Monad: The Rising Star Challenging Layer 1 Performance Limits

In the development of blockchain technology, Ethereum, as a pioneer of smart contract platforms, laid the foundation for the entire industry. However, with the surge in application demands, existing infrastructures like Ethereum face technical bottlenecks, particularly in scalability and transaction speed, which have become obstacles to industry development. In response to these challenges, Monad has emerged, promising to redefine blockchain performance standards with a throughput of up to 10,000 transactions per second. Earlier this year, Monad Labs completed a $225 million financing round, demonstrating the market's high recognition of its technological potential. This funding will drive Monad to further optimize its Layer 1 blockchain, bringing revolutionary changes to the industry.

Monad: A New Solution to Ethereum's Scalability Challenge

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

However, with the surge in the number of projects, the EVM is also facing unprecedented challenges, especially as scalability issues become 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, among which sharding technology and Layer 2 scaling strategies are the most focused on.

Sharding technology aims to divide a large blockchain network into multiple smaller shards to improve storage capacity and performance. However, the implementation of this technology requires long-term verification and research, making it difficult to realize its potential in the short term. On the other hand, Layer 2 scaling strategies alleviate the burden on the main chain and improve overall network efficiency and scalability by building additional frameworks on top of the main blockchain to handle transaction processing and smart contract execution. However, as several prominent Layer 2 projects delay the decentralization of their sequencers, the challenges facing Layer 2 in terms of centralization are becoming increasingly severe.

In the face of these challenges, the founder of Monad proposed a unique insight. He believes that the current scaling path of Ethereum has issues. The Layer1+Layer2 hierarchical strategy can lead to the blockchain being divided into independent execution environments, thus undermining the 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 applying "parallel processing" technology at the Layer 1 level to enhance the execution efficiency of the EVM. This means that Monad aims to implement transaction parallel processing directly on the Ethereum main chain, without relying on additional Layer 2 solutions. This approach maximizes the processing capability and scalability of the EVM without sacrificing security and decentralization, thereby fully unleashing the potential of the EVM ecosystem. Currently, Monad has achieved the capability to process 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: a $19 million seed round in February 2023 and a $225 million round 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 sees Monad as a solid foundation for stablecoins, calling it a "killer application" and expects it to continue to grow exponentially in the coming years.

Monad: Underlying Optimization and Parallel Strategy Reshaping Blockchain Performance

Monad is highly favored mainly due to its outstanding technical advantages. Instead of choosing to enhance scalability through layer 2 solutions, it focuses on improving network efficiency from the underlying foundational network by employing parallel execution strategies. The greatest advantage of this approach is that it maintains the security and decentralization characteristics of the network, which is crucial for Monad's future development.

In terms of performance, Monad directly competes with several established Layer 1 public chains, demonstrating significant advantages particularly in throughput and low finality time, far exceeding many other platforms. More importantly, Monad achieves full compatibility with EVM while ensuring high performance, enabling Ethereum developers to easily port their applications to Monad.

With the combination of decentralization, extremely high scalability, and Ethereum compatibility, Monad is expected to become a game changer in the future of the blockchain gaming sector.

The working mechanism of Monad

The working mechanism of Monad is mainly achieved by optimizing four core areas: MonadBFT, delayed execution, parallel execution, and MonadDB. These four mechanisms work together to promote the efficient operation of Monad.

MonadBFT is the core of the Monad consensus algorithm, drawing on the essence of classic consensus algorithms while making innovative improvements. It employs a leader-centric method with 2 rounds of fan-out and fan-in, ensuring rapid confirmation and finality of transactions on 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 waiting 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, thereby processing multiple transactions simultaneously and further increasing transaction throughput.

MonadDB is a database independently developed by Monad, optimized to be natively compatible with the Patricia Trie data structure, and supports parallel execution and asynchronous I/O operations. By leveraging the latest advancements in asynchronous I/O, MonadDB avoids bottleneck issues that may arise when the system waits for one transaction to complete before moving on to the next one.

Despite being established for only two years, Monad's potential cannot be ignored. The Devnet internal test network has reached 10,000 TPS, which is a very high starting point. According to the project 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.

Highlights of the Monad Ecosystem Project

Although the Monad mainnet has not officially launched yet, its strong technical capabilities and market prospects have attracted numerous developers. Currently, over 80 projects have been deployed on Monad, and it is expected that 150 more projects will join when the mainnet launches. This thriving ecological development trend fully demonstrates Monad's potential and influence. Here are several Monad ecological projects worth paying attention to.

aPriori

aPriori is a liquidity staking platform within the Monad ecosystem, focusing on miner extractable value (MEV). It offers users 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 financing in 2024, led by a well-known investment institution. Its core features include liquid staking, MEV optimization, and high-performance support, leveraging the high throughput of the Monad network to support the processing of up to 10,000 transactions per second.

Kintsu

Kintsu is a liquidity staking protocol within the Monad ecosystem, aimed at providing users with a flexible staking experience. It allows users to utilize these assets flexibly while staking, meeting users' demand for liquidity.

Kintsu completed a $4 million seed round financing in July 2024. Its core features include liquid staking, a decentralized validator mechanism, and composability, allowing permissionless validator participation, which enhances the decentralization and security of the network.

Kuru

Kuru is a decentralized order book exchange (CLOB) in 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 in July 2024. Its core features include decentralized trading and diversified financial products, offering various financial services such as lending, liquidity mining, and insurance.

Monad Pad

Monad Pad is a token and NFT launch platform based on Monad. It supports project parties or developers to initiate early fundraising for tokens or NFTs in the form of pre-sales or public sales, providing an easy fundraising channel for emerging projects.

Monad Pad completed a seed round financing of $945,000 in July 2024. Its core features include token and NFT sales, as well as the original NFT series "Purple Frens", where holders can receive a share of the platform's revenue.