2024 The much-anticipated L1 — Monad

Original author: THOR, compiler: LlamaC

"Recommendation: EVM has been a pioneer in blockchain virtual machines and has become the most commonly used virtual machine over the years. It has witnessed well-known innovations such as Curve, Uniswap, and Maker. Although EVM is dominant, its limited programming language, the complexity of Solidity, sequential processing and other limitations have led to the rise of AltVM (alternative virtual machines). Among AltVMs, Monad, in addition to MonadDb bringing 10,000 TPS per second to the development of the main network, the huge community culture it has built is the biggest highlight that distinguishes it from other AltVM projects. We always compare L1 to a city and the core operators of L1 as a service-oriented government. The ability to attract investment (developers) and the atmosphere of citizen living (culture)/efficiency of citizen services (convenience) are used as assessment dimensions for evaluation. At present, Monad has begun to show its competitiveness. In the future, we look forward to witnessing and participating in the development and growth of Monad, Gmonad!"

Monad is a first-generation Monad that will be launched later this year. 1 layer (L1) blockchain. Despite not yet being launched, Monad has amassed a large community that has reached an almost cult-like status, with members even creating their own pets, releasing several mixtapes on Soundcloud, etc. Monad stands out for its goal to be a highly scalable single large L1 blockchain that is both EVM-compatible and capable of handling over 10,000 transactions per second with a block time of 1 second. This scalable performance is made possible by technologies such as parallel execution and Monad DB. Achieving security and decentralization, Monad raised $19 million in a seed round led by Dragonfly, with participation from Placeholder, Shima Capital, Lemniscap, Cobie, and others. On April 9, Monad Labs closed a $225 million round led by Paradigm.

Monad's Origin Story

Monad has been in development for about two years and was founded by Keone Hon, James Hunsaker, and Eunice Giarta. Keone and James are the two technical co-founders who have worked together at Jump Trading for eight years. Sitting on the same high-frequency trading desk, competing against 20 other teams within Jump, Keone and James were able to come out on top for many years in a row, facilitating over $10 trillion in notional volume per year and performing thousands of trades per second. At this level of volume, Keone and James experienced firsthand the difference microseconds can make in execution. After entering the crypto space, Keone worked on Solana DeFi while James built Pyth. They began building Monad in 2022 after realizing that it was possible to implement a series of fundamental optimizations to the EVM that have become standard in high-performance computer science over the past 20 years, but have not yet been applied to the EVM. By introducing these components, a higher-performing EVM can be created that solves many of the current scaling bottlenecks.

“They were the first ones to push the parallel EVM. They understand it better than anyone in crypto right now. There’s no doubt in my mind that Monad had done what other chains claim to have a parallel EVM a year and a half ago. With all-out engineering efforts, Monad is very close to having a first product. I’d say within a month we’ll have the first internal private testnet up and running.”

Monad’s Technology Stack

It turns out that parallelization is much more than just a buzzword/narrative, it enables scalable and efficient execution. It’s not just the parallel execution engine that makes Monad scalable and capable of handling over 10,000 transactions per second.

I think a lot of people think that parallel execution is a plug-and-play thing, i.e.: “if you can add parallel execution to the EVM, then suddenly it’s going to be a lot more performant”. But that’s not actually the case. Parallel execution alone doesn’t actually do much to create a higher performance EVM. Monad truly enables parallel execution, combined with a few other optimizations that unlock a lot of the performance of parallel execution. Let’s break it down:

Parallel execution

refers to the ability to execute multiple tasks at the same time, rather than one after another (sequentially). While parallel processing can be more complex, it can significantly reduce processing time and improve efficiency by distributing the workload across multiple processors:

Sequential vs. Parallel Execution

Monads take advantage of parallel execution, allowing multiple transactions to be processed simultaneously. It’s worth noting that Monad blocks are still linearly ordered collections of transactions like Ethereum.

Monad uses optimistic, which means the chain will start executing transactions before earlier transactions in the block have completed. To avoid errors and incorrect execution, the state of transactions is merged sequentially in the block to ensure correctness.

MonadDb

Without a state database that allows parallel reads and writes to disk, a parallel execution engine will not do much to improve the performance of a blockchain. Let's see this with an example:

Sequential Execution (Ethereum): Imagine a single lane highway with a single toll booth that allows one car to pay the toll and pass through at a time.

Parallel Execution: Now there are 20 lanes on the highway and 20 toll booths, but still only one car can pass through at a time. So if a car is passing through toll booth 1, then the car at toll booth 2 or 3 will have to wait.

