Author: Daniel Li, CoinVoice
In the vast universe of blockchain technology, Ethereum, as a pioneering smart contract platform, has laid a solid foundation for the entire industry. However, with the explosive growth in application demand, Ethereum and other existing infrastructures such as Solana are facing technical limitations, especially in scalability and transaction speed, which have become key bottlenecks for the industry's development. To address these issues, Monad has emerged, promising to reshape the blockchain performance standard with a high throughput of up to 10,000 transactions per second. Earlier this year, Monad Labs completed a $225 million financing round led by Paradigm, marking a high level of market recognition for Monad's technological potential. This funding will help Monad further build and optimize its Layer1 blockchain, bringing revolutionary changes to the blockchain industry.
Monad: Founded to Solve Ethereum's Scalability Challenges
As a leader in the blockchain field, Ethereum's position is unshakable. It is not only the core of blockchain research, decentralized applications (Dapps), and community development, but also holds the highest total locked value (TVL), demonstrating its leadership in the blockchain world. Thanks to Ethereum's vigorous development, the Ethereum and Ethereum Virtual Machine (EVM) developer community has become the largest community in the crypto field, nurturing countless innovative DeFi and dApp projects.
However, with the surge in the number of projects, the EVM is facing unprecedented challenges, especially in scalability, which is becoming increasingly prominent. The single-threaded nature of the EVM limits transaction processing speed and increases execution time. To address this challenge, the industry has proposed various solutions, with sharding technology and Layer2 scaling strategies receiving much attention.
Sharding technology aims to split the massive blockchain network into smaller shards to increase storage capacity and performance. However, the implementation of this technology requires lengthy verification and research, and its potential cannot be fully realized in the short term. On the other hand, Layer2 scaling strategies involve building additional frameworks on top of the main blockchain to handle transaction and smart contract execution, thereby reducing the burden on the main chain and improving overall network efficiency and scalability. However, with well-known Layer2 aggregation companies such as Arbitrum, Optimism, and Starkware delaying the decentralization of their sequencers, Layer2 is facing increasing challenges in centralization.
Faced with these challenges, Monad's founder, Keone Hon, has put forward unique insights. He believes that the current scalability path taken by Ethereum has certain problems. The layered strategy of Layer1+Layer2 will divide the blockchain into independent execution environments, disrupting the composability on the chain. Therefore, establishing a more efficient underlying network is the correct solution, leading to the birth 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 improve the efficiency of EVM execution. This means that Monad's goal is to achieve parallel processing of transactions directly on Ethereum's main chain, without relying on additional Layer 2 solutions. This approach can maximize the processing capacity and scalability of the EVM to the fullest extent without sacrificing security and decentralization, thereby fully unleashing the potential of the EVM ecosystem. Currently, Monad has achieved the ability to process up to 10,000 transactions per second, and the project team is confident in increasing this number tenfold in the coming years.
Since its establishment in 2022, Monad has completed two rounds of financing, including a $19 million seed round in February 2023 and a $225 million financing round in April 2024. As of now, more than 50 investment institutions have participated in the Monad project. These investors are confident in Monad's prospects, believing that it will drive the popularization of cryptocurrencies in the next 2-3 years. Matthew Walsh, founding partner of Castle Island Ventures, sees Monad as a solid foundation for stablecoins and refers to it as a "killer application," expecting it to continue to grow exponentially in the coming years.
Monad: Reshaping Blockchain Performance with Underlying Optimization and Parallel Strategies
Monad is highly favored mainly due to its outstanding technical advantages. Instead of choosing to improve scalability through layer2 solutions, it starts from the underlying basic network and improves network efficiency through parallel execution strategies. The greatest advantage of this approach is that it maintains the security and decentralization of the network, which is crucial for Monad's future development.
In terms of performance, Monad directly competes with established layer1 public chains such as Aptos, Sui, and Solana, showing significant advantages in throughput and low finality time, far exceeding many other platforms. More importantly, while ensuring high performance, Monad has achieved full compatibility with EVM, allowing Ethereum developers to easily port their applications to Monad.
With these three core advantages of decentralization, extremely high scalability, and Ethereum compatibility, Monad may become a game-changer in the future blockchain gaming industry.
Monad's Working Mechanism
Monad's working mechanism mainly achieves optimization in four core areas: MonadBFT, delayed execution, parallel execution, and MonadDB. Next, we will explore how these four mechanisms work together to drive the efficient operation of Monad.
First, let's understand MonadBFT. This mechanism is the core of Monad's consensus algorithm, drawing on the essence of classic consensus algorithms such as Tendermint and HotStuff, and making innovative improvements. Compared to Tendermint's three-phase commit process, MonadBFT adopts a more efficient 2-round leader-centric fan-out and fan-in approach. This mechanism ensures fast confirmation and finality of the blockchain, while reducing communication overhead and latency. Specifically, when a leader proposes a block and distributes it to all validators, the validators quickly respond and send votes to the leader of the subsequent block. This pipeline-style consensus process not only improves efficiency but also enhances the security and stability of the blockchain.
Next is the delayed execution mechanism. The core of this mechanism lies in separating consensus from execution, allowing nodes to quickly reach consensus on transaction order without waiting for transaction execution to complete. In traditional blockchains, consensus and execution are tightly coupled, meaning that transactions must be executed first to determine their state and correctness before reaching consensus on the block. However, this approach suffers from inefficiency because the execution process may become a bottleneck for consensus. With the delayed execution mechanism, Monad allows nodes to determine transaction order during the consensus phase and independently execute transactions in the subsequent execution phase. This greatly improves resource utilization efficiency and enables Monad to process more transactions.
