Monad Explained: Solana-Ethereum Hybrid L1 to Achieve 10,000 TPS

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Every year, we see new entrants in the layer one (L1) blockchain sector that look to outperform existing networks such as Ethereum (ETH) and Solana (SOL).

While most falter in their journey and fade into oblivion, there seem to be high expectations of a certain L1 project named Monad.

Backed by influential crypto venture capital funds like Paradigm and Dragonfly Capital, Monad is creating an L1 chain capable of achieving 10,000 transactions per second (TPS) by combining the best of Ethereum and Solana.

What is Monad, and how is it going to achieve such a high network throughput? We explain all that and more below.

Key Takeaways

  • Monad Labs’ investors include Dragonfly Capital, Paradigm, Coinbase Ventures, Wintermute Ventures and more.
  • Monad will make improvements to the EVM engine by introducing a transaction execution system pioneered by Solana.
  • There is no official announcement from Monad Labs regarding the MONAD token airdrop yet.
  • However, Monad introduced a campaign called “The Monad Social Credit Score,” which will “reward members who participate in Discord activities with XP.”
  • Monad mainnet is expected to launch later this year.

What Is Monad?

Monad is an Ethereum virtual machine (EVM)-compatible L1 blockchain that enables parallel execution.

New York-based Monad Labs is the development team behind Monad L1. It was founded by Keone Hon, James Hunsaker, and Eunice Giarta. Hon is the current CEO of Monad Labs.

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In February 2023, Monad Labs announced that it had raised a $19 million seed round led by Dragonfly Capital to build a new EVM L1 with “foundational improvements” to both consensus and execution.

A year later, in mid-March 2024, Monad launched its devnet, a live version of the Monad L1 that is not yet accessible to the public.

In April 2024, Monad Labs announced a $225 million funding led by Paradigm. Electric Capital, Animoca Ventures, Bankless Ventures, Coinbase Ventures, and Wintermute Ventures, among others.

Monad’s angel investors included crypto expert Eric Wall, Wormhole co-founder Robinson Burkey, LayerZero co-founder Bryan Pellegrino, Pudgy Penguins NFT creator Luca Netz, and crypto memer Inversebrah, among others.

Caption: Monad Labs announced a $225 million fundraise. Source: Monad Labs
Caption: Monad Labs announced a $225 million fundraise. Source: Monad Labs

Why Create Monad When We’ve Got Ethereum and Solana?

Monad is built to be an EVM-compatible blockchain.

EVM is the most popular smart contract computing engine in the world. According to data compiled by DefiLlama, as of April 12, 2024, EVM was responsible for nearly 90% of total value locked (TVL) across all blockchains.

The popularity of EVM has also made it battle-tested and reliable, making it a natural fit for new blockchain products entering production.

However, as the demand for crypto services grows, there is much to be desired from EVM chains from a throughput perspective.

Ethereum’s low throughput of about 14 TPS and high gas fees continue to be a much-published criticism against the leading smart contract L1.

While alternate EVM chains like Avalanche (AVAX), BNB Chain (BNB), and Polygon (MATIC) outperform Ethereum in throughput, their TPS still remains below the high-performance levels that Monad aims to achieve.

According to Chainspect, BNB Chain’s max recorded TPS stands at 2,222 TPS, Polygon’s stands at 649 TPS and Avalanche’s at 92 TPS.

Monad is aiming to achieve 10,000 TPS by making “deep optimizations” to EVM transaction processing. Monad’s long-term goal is to hit a network throughput of about 40,000 TPS.

Monad’s approach to helping crypto achieve global scale is different from that of Solana’s. The latter created a new virtual machine (VM) from scratch called Solana Virtual Machine (SVM), but this approach isolated its blockchain ecosystem from EVM-compatible chains.

Monad wants to leverage the popularity of the EVM engine and create a blockchain that can communicate with the capital-rich EVM ecosystem.

How Will Monad Achieve 10,000 TPS?

Monad will introduce a new transaction processing system called parallel execution to its EVM model.

Right now, EVM engines use sequential execution to process transactions. According to Monad, sequential execution is a bottleneck as it can only execute one transaction at a time.

In a parallel execution system, the blockchain will identify transactions that are independent of each other and will execute these transactions parallelly. Transactions with “common dependencies” are scheduled to execute consecutively.

Monad explained:

“A simple token transfer between two parties affects no one else. But transactions interacting with the same smart contract can change the state and therefore cannot execute in parallel. For example, an AMM swap could be routed through multiple pools, and all pools involved cannot process other transactions until the first is done.”

Solana has already introduced a parallel execution system called Sealevel. However, in creating a new VM to achieve this scalability upgrade, Solana has isolated itself.

Monad wants the best of both worlds: EVM compatibility and Solana-like parallel executions.

Monad Token Airdrop: What We Know So Far

As of April 12, 2024, there was no official announcement from Monad Labs regarding a MONAD airdrop.

However, as L1 blockchains need a native token for gas payment, it is safe to say that a MONAD token is expected to launch in the near future.

On Discord, Monad has introduced a campaign called “The Monad Social Credit Score,” which will “reward members who participate in Discord activities with XP.” Airdrop hunters are speculating the XP points system will be used when the MONAD token is distributed.

Monad’s Discord channel admin said:

“We believe that community contribution is key, so we will be tracking and honoring those that contribute across our platforms. No community input will go unnoticed.”

Monad’s Discord members get roles that reflect their time in the community and style of contribution. For example, a “Monvangelist” is a member who has “gone above & beyond and helped out in a significant way,” while a “NadOG” is a long-term contributor.

According to Monad’s Discord channel admin, NFTs will be given out in special events and competitions which will be “very beneficial to hold.”

On X, Monad’s ecosystem marketing team member named cryptunez warned airdrop farmers, saying:

“If you don’t want to “grind” in a discord, that’s great because that won’t get you anywhere in the monad community. Monad’s community rewards quality contribution and nothing else. It is designed this way because it is fair.”

Tokens are typically airdropped when a blockchain launches its mainnet. Monad recently launched its devnet in March 2024. Monad is expected to deploy its mainnet later in 2024.

The Bottom Line

Monad is the latest blockchain that emerged to challenge Ethereum’s position as the most popular smart contract platform.

Monad’s promise of achieving 10,000+ TPS is an exciting one, but we have learnt from past projects that blockchains are often forced to trade off either security or decentralization for scale.

What will it be for Monad? Time will tell.

FAQs

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Mensholong Lepcha
Crypto & Blockchain Writer
Mensholong Lepcha
Crypto & Blockchain Writer

Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to Capital.com, StockTwits, XBO, and other publications. He started his writing career at Reuters in 2017, covering global equity markets. In his free time, Mensholong loves watching football, finding new music, and buying BTC and ETH for his crypto portfolio.