August 1, 2024
Monad Labs is a venture-backed tech startup founded in 2022. Their goal is to address the limitations of existing blockchain technology, such as slow transaction speeds and high costs. They are building a new blockchain called Monad that they say will be much faster and more scalable than existing options.
Since Ethereum remains the most used blockchain for web3 transactions, scalability is still a prominent factor in the blockchain trilemma. Although several EVM-compatible layer 1 solutions are designed to solve this problem, not many address it with the technology Monad plans to use.
The groundbreaking blockchain Monad has garnered $244 million in funding to further develop its innovative parallelization solutions. This is an incredible achievement for a project that has yet to launch. So, in this article, we’ll explain what makes Monad special and why it’s deserving of a quarter-billion-dollar investment.
Introducing Monad Labs: Ethereum Scalability Like No Other
Ethereum is currently the most built-on blockchain in the web3 space because of its many benefits. However, due to its sequential transaction infrastructure, the Ethereum Virtual Machine (EVM) is notoriously plagued by slow transaction speeds.
Parallelization and Sharding are the two main ways to solve this problem. Sharding involves splitting a blockchain into multiple “shards” to enhance its processing capacity. Simply put, it reduces the load on the main chain by distributing it across several nodes.
On the other hand, parallelization involves reordering the blockchain network to execute transactions simultaneously, greatly increasing its throughput and reducing gas fees. Monad is leveraging this less-explored, apparently more efficient technology.
The Layer 1 blockchain is using it to process up to 10,000 transactions per second, a staggering 42% increase over Polygon’s previously unmatched solution. By offering insane speed without trading off Ethereum’s benefits, Monad is revolutionizing Web3 for dApp builders.
Let’s take a deeper look at the technology behind Monad.
How does Monad work?
Monad is an upcoming EVM-compatible Layer 1 blockchain that uses parallelization technology to solve Ethereum’s scalability issue. It offers up to 10,000 transactions per second over Ethereum’s 15, reducing transaction times to just a second or less.
Monad does this by structuring the blockchain to perform transactions simultaneously while presenting results in the original order. This is called Parallel Execution or Superscalar pipelining. It’s performed in such a way that “under the hood” transactions are performed side by side, eventually presenting the results as they would appear if they were performed individually.
Thankfully, Monad also retains Ethereum’s desired qualities. By offering complete bytecode compatibility for the EVM, apps built on Ethereum can seamlessly be ported to Monad to enjoy better throughput and more efficient performance without needing to change their codes.
Any decentralized application that works on Ethereum, including developer tooling like Apeworkx, wallets like Metamask, and analytics tools like Etherscan and Dune, will also work on Monad. You won’t need to use new keys when porting.
Although Monad closely resembles Ethereum, it uses a different consensus mechanism called MonadBFT (Byzantine Fault Tolerance). MonadBFT is a derivative of the HotStuff Algorithm and operates by “streamlining communication between validating nodes and block leaders, thus reducing the consensus rounds and improving efficiency.”
Company and Founders
Monad, also known as Monad Labs, is a Layer 1 blockchain cofounded by Keone Hon (@keoneHD), Eunice Giarta (@0x_eunice), and James Hunsaker (@_jhunsaker) in 2022. These cofounders currently serve as CEO, COO, and CTO, each with an extensive history in traditional finance and crypto and blockchain solutions. Keone and James both having worked at Jump Trading, on the high-frequency trading desk, for eight years while Keone also worked on Solana DeFi and James built Pyth.
Investors
Headquartered in New York, Monad has undergone three funding rounds from 47 investors in less than 18 months, totaling 224 million dollars.
Its seed funding round, which raised about $19m, was on February 14th, 2023. This was followed by a Series A funding round earlier this year that raised $225 million. Its most recent Venture round, which raised an undisclosed amount, was singlehandedly funded by OKX Ventures on May 16th, 2024.
Project | Monad Labs |
|---|---|
Latest Raise | $225M |
Latest Raise Date | Apr 9, 2024 |
Stage | Series A |
Total Raise | $244M |
Category | L1 EVM |
Investors | OKX Ventures |
Paradigm Dragonfly Capital | |
Coinbase Ventures | |
Naval Ravikant | |
HTX Ventures | |
Galaxy Venture Capital | |
GSR Ventures | |
Animoca Ventures | |
Coinfund | |
Lightspeed Faction |
Some of Monad Labs’ most prominent investors include OKX Ventures, Paradigm, Dragonfly Capital, Coinbase Ventures, and Naval Ravikant.
