Monad: The Rise of a High-Performance EVM-Compatible Layer 1 Blockchain

In the context of the continuous 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 demands, the technical limitations faced by existing infrastructures such as Ethereum, particularly issues of scalability and transaction speed, have become key bottlenecks in the development of the industry. To address these issues, Monad has emerged, promising to reshape 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 help Monad further construct and optimize its Layer1 Blockchain, bringing revolutionary changes to the Blockchain industry.

01, Monad: Innovative Solution to Ethereum Scalability Issues

Ethereum's position in the blockchain space is unassailable. It is not only the core of blockchain research, decentralized applications (Dapps), and community development, but also possesses the highest Total Value Locked (TVL), highlighting its leadership. Thanks to the vigorous development of Ethereum, its developer community has become the largest in the crypto space, nurturing numerous innovative DeFi and dApp projects.

However, with the exponential increase in the number of projects, the Ethereum Virtual Machine (EVM) faces 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, 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 a blockchain network into multiple smaller shards to improve storage capacity and performance. However, the implementation of this technology requires long-term validation and research, and its potential cannot be realized in the short term. Layer 2 scaling strategies, on the other hand, handle the execution of transactions and smart contracts by building additional frameworks on top of the main blockchain, thereby alleviating the burden on the main chain and improving overall network efficiency. However, with some prominent Layer 2 projects postponing their decentralization processes, the challenges facing Layer 2 in terms of centralization are becoming increasingly severe.

In the face of these challenges, Monad's founder Keone Hon proposed a unique insight. He believes that the current scaling path of Ethereum has issues. The layered strategy of Layer1+Layer2 may lead to the blockchain being divided into independent execution environments, thus undermining on-chain composability. Therefore, establishing a more efficient underlying network is the most correct solution, which is the background of Monad's birth.

Monad is a high-performance L1 that is fully compatible with Ethereum, focusing on the use of "parallel processing" technology at the Layer 1 level to improve the execution efficiency of the EVM. This means that Monad implements parallel processing of transactions directly on the 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 of processing 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 in April 2024. So far, more than 50 institutions have participated in investing in Monad. These investors are confident in Monad's prospects, believing it will drive the adoption of cryptocurrencies in the next 2-3 years. Some investors even regard Monad as a solid foundation for stablecoins, calling it a "killer application," and expect it to continue to grow exponentially in the coming years.

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

Monad is favored primarily due to its outstanding technical advantages. It does not choose to enhance scalability through layer 2 solutions, but rather addresses the issue from the underlying foundational network by improving network efficiency through parallel execution strategies. The greatest advantage of this approach is that it maintains the security and decentralized characteristics of the network, which is crucial for the future development of Monad.

In terms of performance, Monad directly competes with other well-known layer 1 public chains, especially demonstrating significant advantages in throughput and low finality time. More importantly, Monad achieves complete compatibility with EVM while ensuring high performance, which allows Ethereum developers to easily port their applications to Monad.

With three core advantages of decentralized aggregation, extremely high scalability, and Ethereum compatibility, Monad is expected to be a game changer in the future of the Blockchain field.

The working mechanism of Monad

The working mechanism of Monad is mainly achieved through the optimization of four core areas: MonadBFT, lazy execution, parallel execution, and MonadDB. These four mechanisms work together to drive the efficient operation of Monad.

MonadBFT is the core of the Monad consensus algorithm, drawing on the essence of classical consensus algorithms while innovating. It employs a two-round leader-centric fan-out and fan-in method to ensure fast confirmation and finality of the Blockchain, while reducing communication overhead and latency.

The delayed execution mechanism separates consensus from execution, allowing nodes to quickly reach agreement on the order of transactions without having to wait for the execution of the transactions to complete. 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 dependencies between transactions and enable efficient re-execution, further enhancing transaction throughput.

MonadDB is a specialized database launched by Monad, optimized for native compatibility with the Patricia Trie data structure, capable of supporting 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 transaction.

Although Monad has only been established for two years, its technological potential has already emerged. The Devnet internal test network has reached 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 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.

03, Review of Hot Projects in the Monad Ecosystem

Although the Monad mainnet has not officially launched yet, its technical strength and market prospects have attracted many developers. Currently, over 80 projects have been deployed on Monad, and it is expected that an additional 150 projects will join when the mainnet starts. This thriving ecological development trend fully demonstrates Monad's potential and influence. Here are a few 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 provides users with efficient staking solutions while maintaining asset liquidity.

Financing Situation: Completed $8 million seed round financing in 2024, led by a well-known investment institution.

Core Functions:

• Liquidity Staking: Users stake assets to receive liquidity tokens, which can be used in other DeFi protocols.
• MEV Optimization: Optimize transaction order through smart contracts to maximize user profits.
• High-performance support: Utilize Monad network's high throughput to support rapid processing and efficient execution.

Kintsu

Kintsu is a liquidity staking protocol in the Monad ecosystem that provides users with a flexible staking experience.

Financing Situation: Completed a $4 million seed round financing in July 2024, led by a well-known investment institution.

Core Features:

• Liquidity Staking: Users receive liquidity tokens after staking, which can be used in other DeFi applications.
• Decentralized Validator Mechanism: Supports permissionless joining of validators, enhancing the decentralization and security of the network.
• Composability: Liquid staking tokens can be easily integrated with other DeFi applications to create more yield opportunities.

Kuru

Kuru is a decentralized order book exchange (CLOB) in the Monad ecosystem, providing users with an on-chain spot asset trading platform.

Financing Scale: Completed a $2 million seed round financing in July 2024, led by a well-known investment institution.

Core Features:

• Decentralized trading: Trading in a decentralized environment to ensure transparency and security.
• Diversified financial products: Offering various financial products such as lending, liquidity mining, and insurance.

Monad Pad

Monad Pad is a token and NFT launch platform based on Monad, supporting project teams or developers in early fundraising.

Funding Situation: Completed $945,000 seed round financing in July 2024.

Core Functions:

• Token and NFT issuance: Support project parties for early fundraising.
• Original NFT Series: Issuing the "Purple Frens" NFT series, holders can receive a share of platform revenue.