Monad: The New Disruptor Redefining Blockchain Performance

In the development of blockchain technology, Ethereum, as a pioneer of smart contract platforms, has laid a solid foundation for the entire industry. However, with the explosive growth of application demand, the technical limitations faced by Ethereum and other existing infrastructures, especially issues of scalability and transaction speed, have become key bottlenecks for the industry's development. To address these problems, 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, highlighting the market's high recognition of its technological potential. This funding will drive Monad to further build and optimize its Layer1 blockchain, bringing revolutionary changes to the industry.

01, Monad: A New Solution to the Ethereum Scalability Problem

Ethereum's position in the blockchain field is unshakeable. It is not only the core of blockchain research, decentralized applications (Dapps), and community development, but also has the highest Total Value Locked (TVL), showcasing 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 space, nurturing numerous innovative DeFi and dApp projects.

However, with the surge in the number of projects, the EVM also faces unprecedented challenges, particularly the increasingly prominent scalability issues. The single-threaded nature of the EVM limits the transaction processing speed, increasing execution time. To address this challenge, various solutions have been proposed in the industry, among which sharding technology and Layer 2 scaling strategies have received significant attention.

Sharding technology aims to split the massive blockchain network into several 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. On the other hand, Layer2 scaling strategies handle transactions and smart contract execution by building additional frameworks on top of the main blockchain, alleviating the burden on the main chain and improving overall network efficiency and scalability. However, as some well-known Layer2 aggregation companies delay the decentralization of their sequencers, the challenges of centralization faced by Layer2 are becoming increasingly severe.

In the face of these challenges, the founder of Monad proposed unique insights. He believes that the current scaling path of Ethereum has certain issues. The Layer1+Layer2 layered strategy may lead to the blockchain being divided into independent execution environments, thereby undermining the composability on the chain. Therefore, establishing a more efficient underlying network is the best solution, which is the background for the birth 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 parallel processing of transactions directly on the Ethereum main chain without relying on additional Layer 2 solutions. This approach maximizes the processing capacity 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 up to 10,000 transactions per second, and the project team is confident that this number will increase tenfold in the coming years.

Since its establishment in 2022, Monad has completed two rounds of financing, namely a $19 million seed round in February 2023 and a $225 million financing in April 2024. As of now, more than 50 institutions have participated in investing in the Monad project. These investors are confident in Monad's prospects, believing it will drive the popularity of cryptocurrency in the next 2-3 years. A founding partner of an investment institution regards Monad as a solid foundation for stablecoins, labeling it as a "killer application" and anticipating its continued exponential growth in the coming years.

02, Monad: Underlying Optimization and Parallel Strategy Reshaping Blockchain Performance

Monad is favored mainly due to its outstanding technical advantages. It has not chosen to enhance scalability through layer2 solutions, but instead focuses on the underlying foundational network, improving network efficiency through parallel execution strategies. The greatest advantage of this approach is that it maintains the security and decentralization characteristics of the network, which are crucial for Monad's future development.

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

With the aggregation of decentralization, extremely high scalability, and Ethereum compatibility, Monad is likely 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, lazy execution, parallel execution, and MonadDB. These four mechanisms work together to promote the efficient operation of Monad.

First is MonadBFT. This mechanism is the core of the Monad consensus algorithm, which draws on the essence of classic consensus algorithms and has undergone innovative improvements. MonadBFT employs a more efficient two-round leader-centric fan-in and fan-out method. This mechanism ensures fast confirmation and finality of the blockchain while reducing communication overhead and latency. When the leader proposes a block and distributes it to all validators, the validators respond quickly and send votes to the leader of the subsequent block. This pipelined consensus process not only improves efficiency but also enhances the security and stability of the blockchain.

