What is Monad: rethinking EVM scalability with parallel processing

With the explosive rise of Solana and Move-powered Layer-1 blockchains like Sui and Aptos, it seems the crypto market is weighted towards blockchains focused on scalability. Interestingly, while these blockchains possess remarkable throughput and speed, they lack one key factor — Ethereum Virtual Machine (EVM) compatibility. As a high-performance smart contract platform, Monad seeks to fill this gap. In fact, the project team claims to have achieved hyper scalability while providing compatibility within the Ethereum ecosystem.

Curious about how Monad achieves this? From learning about Monad's origins to highlighting the fundamentals of the tool's parallel processing capabilities, here's all the insight you need to understand what Monad is and why it's making such a big wave in the crypto scene.

What is Monad?

Monad is a new Layer-1 blockchain designed for speed and interconnectivity. Built from the ground up to be EVM compatible, Monad's emphasis on pipelining allows it to achieve feats like 10,000 transactions per second, one-second block times, and single-slot finality. Combining sophisticated technologies like MonadBFT, Deferred Execution, Parallel Execution, and MonadDB, Monad becomes a familiar yet exciting Layer-1 blockchain. Developers can leverage their existing Ethereum knowledge and tools to build on Monad, while users can benefit from faster transaction processing times and potentially lower fees.

What is Monad Labs?

Founded in 2022, Monad Labs is a venture-backed tech startup. Bringing years of experience in building low-latency, high-frequency-trading systems at Jump Trading, Monad Labs aims to address the limited throughput and high cost of existing Layer-1 solutions with its Monad blockchain. According to co-founder and CEO of Monad Labs Keone Hon, Monad can set the industry standard for the speed, transparency, security, and scalability that all Layer-1 protocols should have to fully unlock the transformative potential of decentralized computation.

Why's Monad so popular? Understanding scalability bottlenecks within EVM constraints

If you're a blockchain beginner, you might be wondering why Monad is generating such a wave of hype and excitement across the crypto space. Before exploring the issues Monad solves, here's a brief rundown on why blockchain bottlenecks may occur.

Blockchain bottlenecks and the call for scalability

Let's use a busy road as a simplified analogy for a blockchain:

  • Cars getting from point A to point B act as the number of transaction requests.

  • The number of lanes represents the blockchain's throughput abilities.

  • The traffic lights act as the consensus mechanism that dictates if cars can pass.

In short, every transaction needs to be verified and added to a block. However, due to limited block space and high demand, this creates congestion that often leads to sluggish transaction times and high transaction fees. One of the first times the crypto community encountered this problem on a mass scale was with the CryptoKitties Ethereum network congestion.

Thanks to sequential processing, traditional blockchains can only handle a limited number of transactions at a time. Each transaction needs to wait for the one before it to be validated and added to a block before its own processing can begin. This creates a queue, similar to cars waiting at a traffic light, which slows down the overall throughput of the network.

During periods of high demand, transaction fees can skyrocket as users compete to have their transactions processed faster. To address this, many of today's blockchains were created with such scalability worries in mind and are primed to offer high throughput to meet the rising demands of Web3 users.

With Monad, users can theoretically enjoy the best of both worlds since the Layer-1 boasts rapid transaction processing while remaining compatible with Ethereum. This allows seamless integration of the vast Ethereum developer toolkit and cryptographic research into Monad, all while benefiting from significantly improved throughput and scalability.

How does Monad work?

With more than $200 million in funding secured from venture capitalists like Paradigm and GSR Ventures, alongside angel investors like Hsaka and Ansem, Monad has attracted plenty of attention and scrutiny. Let's explore the project's functionality in more depth.

Monad's EVM compatibility

Monad achieves EVM compatibility by implementing a custom EVM within its architecture. This custom EVM is designed to be compatible with the bytecode instructions used by Ethereum smart contracts. While the specifics might not be publicly available, here are some possible ways Monad achieves this:

  • Instruction set matching: Monad's EVM likely replicates the core instruction set of the Ethereum EVM, making sure of compatibility with existing smart contract code.