Parallel Execution with Parallel Database: All 20 toll booths can be used at the same time, and 20 cars in different lanes can pass through at the same time.

Monad DB is the key to unlocking parallel processing and fast finality/high TPS for the chain.

Asynchronous Execution and Consensus

Currently in Ethereum blocks, execution happens in about 1/10 of a second, and then the next 11.9 seconds are all about consensus. What Monad does is split this up so that instead of having 12 seconds for blocks and 1/10 of a second for execution, now you have two separate swimlanes so you can use the full budget of the block for execution. Imagine if Ethereum had 12 seconds of execution per block instead of 1/10 of a second. That's a 100x increase. This is a very standard thing that a lot of people have been implementing in computer science for a long time, but it doesn't currently exist in the EVM. So that's another big unlock. ”

“All of that combined together is what really gets the performance right. To make it actually work and get to 10,000 transactions per second throughput. ”

All of this, plus full EVM compatibility, makes Monad stand out from the competition. Any EVM protocol can be easily deployed on Monad and take advantage of the efficient execution environment.

What applications can be built on Monad?

List of projects that have committed to launch on Monad

Now that the tech stack is out of the way, let’s explore the upcoming Monad ecosystem. Generally speaking, all protocols will benefit from improved execution, i.e. faster finality and more TPS. However, there are specific applications that can be unlocked by fast chains like Monad to achieve breakthrough progress.

One of the most obvious use cases is trading protocols. In particular, for on-chain order books DEXs (spot and futures), built on Monad will be attractive. Order book exchanges have historically been centralized (Bybit, Binance, Coinbase, etc.), and while they offer deep liquidity, they have relatively high fees and risks associated with a lack of self-custody. The AMM model, widely adopted by GMX, Gains, Synthetix, etc., allows for on-chain self-custody, but liquidity can be limited, leading to poor execution and slippage for traders. On-chain decentralized order book exchanges are therefore considered by many to offer the best of both worlds. However, rather than having to spin up a custom application chain for efficient execution, order book DEXs can be seamlessly deployed on Monad, which is EVM-compatible across the entire stack.

One of the early builders on Monad is the Elixir protocol, a delegated proof-of-stake network that provides liquidity for a variety of order book exchanges. With Elixir, users can deposit liquidity into a variety of vaults that act as market makers for order book exchanges. Elixir is currently active on Vertex and RabbitX, with plans to be available on Injective, dYdX, Bluefin, Monad , etc.

In addition, native Monad content platform The Pipeline recently did a podcast interview with Pike Finance, who expressed early excitement about launching on Monad later this year. Pike Finance is a full-chain money market powered by Wormhole, Circle, and Pyth, which launched their beta on various EVM chains a few days ago.

Another use case is large-scale on-chain gaming that requires high throughput to function properly. “I think games sound really good on paper. You have this whole virtual economy and world, but you really need the performance of the underlying base layer to allow it to have a million daily active users. An example of this is playing Fortnite with your friends, if there are only 500 people playing at a time, that’s not that fun. You need to have a million of those people, right? That’s where it gets really interesting and competitive. On the gaming side, we allow games to scale from a few hundred active users at any given moment to millions.”

Monad appears to already be in discussions with game studios about building and enabling really high throughput games on the chain.

Roadmap

Monad is expected to launch on mainnet at some point later this year, probably Q3. So while it’s still early days for the chain, the internal testnet, an internal testnet, is going live soon.

There’s already a lot of interest from existing EVM protocols that want to bridge to Monad due to high scalability and EVM compatibility, but there are also teams that want to build native applications on the Monad blockchain. Additionally, Monad recently announced a partnership with Layerzero to build native applications on the Monad blockchain.

Given the huge interest from the community and developers, the hype around Monad will likely continue to grow until the public testnet and mainnet launch later this year.

Concluding Remarks

In a world where new L1 and L2 chains are launching almost every day, Monad stands out for its scalable technology, very capable team, and cult-like community. Since Monad is a single chain, I think its closest competitors are Solana and perhaps Sui. However, there are many different scaling approaches that are trying to gain adoption (rollups app-chains, modular stacks, etc.). Therefore, it will be interesting to see if Monad can attract liquidity, users, and developers in this highly competitive infrastructure environment, but given the huge anticipation already, it seems likely. While Monad It’s still early days, but it will be interesting to see what’s going on within its ecosystem.