OKX Ventures
OKX Ventures is the investment arm of the popular cryptocurrency exchange platform OKX. It is a blockchain and crypto-centric venture capital founded in 2017. Their main aim is to support the sustainable development of blockchain technology globally, and with 177 investments, they seem to be doing well so far.
OKX Ventures singlehandedly led Monad’s most recent funding round, investing an undisclosed sum into the company.
Website: https://www.okx.com/ventures
Paradigm
Paradigm is a Venture Capital firm Headquartered in San Francisco, California that focuses on crypto and related technologies. Founded in 2018, Paradigm has funded over 100 projects and led 77 of them. Its Monad Labs Series A funding round saw them raise about $225 million for the upcoming layer 1 blockchain on April 9th. Since then, they have raised funds for four more crypto and tech projects.
Website: https://www.paradigm.xyz/
Dragonfly Capital Partners
Dragonfly Capital Partners is a California-based venture capital firm that primarily funds upcoming projects in the crypto assets class. They led Monad’s seed funding round last year, raising $19 million for the blockchain project. Since being co-founded in 2018 by Bo Feng and Haseeb Qureshi, Dragonfly Capital Partners has made 149 investments. However, they have only exited five since then.
Website: https://www.dragonfly.xyz/
Coinbase Ventures
Coinbase Ventures is known for backing Monad Labs’ groundbreaking $225 million Series A funding round. It’s the investment arm of the popular US-based cryptocurrency exchange Coinbase. Founded in 2018, Coinbase Ventures has invested in almost 400 crypto and Web3 projects, including Arbitrum, Dune, Eigen Layer, Etherscan, and Optimism.
Naval Ravikant
Naval Ravikant is an angel investor prominent in the technology and crypto space. He has privately and publicly been involved in many tech and blockchain projects and was previously the CEO of AngelList, a fund-raising platform for startups. At the time of writing, the 49-year-old entrepreneur has invested in over 200 companies.
Website: https://nav.al/
Monad Socials - Twitter and Discord
Monad currently has approximately 310k followers on X (formerly Twitter). Its page, @monad_xyz, is Monad’s outlet for its announcements, development updates, community engagement, purge days, and myriad memes.
Website: https://www.monad.xyz/
X Followers: 309,000
X Followers (6 mths previous): 163,061
X Follower change: 145,939 (+89%)
Monad also frequently hosts spaces on its 2020-created X page, answering questions regarding its project and upcoming ecosystem.
Monad's Discord (https://discord.gg/monad) is also impressive having over 366,000 members and Monad believe that community contribution is key, so we will be tracking and honouring those that contribute across their platforms and no community input will go unnoticed.
The Discord community team will reward members who participate in Discord activities with XP. Tasks such as asking questions before AMA events, or achievements such as winning poker nights will be rewarded with XP.
Monad’s Discord has also introduced Roles for members. The Discord roles are important and reflect your time in the community and your style of contribution.
Monvangelist: Members who have gone above & beyond and helped out in a significant way.
NadOG: long-term supporters & contributors.
Running Hot: For poasting fire. This is a community nominated role so you can only earn if somebody nominates you for it. Occasionally gets refreshed and recorded.
Nads: For quality and quantity of chat. This role is another nominated role.
LocalNads: For quality chat, good posts, and initiatives in a non-english language.
Monartist & Monvideo: For creators of high quality art & video that the community like and engage with
Quant: High signal contribution in a niche. If you poast well about something this is you.
1)what: A badge of shitpoasting and being a spinner.
Pioneer: early settler and semi-retired role for members who joined before DC went public
These roles are important for those looking to farm the potential airdrop.
Monad's Discord also also have a Community Event Calendar (see Official > Info-and-links channel) where participation in the events could increase you Social Credit rating.
Also, being part of Monad’s highly competitive private Telegram community increases your chances of getting rewarded during the potential airdrop. Purges happen on Thursdays, freeing up spots for new members who can reply to their Purgeday posts with the best memes.