  • State management: Monad needs to manage its blockchain state in a way that's compatible with how Ethereum smart contracts expect to interact with the blockchain.

  • Potential optimizations: While maintaining compatibility, Monad might have optimizations in its EVM implementation to leverage its underlying architecture for better performance.

Overall, Monad's EVM compatibility is a strategic approach that allows it to leverage the existing Ethereum developer ecosystem and accelerate its own growth.

MonadBFT

MonadBFT is the secret behind Monad's blazing-fast transaction speeds. Put simply, it's a custom-designed Byzantine Fault Tolerance (BFT) consensus mechanism that quickly verifies transactions, even if some validator nodes are faulty or malicious. Unlike traditional BFT consensus mechanisms which can be sluggish, MonadBFT takes a two-phased approach, leveraging optimistic responsiveness with linear communication overhead in the common case.

However, in the event of a leader timeout, communication overhead complexity increases to be quadratic, which helps keep the network stable. This ultimately reduces bottlenecks within Monad and makes sure transactions can flow smoothly.

Deferred execution

Pegged as pipelined consensus-execution staging by Monad Labs, deferred execution refers to the process of separating consensus and execution, both of which are critical blockchain processes. To recap, consensus involves all nodes in the network agreeing on the order of transactions that'll be included in the next block. Traditionally, this happens alongside transaction execution. Execution refers to the actual process of running the code within each transaction, updating the blockchain state accordingly.

In the case of Monad's deferred execution, it works in a streamlined parallelized fashion. The leader node proposes a block containing the order of transactions without executing them yet. Validator nodes in the Monad network then verify the proposed order and vote on its validity. Instead of confirming the outcome of each transaction, the nodes only need to confirm the order is correct. Finally, after reaching consensus on the order, the execution of the transactions happens separately, either in parallel or shortly after. Deferred execution ultimately unlocks a host of benefits, including faster block confirmation, increased scalability, and more efficient resource usage.

Optimistic execution to execute transactions in parallel

At its core, Monad makes use of optimistic execution. Think of this as a method of executing transactions before they're fully validated. This allows for parallel execution, where multiple transactions can be processed simultaneously, significantly boosting throughput while keeping Monad blocks linearly ordered. The catch here is that optimistic execution introduces the possibility of incorrect execution and data conflict as multiple transactions may try to modify the same data. Monad addresses this by keeping track of the pre-conditions each transaction relies on during execution. If a conflict is detected after the initial optimistic phase, only the problematic transaction is re-executed with the correct data. Overall, this guarantees consistency and ensures eventual data integrity within the Monad blockchain.

MonadDB

As a proprietary database that's instrumental to Monad's parallel execution capabilities, MonadDB specializes in storing essential data of the current blockchain state, including accounts, balances, and smart contract code. Unlike traditional blockchains that store the entire transaction history, MonadDB focuses on the current state to optimize for faster reads and writes during parallel execution. Aside from its blockchain state storage capabilities, MonadDB supports optimistic execution by interacting with transactions during Monad's execution phase. This provides the temporary state data required by transactions, allowing them to run concurrently without interference. After the initial optimistic execution, MonadDB participates in resolving any conflicts that might occur between transactions attempting to modify the same data. It does this by comparing the transaction's inputs with the outputs of previous transactions, effectively verifying the pre-conditions each transaction relied on during execution.

Strengths of Monad

Monad's innovative approach offers many exciting benefits for users and developers:

Faster transaction times and lower fees

With parallel processing, Monad can handle a significantly higher volume of transactions per second. This translates to quicker confirmations and a smoother user experience. Also, as the network becomes more efficient with parallel processing, transaction fees are expected to decrease. This could make it more affordable to use the Monad blockchain for everyday transactions, opening the door to broader adoption.