Parallel execution is another key feature of Monad. It achieves parallelism through optimistic execution, meaning that Monad optimistically processes transactions to determine dependencies. During the optimistic execution phase, Monad begins processing transactions without waiting for the previous transaction in the block to complete, while tracking the inputs and outputs of each transaction. This approach reveals the dependencies between transactions and achieves efficient re-execution. Through parallel execution, Monad can process multiple transactions simultaneously, further increasing transaction throughput. In addition, Monad effectively reduces the need for complex scheduling algorithms and lowers system complexity and overhead by empirically determining the dependencies of each transaction.
Finally, let's explore MonadDB. Traditional blockchains like Ethereum use Merkle Patricia trees to store their state, enabling efficient data retrieval from the tree and ensuring tamper resistance. However, when this data is stored locally, traditional key-value storage databases such as LevelDB or RocksDB are typically used. These databases do not understand the structure of the MPT, making them unable to support Monad's parallel execution requirements. To address this issue, Monad has introduced its own database, MonadDB. This database is optimized and natively compatible with the Patricia Trie data structure, supporting Monad's parallel execution and asynchronous I/O operations. By leveraging the latest advances in asynchronous I/O, MonadDB avoids potential bottlenecks when the system waits for one transaction to complete before moving on to the next transaction.
Monad: Hot Eco-Project Inventory
Monad Labs, the developer of the Monad blockchain, raised $225 million in Series A financing in April, led by heavyweight company Paradigm, with a reported valuation of $30 billion. Monad has become the largest parallel EVM public chain integrated into the market, surpassing other EVM-compatible public chains such as BSC, Polygon, and Avalanche with a throughput of 10,000 transactions per second (tps).
Although the mainnet of Monad has not yet officially launched, its strong technical strength and broad market prospects have already attracted the favor of many developers. Currently, more than 80 projects are deployed on Monad, and it is expected that 150 projects will choose to build on the platform when the mainnet launches. This thriving ecological development trend fully demonstrates the potential and industry influence of Monad. Here are a few noteworthy projects in the Monad ecosystem.
aPriori
aPriori is a liquidity staking platform in the Monad ecosystem, focusing on Miner Extractable Value (MEV). It aims to provide users with efficient staking solutions while maintaining asset liquidity, allowing users to flexibly utilize their assets while participating in staking.
Funding Status
aPriori successfully completed a $8 million seed round financing in 2024, led by well-known investment firm Pantera Capital and supported by Binance Labs. This financing will provide strong financial support for its technological development and market promotion.
Core Features
Liquidity Staking: Users can stake their crypto assets and receive liquidity tokens, which can be used in other DeFi protocols, enhancing the efficiency of asset utilization.
MEV Optimization: Optimizing transaction order through smart contracts to maximize user returns and ensure the best returns for users participating in the market.
High-Performance Support: Utilizing Monad network's high throughput, supporting up to 10,000 transactions per second, ensuring fast processing and efficient execution of liquidity staking.
Kintsu
Kintsu is a liquidity staking protocol in the Monad ecosystem, aiming to provide users with a flexible staking experience. It allows users to flexibly use their staked assets while still participating in staking, meeting users' liquidity needs.
Funding Status
Kintsu successfully completed a $4 million seed round financing on July 25, 2024. This round of financing was led by Castle Island Ventures, with participation from other well-known investors including Brevan Howard Digital, CMT Digital, Spartan Group, and others.
Core Features
Liquidity Staking: Users receive liquidity tokens after staking assets, which can be used in other DeFi applications, enhancing asset liquidity.
Decentralized Validator Mechanism: Supports permissionless entry for validators, enhancing network decentralization and security, ensuring the safety of user assets.
Composability: Kintsu's liquidity staking tokens (LST) can be easily integrated with other DeFi applications, creating more opportunities for user returns.
Kuru
Kuru is a decentralized Central Limit Order Book (CLOB) exchange in the Monad ecosystem, aiming to provide users with a single platform to discover, research, and trade on-chain spot assets. Kuru's design philosophy is to provide better capital efficiency and liquidity through an efficient order book mechanism, leveraging Monad network's high throughput and fast block time to enhance user trading experience.
Funding Scale
Kuru completed a $2 million seed round financing on July 25, 2024. This round of financing was led by Electric Capital, with participation from other investors including Brevan Howard Digital, CMS Holdings, Breed VC, and Monad CEO Keone Hon as angel investors.
Core Features
Decentralized Trading: Kuru allows users to trade in a decentralized environment, ensuring transparency and security of transactions, reducing user trust costs.
Diversified Financial Products: Provides various financial products including lending, liquidity mining, and insurance, helping users optimize asset allocation and achieve higher investment returns.
Monad Pad
Monad Pad is a token and NFT launch platform based on Monad. Monad Pad supports projects or developers to launch tokens or NFTs in the form of presale or public sale for early fundraising. It provides a convenient fundraising channel for emerging projects, helping project parties obtain the necessary financial support.
Funding Status
Monad Pad completed a $945,000 seed round financing in July 2024, with participating institutions including CMS and Sneaky Ventures, providing financial support for its subsequent development.
Core Features
Token and NFT Sale: Supports project parties in early fundraising for tokens and NFTs, reducing the threshold for project initiation.
Original NFT Series: Issued an NFT series called "Purple Frens," where holders can receive a share of platform revenue, enhancing user engagement and profit potential.
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