Kuru Labs: Building a High-Performance On-Chain Order Book Trading Platform

With the continuous development of blockchain technology, the structural bottlenecks of on-chain transaction experiences are gradually becoming apparent. Although the Automated Market Maker (AMM) model has driven the early development of decentralized exchanges, there are still limitations in terms of liquidity utilization efficiency, price discovery mechanisms, and support for limit orders. On the other hand, while the Central Limit Order Book (CLOB) model offers greater flexibility and precision, it has long been constrained by the performance of public chains and the on-chain execution costs, making it difficult to truly materialize.

Recently, Kuru Labs announced the completion of a $11.5 million Series A funding round, led by well-known investment institutions and participated by several industry professionals. Kuru Labs is committed to building a full-chain trading platform that combines order book architecture with automated market-making logic on the high-performance Layer 1 blockchain Monad. The project aims to provide a more balanced product path for both professional traders and ordinary users through the reconstruction of the underlying architecture.

Kuru Labs was founded in 2024 by a team with experience in high-frequency trading, DeFi protocol development, and on-chain system optimization. The project's goal is to create a decentralized trading platform that is fully based on blockchain, featuring both order book and automated market making functions. Kuru's vision is not to take shortcuts from existing architectures, but to start from the ground up, combining the advantages of the two existing mainstream models to replicate a spot trading system on-chain that is closer to the experience of centralized exchanges.

In terms of technical architecture, Kuru does not adopt the AMM model used by mainstream decentralized exchanges, but rather attempts to build a hybrid system that combines order books and automated market-making functions. The core idea is to introduce a default automated market-making algorithm into the order book of each trading pair on-chain, allowing users to still receive basic quote support in the absence of active liquidity providers. This design does not rely on centralized market makers to maintain market liquidity, nor does it impose a unified constraint on price curves like AMM does, but rather provides the possibility of flexible switching between the two.

In terms of operation, Kuru has designed an order management mechanism suitable for on-chain environments. The submission and cancellation of limit orders use low and predictable gas costs, allowing market makers or strategic traders to operate frequently without being limited by high costs affecting their efficiency. The team is also developing a passive liquidity mechanism that allows ordinary users to support liquidity through strategy contracts without managing orders. This approach is expected to lower the participation threshold while improving the funding coverage of the on-chain order book.

Kuru has chosen the Monad blockchain as its deployment platform. Monad is a Layer 1 blockchain compatible with the Ethereum EVM and is currently still in the testing phase. Unlike existing EVM public chains, Monad does not simply replicate Ethereum's code but reconstructs the execution engine from the ground up, using a parallel architecture and a pipelined scheduling mechanism to enhance processing capacity per second and reduce block generation latency. Internal testing data shows that Monad can achieve a processing capacity of 10,000 TPS in a controlled environment while maintaining a one-second block generation speed.

The hybrid order book model built by Kuru is currently in the early stages of market validation. This model attempts to provide a new on-chain option between existing AMMs and centralized order books, bringing market-making behavior closer to traditional trading systems while retaining the openness and composability of decentralized protocols. Ideally, this architecture can cover mainstream trading pairs and also serve long-tail assets, thereby providing a unified trading infrastructure for various asset types.

However, there are still a series of uncertainties at the current stage. First is the risk of technology realization. Although the design goals of Monad are attractive, there is still a gap between the white paper and the actual operating environment. On-chain throughput, transaction confirmation, node synchronization, and other dimensions may all become limiting factors. Secondly, there is the actual motivation for user migration. Currently, most on-chain trading users have already formed habits of using AMM platforms, and it is not easy to convince them to switch to an order book model. Although Kuru supports a simplified liquidity participation approach in terms of mechanism, the actual effect still needs time to observe.

Overall, Kuru Labs' attempt represents a new direction in the evolution of decentralized exchanges. By combining the advantages of order books and automated market making, and relying on high-performance blockchain infrastructure, the project is expected to bring new possibilities for on-chain trading. However, challenges such as technical implementation and user acceptance still need to be overcome, and its development prospects are worth the market's continued attention.