Accelerated ecosystem development

Monad's EVM compatibility allows developers familiar with Ethereum to easily deploy smart contracts on Monad. This reduces overall development friction and fosters a larger developer community as existing Ethereum developers can apply their existing expertise with little need to learn entirely new toolsets. This helps to create a larger developer community around Monad, accelerating innovation and expanding the applications that can be built on the platform.

Building on top of Ethereum's foundations

Fledging non-EVM blockchains often face the same pain point in that they find it tough to build an ecosystem from scratch. Thankfully, this won't be the case with Monad, as it has the potential to inherit the vast developer community and user base associated with Ethereum. With mass adoption on its doorstep, this could allow for faster innovation and a wider range of applications on the Monad platform.

Challenges Monad may face

Monad has the potential to be a game-changer in the blockchain space. Its focus on Layer-1 scalability addresses a critical bottleneck hindering widespread blockchain adoption. However, it's important to take a holistic view and consider the potential challenges:

Technical complexity

Although parallel processing and MonadBFT offer clear benefits, they introduce complexities in the form of maintaining data consistency and handling potential conflicts between concurrent transactions. Debugging and identifying issues in parallel execution can also be more challenging compared to traditional sequential processing

Decentralization trade-offs

Some aspects of Monad's design, like the custom EVM and MonadDB, may raise questions about decentralization compared to the solutions employed by permissionless blockchains. Looking ahead, finding the right balance between scalability and decentralization looks to be an ongoing challenge in Monad's design.

Centralization concerns over VC association

While some may tout the massive investments from institutions as a win for Monad, Venture Capital (VC) firms may have a vested interest in influencing the platform's direction. This could potentially impact its neutrality and permissionless nature, particularly regarding future token distribution or governance decisions. Additionally, a heavy reliance on VC funding might create a perception that Monad prioritizes financial gain over fostering a strong organic community.

Novelty and adoption

As a relatively new platform, Monad might face challenges in gaining user and developer adoption compared to established blockchains with larger ecosystems and existing user bases. Building trust, demonstrating real-world use cases, and offering developer-friendly tools will be essential for overcoming this hurdle.

Monad vs existing Layer-1 solutions: a comparative analysis

The quest for scalability has spurred the development of various blockchain solutions besides the parallel processing seen with Monad. Here's a quick comparison of Monad with some prominent players:

Ethereum vs Monad

As the leading smart contract platform among developers due to its established ecosystem and strong developer base, there's a good reason why up-and-coming blockchains like Monad try to position themselves as Ethereum killers.

With the recent Dencun upgrade working to address Ethereum's scalability limitations to some extent by introducing sharding functionality, Ethereum is making significant progress towards improving its throughput. However, the full potential of sharding on Ethereum is still being rolled out in phases, and achieving significant scalability improvements might take time as the Ethereum Foundation works to fully execute its roadmap.

In the meantime, Ethereum might still rely on Layer-2 scaling solutions, which can introduce additional complexity for users. This is compared to Monad, which aims to be a pure Layer-1 blockchain solution that potentially offers faster transaction processing without the compromise of using Layer-2 solutions and streamlines the overall user experience. However, achieving scalability solely on Layer-1 can be technically challenging, and Monad will need to effectively implement sharding and optimistic rollups to meet its performance goals.

Solana vs Monad

Often hailed for its impressive transaction speeds and widespread adoption within the cryptocurrency community, Solana applies a unique combination of Proof of History (PoH) and Proof of Stake technology to achieve high throughput. This innovative approach has positioned Solana as a major player in the blockchain space, particularly within the DeFi arena where speed tends to be key.

However, Solana's consensus mechanism raises questions about decentralization as Solana's PoH partially relies on a centralized validator for timestamps. This raises concerns about the network's ability to resist censorship or manipulation. As mentioned in our Solana guide, the project is actively working on decentralizing its validator set to address these concerns. On the concern of decentralization and security, Monad relies on a single secure main chain. This approach makes sure that all transactions are validated on the main chain, potentially offering a more robust and censorship-resistant system compared to Solana's partially centralized PoH.

