Monad: Reconstructing Blockchain Performance Standards through Parallel Execution

In today's rapidly evolving Blockchain technology, Ethereum, as a pioneer of smart contract platforms, has laid a solid foundation for the entire industry. However, with the surge in application demands, the technical bottlenecks faced by Ethereum and other existing infrastructures, especially issues of scalability and transaction speed, have become key obstacles 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 funding round, highlighting the market's high recognition of its technological potential. This funding will drive Monad to further optimize its Layer1 Block, bringing revolutionary changes to the industry.

Monad: A New Solution to Solve Ethereum's Scalability Problem

Ethereum occupies a leading position in the blockchain field, being not only the center of blockchain research, decentralized applications (Dapps), and community development, but also having the highest total value locked (TVL). The vigorous development of Ethereum has given rise to a large developer community, fostering numerous innovative DeFi and dApp projects.

However, with the surge in the number of projects, the Ethereum Virtual Machine (EVM) is facing unprecedented challenges, particularly as scalability issues become increasingly prominent. The single-threaded nature of the EVM limits transaction processing speed and prolongs execution time. To address this challenge, various solutions have been proposed in the industry, among which sharding technology and Layer 2 scaling strategies have garnered significant attention.

Sharding technology aims to split the Blockchain network into multiple small shards to enhance storage capacity and performance. However, the implementation of this technology requires long-term validation and research, and it is difficult to realize its potential in the short term. Layer 2 scaling strategies handle transactions and smart contract execution by building additional frameworks on top of the main chain to reduce the burden on the main chain and improve network efficiency. However, with some well-known Layer 2 projects delaying the decentralization of sequencers, the challenges faced by Layer 2 in terms of centralization are becoming increasingly severe.

In the face of these issues, Monad founder Keone Hon proposed a unique insight. He believes that the current scalability path of Ethereum has problems. The Layer1+Layer2 hierarchical strategy may lead to the blockchain being divided into independent execution environments, undermining on-chain composability. Therefore, building 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 enhancing EVM execution efficiency through "parallel processing" technology at the Layer 1 level. Monad aims to achieve transaction parallel processing directly on the Ethereum main chain, rather than relying on additional Layer 2 solutions. This approach maximizes the processing capacity and scalability of EVM without sacrificing security and decentralization, fully unleashing the potential of the EVM ecosystem. Currently, Monad has reached the capability of processing 10,000 transactions per second, and the project team is confident that this number will be increased 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. So far, more than 50 institutions have participated in investing in Monad. Investors are confident in Monad's prospects, believing it will drive the adoption of cryptocurrencies in the next 2-3 years. Some investors even view Monad as a solid foundation for stablecoins, calling it a "killer application," and expect 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. It has not chosen to enhance scalability through layer2 solutions, but instead focuses on the underlying base 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 is crucial for the future development of Monad.

In terms of performance, Monad directly competes with established layer 1 public chains such as Aptos, Sui, and Solana, particularly demonstrating significant advantages in throughput and low finality time. More importantly, Monad achieves full compatibility with EVM while ensuring high performance, allowing Ethereum developers to easily port their applications to Monad.

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

Monad's working mechanism

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 such as Tendermint and HotStuff while innovating and improving upon them. Compared to Tendermint's three-phase commit process, MonadBFT adopts a more efficient two-round leader-centric broadcast and gather approach. This mechanism ensures rapid 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 core of the delayed execution mechanism lies in separating consensus from execution, allowing nodes to quickly reach agreement on the order of transactions without having to wait for the execution of transactions to complete. In traditional blockchains, consensus and execution are tightly coupled; transactions must be executed first to determine state and correctness before consensus on the block can be reached. This approach is inefficient because the execution process can become a bottleneck for consensus. Monad, through its delayed execution mechanism, allows nodes to determine the transaction order during the consensus phase and execute transactions independently in the subsequent execution phase. This significantly improves resource utilization efficiency, enabling Monad to handle more transactions.

