As crypto markets boom again, various blockchains are racing to turn out to be the answer that drives demand in the subsequent wave, just as Bitcoin and Ethereum did in past cycles.
A brand new player on the scene, Monad Labs, closed a $225 million round led by Paradigm with additional funding from investors akin to Electric Capital and Greenoaks to construct a Layer 1 blockchain to tackle competitors akin to Solana and to challenge Sui. (Assets It was previously reported that Monad was in talks with Paradigm to lift $3 billion in March.)
In an exclusive interview, Monad founder Keone Hon said that Monad’s innovation relies on rebuilding the Ethereum blockchain from the bottom up – preserving the power to execute smart contracts while completing transactions at faster speeds, higher volumes, and lower costs . While other recent blockchains have an analogous value proposition, Monad is compatible with this system that powers Ethereum, the Ethereum Virtual Machine (EVM), meaning developers can port applications built for Ethereum.
“We are at the end of about two years of development,” Hon said. “At a time when much of the research community was focused on roll-up, data availability and other scaling directions, Monad essentially went very deep into the pure execution side.”
The crowded layer 1 landscape
Since Bitcoin’s launch in 2009, developers have introduced recent blockchains that promise a spread of latest features, from cheaper and faster transactions to applications akin to decentralized exchanges or lending protocols that may run on a blockchain.
Despite launching in 2015 with the innovation of smart contracts, Ethereum is struggling to maintain up with increased demand, meaning transactions often include high execution fees, referred to as “gas,” or are processed slowly. However, newer competitors – including Solana, which launched in 2020 – still promised faster speeds at lower costs Suffer of congestion problems.
Hon worked for eight years at Jump Trading, the secretive Chicago-based high-frequency trading firm, constructing systems that would process large numbers of transactions quickly. He soon joined Jump’s crypto division, working with Monad co-founder James Hunsaker.
“We realized that there is a great need for a more powerful EVM and that despite this need, no one has really worked on this problem,” said Hon Assets.
Unlike many recent blockchains, Monad will fully support EVM bytecode, the usual that many developers depend on when coding decentralized applications. Hon described EVM within the early 2000s because the Web3 equivalent of JavaScript – it’s utilized by blockchains akin to Ethereum, Polygon, Avalanche, Binance Smart Chain and Optimism. “Anyone who has built an app for one of these blockchains can port it to Monad without any changes.”
Avichal Garg, Managing Partner of Electric Capital, said that 90% of developers working on multiple crypto ecosystems work only on EVM chains, citing a Current report from his company. While which means Monad doesn’t get the identical advantages from redesigning its entire programming language as other recent blockchains like Aptos and Sui, Garg said it still reaps probably the most advantages from it.
“The way to go to market is to get EVM compatibility and dupe a lot of developers,” he said Assets. “For us, it felt like this was the playbook.”
“A much more powerful blockchain”
After educate Monad’s $225 million funding round, a $19 million seed round announced in 2023, represents the most important crypto fundraising round thus far in 2024, in line with Crunchbase’s Web3 Tracker, signaling that the bear market of the sector regularly begins to thaw. Paradigm, the crypto VC firm leading the round, is reportedly in the combo educate a brand new $750 million fund. Following a small bet on FTX, the round also represents one in all the primary crypto deals for Greenoaks Capital, the VC firm led by veteran investor Neil Mehta.
While Jump has launched quite a lot of crypto projects including Wormhole and Pyth Network, Hon said Monad is totally separate from the trading firm. Jump is embroiled in scandal over its role within the collapse of the so-called stablecoin project Terraform Labs led by Do Kwon, whose civil trial resulted in a guilty verdict in federal court last week. Hunsaker testified on the trial wherever it was revealed that he had filed a whistleblower criticism with the Securities and Exchange Commission against his former employer.
Given the brand new round of funding, Hon said Monad goals to deploy its mainnet by the top of the 12 months and a testnet in the subsequent few months. Monad Labs currently has around 30 employees and is planning a native token, although Hon declined to comment on whether it might launch with mainnet.
As crypto corporations proceed to chase widespread adoption, Hon said Monad’s first use case will likely be the form of high-frequency trading he did at Jump, noting that the world’s largest stock and futures exchanges trade between $500 million and $1 Process billion transactions per day.
“If we want the size of an exchange like NASDAQ or CME to be possible on the blockchain, we need a much more powerful blockchain than the one that currently exists,” he said Assets.
Hon also pointed to other applications that could possibly be enabled by a blockchain with high transaction capability and low fees, akin to gaming. In a program like Runescape, a player could collect 50 items in an hour, meaning a blockchain-based game would must update its stats each time, with each update representing a brand new transaction that have to be low cost and fast enough to be economical its purpose on a blockchain.
While VCs are betting big on Monad, Garg said his investment doesn’t preclude the success of other blockchains – just in numerous functions. “We don’t look at these ecosystems as a zero-sum model,” Garg said Assets. “Just because Facebook exists doesn’t mean Twitter, LinkedIn, Tiktok, Instagram and WhatsApp can’t exist.”