However, relying solely on the main chain for processing can limit scalability. To address this, Monad adopts sharding and optimistic rollups, which are techniques for parallelizing transaction processing and reducing strain on the main chain. While this approach offers potential scalability improvements, it adds complexity compared to Solana's simpler architecture.

Sui V2 and Aptos vs Monad

Both Sui V2 and Aptos are high-performance, Move-powered Layer-1 blockchain contenders designed for scalability and security. Like Monad, these projects apply a parallel processing approach through sharding, and aim to boost transaction throughput.

However, unlike Monad, which leverages EVM compatibility, Sui V2 and Aptos employ their own custom programming languages and virtual machines. This choice presents significant points of differentiation. EVM compatibility allows developers familiar with the vast Ethereum ecosystem and its widely used Solidity language to easily transition to building applications on Monad. This can significantly accelerate developer adoption and ecosystem growth for Monad.

Additionally, EVM compatibility provides access to a large pool of existing tools and libraries, reducing development time and effort. Although custom programming languages and virtual machines allow Sui and Aptos to cater to specific developer needs and potentially foster a new developer base, this can create a barrier to entry for developers only familiar with the vast EVM ecosystem. It remains to be seen if Monad's EVM compatibility proves advantageous in the long run compared to potential optimizations offered by custom languages.

How Monad differentiates itself as a Layer-1 blockchain

Monad positions itself strategically within the Layer-1 landscape with a focus on Layer-1 scalability, EVM compatibility, and a lack of compromise for blockchain security and decentralization. With these solutions in mind, Monad immediately stands out thanks to its focus on Layer-1 scalability. This ultimately offers a potentially more secure and decentralized solution compared to other alternatives.

Unlike many existing chains that struggle with slow transaction times, Monad employs parallel processing and a variety of innovative mechanisms mentioned above to achieve significantly higher throughput of up to 10,000 transactions per second. This focus on Layer-1 scalability sets it apart from some alternatives that rely on Layer-2 solutions or entirely different consensus mechanisms.

While security and decentralization remain crucial considerations, Monad prioritizes both by keeping the main chain as the ultimate authority on truth. As Monad continues its development journey, its potential to revolutionize how blockchain transactions are processed is certainly worth watching.

Getting involved with Monad

As Monad is still under development, information on directly using the network or developing decentralized applications (DApps) on it can be limited. However, there are ways to stay informed and potentially get involved as the project progresses:

  • Follow Monad Labs: Keep an eye on Monad Labs' official channels for updates on development progress, testnet launches, and potential future airdrops.

  • Monad testnet: While nothing official has been announced, participating in a Monad testnet could be a great way to learn more about the technology and contribute to its development by testing applications and reporting bugs. It could also be your ticket to a future Monad airdrop as a 'thank you' for interacting with the Monad ecosystem.

  • Monad Social Credit Score: One probable way you can get involved with Monad is with the much-talked-about Monad airdrop, which may be obtained via Monad's Social Credit Score. While details on possible rewards are kept vague, Monad's community team hints that no community input will go unnoticed. To begin contributing, you can start by joining the project's official Discord server. Once there, locate the social credit server and you'll find all the relevant information there. In short, you can gain social credit in several ways, including the following:

  • Discord XP: These points are awarded by the Monad community team for participating in Discord activities, and carrying out tasks like asking questions before regular ask-me-anything events and winning community poker nights. You can check the Monad XP leaderboard to see your current rank.

  • Roles: Discord roles ranging from NadOG (long-term supporters and contributors) to Monartist (creators of high quality art) are given to contributing community members. You can find the full list of roles on the social credit server.

  • POAPs: Short for Proof of Attendance Protocols, POAPs and non-fungible tokens are rewarded to community event participants. According to Monad, these are "very beneficial to hold".