Parallel execution is another key feature of Monad. It achieves parallelism through optimistic execution, where Monad processes transactions optimistically 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 reveals the dependencies between transactions, enabling efficient re-execution. With the parallel execution mechanism, Monad can handle multiple transactions simultaneously, further increasing transaction throughput. Additionally, Monad determines the dependencies of each transaction empirically, effectively reducing the need for complex scheduling algorithms, thus lowering system complexity and overhead.

MonadDB is a database specially developed by Monad. Traditional blockchains like Ethereum use Merkle Patricia trees to store states, allowing for efficient data retrieval and ensuring tamper-proofing. 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 MPT tree structure and cannot support Monad's parallel execution requirements. To address this issue, Monad has introduced MonadDB. This database is natively compatible with the Patricia Trie data structure, supporting Monad's parallel execution and asynchronous I/O operations. By leveraging the latest advancements in asynchronous I/O, MonadDB avoids the bottleneck issues that can occur when the system waits for one transaction to complete before moving on to the next.

Monad has only been established for two years, but it has already shown great potential. Although the mainnet has not yet launched, the Devnet internal testing network has reached 10,000 TPS, which is a very high starting point. According to the project team's plan, Monad can scale 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 will also become the mainstream development direction for public chains.

Monad Ecosystem Hot Project Review

Monad Labs raised $225 million in Series A funding in April, with 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, far exceeding other EVM-compatible public chains.

Despite the mainnet not being officially launched, Monad's strong technological capabilities and broad prospects have attracted numerous developers. Currently, more than 80 projects have been deployed on Monad, and it is expected that 150 projects will choose to build on this platform when the mainnet goes live. 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 provides users with efficient staking solutions while maintaining asset liquidity, allowing users to flexibly utilize their assets while participating in staking.

Financing Status

aPriori completed a $8 million seed round of financing in 2024, led by a well-known investment institution, with support from several other investment firms.

Core Functions

• Liquidity Staking: Users can stake their crypto assets to obtain liquidity tokens, making it convenient to use in other DeFi protocols and enhancing asset utilization efficiency.
• 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: Utilizing the high throughput of the Monad network, supporting up to 10,000 transactions per second, ensuring fast processing and efficient execution of liquidity staking.

Kintsu

Kintsu is a liquidity staking protocol within the Monad ecosystem, providing users with a flexible staking experience. It allows users to flexibly use their assets while staking them, meeting the users' demand for liquidity.

Financing Situation

Kintsu completed a $4 million seed round financing on July 25, 2024. This financing was led by well-known investment institutions, with participation from several investors.

Core Functions

• Liquid Staking: Users receive liquidity tokens after staking their assets, which can be used in other DeFi applications to enhance asset liquidity.
• Decentralized Validator Mechanism: Supports permissionless joining of validators, enhancing network decentralization and security, ensuring the safety of user assets.
• Composability: Kintsu's liquid staking tokens (LST) can be easily integrated with other DeFi applications, creating more yield opportunities for users.

Kuru

Kuru is a decentralized order book exchange (CLOB) within the Monad ecosystem, providing users with a single platform to discover, research, and trade on-chain spot assets. Kuru offers better capital efficiency and liquidity through an efficient order book mechanism, leveraging the high throughput and fast block times of the Monad network to enhance the user trading experience.

Financing Scale

Kuru completed a $2 million seed round financing on July 25, 2024. This round of financing was led by a well-known investment institution, with participation from multiple investors and angel investors.

Core Features

• Decentralized Trading: Kuru allows users to trade in a decentralized environment, ensuring transaction transparency and security, and reducing user trust costs.
• Diversified financial products: Offering various financial products such as lending, liquidity mining, and insurance to help users optimize asset allocation and achieve higher investment returns.

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 presales or public sales. Monad Pad provides an easy fundraising channel for emerging projects, helping project parties obtain the financial support they need.

Financing Situation

Monad Pad completed a seed round financing of 945,000 USD in July 2024, with participation from several investment institutions, providing financial support for its subsequent development.

Core Functions

• Token