The delayed execution mechanism is another key feature of Monad. It separates consensus from execution, allowing nodes to quickly reach agreement on the order of transactions without waiting for transaction execution to complete. In traditional blockchains, consensus and execution are tightly coupled, which can lead to the execution process becoming a bottleneck for consensus. Monad, through the delayed execution mechanism, allows nodes to determine the order of transactions during the consensus phase and execute transactions independently in the subsequent execution phase. This approach significantly improves resource utilization efficiency, enabling Monad to handle more transactions.

Parallel execution is another important feature of Monads. It achieves parallelism through optimistic execution, which means that Monads optimistically process transactions to determine dependencies. During the optimistic execution phase, Monads begin processing transactions without waiting for the previous transaction in the block to complete, while tracking the inputs and outputs of each transaction. This approach can reveal dependencies between transactions and enable efficient re-execution. Through the parallel execution mechanism, Monads can handle multiple transactions simultaneously, further increasing transaction throughput. In addition, Monads also determine the dependencies of each transaction empirically, effectively reducing the need for complex scheduling algorithms, thereby lowering system complexity and overhead.

Finally, there is MonadDB. Traditional blockchains use Merkle Patricia trees to store states for efficient data retrieval and to ensure tamper-proofing. However, when these data are stored locally, traditional key-value storage databases are often used. These databases do not understand the MPT tree structure, and thus cannot support Monad's parallel execution requirements. To address this issue, Monad has launched its own database, MonadDB. This database is optimized for native compatibility with the Patricia Trie data structure and can support Monad's parallel execution and asynchronous I/O operations. By leveraging the latest advancements in asynchronous I/O, MonadDB avoids the bottleneck issues that may arise when the system waits for one transaction to complete before moving on to the next.

Monad has only been established for two years, and although this is a short period, it is undeniable that it is a blockchain project with long-term potential. Although the Monad mainnet has not yet been launched, its 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 entire blockchain industry, and its representative parallel execution and superscalar pipeline framework may also become the mainstream development direction of public chains in the future.

03, Monad: Review of Hot Ecological Projects

Monad Blockchain developer Monad Labs raised $225 million in Series A funding in April, achieving a valuation of $3 billion. Monad has become the largest parallel EVM public chain in terms of funding scale, with a throughput of 10,000 transactions per second (tps), far exceeding other EVM-compatible public chains.

Although the Monad mainnet has not officially launched yet, its strong technical capabilities and broad market prospects have already 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 this platform when the mainnet goes live. This thriving ecological development trend fully demonstrates Monad's potential and industry influence. Here are a few Monad ecosystem projects worth paying attention to.

aPriori

aPriori is a liquidity staking platform within the Monad ecosystem, focusing on Miner Extractable Value (MEV). It aims to provide users with efficient staking solutions while maintaining the liquidity of assets, allowing users to flexibly utilize their assets while participating in staking.

Financing Situation

aPriori successfully completed an $8 million seed round financing in 2024, led by a well-known investment institution, with support from other institutions. This financing will provide strong financial support for its technology development and market promotion.

Core Functions

• Liquid Staking: Users can stake their crypto assets and receive liquidity tokens, making it convenient to use in other DeFi protocols, thereby enhancing the efficiency of asset utilization.

• MEV Optimization: Optimize transaction order through smart contracts to maximize user profits and ensure users receive the best returns when participating in the market.

• High Performance Support: Leveraging 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, aimed at providing users with a flexible staking experience. It allows users to utilize their assets flexibly while staking them, meeting the users' need for liquidity.

Financing Status

Kintsu successfully completed a $4 million seed round financing on July 25, 2024. The financing was led by a certain investment institution, with other well-known investors also participating.

Core Functions

• Liquidity Staking: Users can obtain liquidity tokens after staking assets, which can be used in other DeFi applications to enhance asset liquidity.

• Decentralized Validator Mechanism: Supports permissionless entry of validators, enhancing the decentralization and security of the network, ensuring the safety of user assets.

• Composability: Kintsu's liquid staking tokens (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, aimed at providing users with a single platform to discover, research, and trade spot assets on the chain. The design philosophy of Kuru is to achieve efficiency.