  • NAD list: Community engagement isn't limited to Discord interaction as Monad's community team could add you to their NAD list on X if you're qualified.

  • Team recognition: This seems to be a general role rewarded to users that are involved in some way, whether joining in on conversations or contributing to asset creation.

Monad Social Credit Score
Source: discord.com/invite/monad

(Credit: Monad Discord)

While there's no confirmation of a Monad airdrop at this point, staying informed about project developments can help you to capitalize on such opportunities should they happen, and be rewarded with distributed tokens as an early adopter.

The road ahead for Monad

Monad is a promising project with the potential to revolutionize the blockchain landscape. To this end, parallel processing will be something to watch out for. However, the project is still under development, and its success will depend on overcoming technical challenges and building a strong ecosystem.

Here are some key areas to watch as Monad progresses:

  • Mainnet launch: The launch of the mainnet in Q4 2024 will be a significant milestone, signifying the project's transition from a test environment to a fully functional blockchain network.

  • Ecosystem development: The growth of developer adoption and userbase growth on the Monad network will be crucial for long-term viability.

  • Use cases: The success of Monad will hinge on its ability to power DApps that demonstrate the benefits of Monad's impressive scalability and efficiency.

Final words and next steps

The world of cryptocurrency is constantly evolving, and Monad is a project to watch closely. Its innovative approach to Layer-1 scalability with parallel processing has the potential to pave the way for a new era of faster, cheaper, and more efficient blockchain transactions. While there are challenges to overcome, Monad's robust focus on interconnectivity, scalability, and community growth makes it a compelling contender in the race for blockchain supremacy.

Interested in learning more about Layer-1 blockchains and the innovative ways in which they overcome sequential processing bottlenecks? Read up on our guides to Polkadot for its use of Parachains and Cardano's use of decentralized Proof of Stake.

FAQs

What are the tokenomics of Monad?

Monad's tokenomics haven't been fully revealed yet. However, you can expect information on token supply, distribution model (e.g., staking rewards, potential airdrop), and utility within the ecosystem to be released closer to the mainnet launch. Keep an eye on Monad Labs' official channels for updates.

Is Monad environmentally friendly?

The environmental impact of blockchain technology is an important consideration. While Monad's focus on Layer-1 scalability could potentially lead to lower energy consumption compared to Proof of Work blockchains like Bitcoin, the exact energy footprint will depend on the specific consensus mechanism employed. It's important to stay informed about Monad's chosen consensus mechanism and its environmental implications.

How is Monad different from other Layer-1 blockchains?

Monad stands out in the crowded field of Layer-1 blockchains with its innovative approach to scalability. Unlike many existing chains that struggle with slow transaction times, Monad employs parallel processing through sharding and optimistic rollups to achieve significantly higher throughput. This focus on Layer-1 scalability sets it apart from some alternatives that rely on Layer-2 solutions or entirely different consensus mechanisms. While security and decentralization remain crucial considerations, Monad prioritizes both by keeping the main chain as the ultimate authority on truth. As Monad continues its development journey, its potential to revolutionize how blockchain transactions are processed is certainly worth watching.

Is Monad good to trade?

Monad is a promising project with a compelling approach to scalability. However, it's important to remember that cryptocurrency trading is inherently risky. Before trading Monad (or any other cryptocurrency), conduct thorough research, understand the project's potential and limitations, and only trade what you can afford to lose.

What are the potential applications of Monad?

Monad's high-throughput blockchain could be used for a wide range of applications, including:

DeFi: Faster transaction speeds and lower fees could make Monad suitable for building DeFi applications like lending platforms, decentralized exchanges, and yield-farming protocols.

Supply chain management: The secure and transparent nature of blockchain technology, combined with Monad's scalability, could revolutionize supply chain management by tracking goods and confirming provenance.

Non-fungible tokens (NFTs): Monad's efficiency could streamline NFT minting and trading, encouraging the growth of the NFT ecosystem.

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