin of Monad.

Monad is a high-performance L1 that is fully compatible with Ethereum, focusing on using "parallel processing" technology at the Layer 1 level to enhance EVM execution efficiency. This means that Monad implements transaction parallel processing directly on the main chain without relying on additional Layer 2 solutions. This approach maximizes EVM processing power and scalability without sacrificing security and decentralization, thereby fully unleashing the potential of the EVM ecosystem. Currently, Monad has achieved the ability to process 10,000 transactions per second, and the project team is confident that this number will increase tenfold in the coming years.

Since its founding in 2022, Monad has completed two rounds of financing, including a $19 million seed round in February 2023 and $225 million in April 2024. Currently, more than 50 institutions are participating in the investment in Monad. These investors are confident about Monad's prospects, believing it will drive the adoption of cryptocurrency in the next 2-3 years. A founding partner of an investment institution views Monad as a solid foundation for stablecoins, calling it a "killer application," and expects it to continue to grow exponentially in the coming years.

Technical Advantages of Monad: Underlying Optimization and Parallel Strategies

Monad is favored primarily due to its outstanding technical advantages. It has not chosen to enhance scalability through layer2 solutions, but instead focuses on the underlying basic network, improving network efficiency through parallel execution strategies. The biggest advantage of this approach lies in maintaining the security and decentralization of the network, which is crucial for the future development of Monad.

In terms of performance, Monad directly competes with several established layer 1 public chains, showing significant advantages in throughput and low finality time, far surpassing many other platforms. More importantly, while ensuring high performance, Monad has also achieved full compatibility with EVM, allowing Ethereum developers to easily port their applications to Monad.

With the three core advantages of decentralized aggregation, high scalability, and Ethereum compatibility, Monad is poised to become a game changer in the future of the blockchain space.

The working mechanism of Monad

Monad achieves its efficient operation through optimizing four core areas: MonadBFT, lazy execution, parallel execution, and MonadDB.

MonadBFT is the core of the Monad consensus algorithm, drawing on the essence of classical consensus algorithms while innovating. It adopts a two-round leader-centric fan-out and fan-in approach, ensuring quick confirmation and finality for the blockchain while reducing communication overhead and latency.

The delayed execution mechanism separates consensus from execution, allowing nodes to quickly agree on the order of transactions without having to wait for the execution of transactions to be completed. This approach greatly improves resource utilization efficiency, enabling Monad to handle more transactions.

Parallel execution achieves concurrency through optimistic execution, where the Monad optimistically handles transactions to determine dependencies. This approach can reveal the dependencies between transactions and enable efficient re-execution, further enhancing transaction throughput.

MonadDB is a database developed by Monad, optimized for native compatibility with the Patricia Trie data structure, supporting parallel execution and asynchronous I/O operations. By leveraging the latest advancements in asynchronous I/O, MonadDB avoids potential bottleneck issues that may arise when the system is processing transactions.

Despite being established for only two years, Monad's technical strength and market potential have been widely recognized. Although the Monad mainnet has not yet launched, the Devnet internal test network has achieved 10,000 TPS, which is a very high starting point. According to the project team's plan, Monad may expand to 100,000 TPS in the coming years. If this expectation is realized, Monad will undoubtedly become a disruptor in the blockchain industry, and its representative parallel execution and superscalar pipeline framework may also become the mainstream development direction for public chains in the future.

Monad Ecosystem Hot Projects

Although the Monad mainnet has not officially launched yet, its strong technical capabilities and broad market prospects have attracted numerous developers. Currently, over 80 projects have been deployed on Monad, and it is expected that an additional 150 projects will choose to build on the platform when the mainnet starts. Here are a few Monad ecosystem projects worth noting.

aPriori

aPriori is a liquidity staking platform in the Monad ecosystem, focused on miner extractable value (MEV). It provides users with efficient staking solutions while maintaining asset liquidity, allowing users to flexibly utilize their assets while participating in staking.

aPriori completed a $8 million seed round of financing in 2024, led by a well-known investment firm and supported by several other institutions. This funding will be used for technology development and market promotion.

Core functions include:

• Liquid Staking: After users stake their assets, they receive liquid tokens that can be used in other DeFi protocols, enhancing asset utilization efficiency.
• MEV Optimization: Optimize transaction order through smart contracts to maximize user profits.
• High-performance support: Utilizing the high throughput of the Monad network, supporting up to 10,000 transactions per second, ensuring fast processing and efficient execution of liquid staking.

Kintsu

Kintsu is a liquidity staking protocol within the Monad ecosystem, designed to provide users with a flexible staking experience. It allows users to utilize these assets flexibly while staking them, meeting users' liquidity needs.

Kintsu completed a $4 million seed round financing on July 25, 2024. This financing was participated in by several well-known investment institutions and individuals.

Core functions include:

• Liquidity Staking: After users stake their assets, they can receive liquidity tokens, which can be used in other DeFi applications to enhance asset liquidity.
• Decentralized Validator Mechanism: Supports permissionless entry for validators, enhancing the decentralization and security of the network.
• Composability: Kintsu's liquid staking token (LST) can be easily integrated with other DeFi applications, creating more earning opportunities for users.

Kuru

Kuru is a decentralized order book exchange (CLOB) within the Monad ecosystem, designed to provide users with a single platform to discover, research, and trade on-chain spot assets. Kuru leverages the high throughput and fast block times of the Monad network to enhance the trading experience for users.

Kuru completed a $2 million seed round financing on July 25, 2024. This round of financing was participated in by several well-known investment institutions and individuals.

Core features include:

• Decentralized Trading: Allows users to trade in a decentralized environment, ensuring the transparency and security of transactions.
• Diversified financial products: Offering a variety of financial products such as lending, liquidity mining, and insurance to help users optimize asset allocation.

Monad Pad

Monad Pad is a token and NFT launching platform based on Monad. It supports project teams or developers to initiate early fundraising for tokens or NFTs in the form of pre-sales or public sales. Monad Pad provides emerging projects with convenient fundraising channels, helping project teams obtain the necessary financial support.

Monad Pad completed a seed round financing of $945,000 in July 2024, providing funding support for its subsequent development.

Core functions include:

• Token and NFT Launch: Support project teams in early fundraising for tokens and NFTs, reducing the threshold for project initiation.
• Original NFT Series: Launched an NFT series named "Purple Frens", where holders can receive a share of the platform's revenue, enhancing user engagement and income potential.