The message is clear that Monad aims to build a strong, engaged community to ensure a successful launch and adoption.
Token Release Plan, Ecosystem Partners
Monad Labs hasn’t outlined plans regarding its token launch yet, but with development on the fast lane, this won’t be the situation for long. The project will likely unveil its token within the next year, with a private testnet scheduled to begin in the coming months.
A potential airdrop is also speculated to be on the way, with many enthusiasts already positioning themselves by interacting with and staking in Monad’s early partners, such as $W and $PYTH.
To stake $W go to: https://www.tally.xyz/gov/wormhole
Click on Stake for Governance and Sign in with your EVM Wallet.
Choose a delegate or delegate to yourself.
An unofficial site for checking for Ecosystem Partners to potentially farm the airdrop is Monad Whisper (https://monadwhisper.xyz/) but note that any project listed on this site isn’t an endorsement by Monad Whisper or Monad. A community created site intended to bring projects building on Monad to the eyes of the Monad community. Please do proper research before engaging with any project.
Unique Selling Point
Monad’s Unique Selling Point is that it scales the Ethereum Virtual Machine using parallelization technology while still allowing seamless transitions of EVM-native dApps to its blockchain. Not only does it offer 1-second transaction speeds, but by ensuring full bytecode compatibility for Ethereum, Monad also allows users to benefit from the best of both worlds.
The main things to note about Monad’s solutions are Parallelization, the MonadBFT consensus mechanism, and MonadDb.
As aforementioned, Parallelization refers to Monad’s behind the scenes method of executing transactions simultaneously behind the scenes and then ordering the results as they would appear if processed much slower individually.
MonadBFT (aka Monad Byzantine Fault Tolerance) is Monad’s consensus mechanism based on the HotStuff algorithm. It improves block validation efficiency by “streamlining communication between validating nodes and block leaders.”
Lastly, MonadDb is Monad’s custom database for storing blockchain state that utilizes asynchronous i/o.
Competitor Analysis
Even though parallelization is a less often used solution to Ethereum’s scalability issue, some popular protocols utilize this technology successfully. Sei Network, Solana, Aptos, and Polygon are some of Monad’s most formidable competitors.
Sei Network
Launched in 2022, Sei is a Layer 1 integrated EVM parallelization solution that boasts the fastest digital asset trading network. Sei utilizes a modified proof-of-stake consensus mechanism called the Twin-Turbo Consensus, allowing it to process multiple transactions simultaneously, giving it a significant edge over Ethereum.
It plans to launch Sei V2, bringing major upgrades to the protocol and introducing layer-2 rollup functionality.
Aptos
Founded in October 2022, Aptos is a scalable, Layer 1 blockchain protocol that utilizes a native Byzantine Fault Tolerance consensus mechanism to significantly reduce transaction times by empowering multiple validators to process transactions collectively.
Furthermore, Aptos utilizes Block-STM technology to execute parallel transactions and reportedly increase transaction speeds to up to 160,000 transactions per second. Aptos’ Block-STM machine is apparently so efficient that it’s the template for other parallel transaction execution technologies, proving to be a solid competitor to Monad.
Polygon
Polygon initially launched as MATIC in 2017 with its proof-of-stake technology, which enabled it to process transactions at incredible speeds. However, it’s been working on Parallel Transaction Execution technology based on the EVM-compatible Aptos Block-STM engine. This technology uses a minimal metadata approach that executes transactions before block validation, reducing transaction times.
This technology is still in the works and hasn’t been fully implemented by Polygon yet, but it’s looking to be a significant rival to Monad’s EVM solution.
Conclusion
Monad has garnered much attention in the web3 space for its parallel execution technology that enables it to process transactions at lightspeed. It’s EVM-compatible and will allow users to port their dApps to the blockchain seamlessly.
Monad's solution is no joke, garnering $250m in investments in the past year. But it’s not without competition, as Sei Network, Aptos, and Polygon are already in the Parallelization race. With its community-centric values and a potential airdrop that may garner massive adoption for the protocol, Monad could stand atop, revolutionizing the Web3 experience for Ethereum lovers.
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