As the cryptocurrency market resurges, various blockchains are vying to be the solution to drive demand in the next wave, just as Bitcoin and Ethereum have been in previous cycles.
New entrant Monad Labs has received additional funding from investors such as Electric Capital and Greenoaks to build a layer-1 blockchain to compete with competitors such as Solana and Sui. Completed a $25 million round. (luck It was previously reported that Monad was in talks with Paradigm to raise funding at a valuation of $3 billion in March).
In an exclusive interview, Monad founder Keone Hon said that Monad's innovation comes from rebuilding the Ethereum blockchain from the ground up, making it faster, more massive, and more efficient while retaining the ability to execute smart contracts. He said the transaction could be completed at a lower cost. While other new blockchains have similar value propositions, Monad is compatible with the Ethereum Virtual Machine (EVM), the program that powers Ethereum, allowing developers to port applications built for Ethereum. Masu.
“We have just completed it after about two years of development,” Hong said. “At a time when a lot of the research community was focused on rollups, data availability, and other scaling directions, Monad basically went very deep into the pure execution side.”
Crowded layer 1 landscape
Since Bitcoin's launch in 2009, developers have created new blocks that promise a variety of new features, from cheaper and faster transactions to applications such as decentralized exchanges and lending protocols that can run on the blockchain. We have introduced chains.
Ethereum launched in 2015 with the innovation of smart contracts, but has struggled to scale as demand increases. This means that transactions often have high execution fees called “gas” or are processed slowly. Recent competitors, including Solana, which launched in 2020, promise faster speeds at lower costs but still suffer from congestion issues.
Mr. Hong spent eight years at Jump Trading, a secretive high-frequency trading firm based in Chicago, where he built a system that could quickly process large volumes of trades. He quickly branched out into Jump's crypto division, working with Monad co-founder James Hunsaker.
“We realized that there was a huge need for a higher-performance EVM, and that despite this need, no one was seriously addressing this problem,” Hong said. Told. luck.
Unlike many new blockchains, Monad fully supports EVM bytecode, the standard upon which many developers build when coding decentralized applications. Hon described EVM as his Web3 equivalent of early 2000's JavaScript. EVM is used in blockchains such as Ethereum, Polygon, Avalanche, Binance Smart Chain, and Optimism. “If you have built an app for one of these blockchains, you can port it to Monad without any changes.”
Avichal Garg, managing partner at Electric Capital, cited a recent report from his firm stating that 90% of developers working on multiple cryptocurrency ecosystems work exclusively on the EVM chain. Ta. While this means Monad won't get the same benefits of redesigning the entire programming language like other new blockchains like Aptos and Sui, Garg said it will still get most of the benefits. said.
“The way to enter the market is to achieve EVM compatibility and suck in a lot of developers,” he said. luck. “For us, it felt like this was a strategy book.”
“A much more performant blockchain”
Monad's $225 million funding round, which follows a $19 million seed round announced in 2023, represents the largest crypto funding to date in 2024, according to Crunchbase's Web3 Tracker. This suggests that the sector's bear market is beginning to thaw. Paradigm, the crypto VC firm leading this round, has reportedly raised over $750 million in new funding. The round also marks one of the first crypto deals for Greenoaks Capital, a VC firm led by veteran investor Neil Mehta, after making a small bet on FTX.
While Jump has launched a number of crypto projects, including Wormhole and Pyth Network, Hon said Monad is completely separate from the trading company. Jump has been embroiled in a scandal for its role in 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. Mr. Hunsaker testified at the trial. revealed He reportedly filed a whistleblower complaint with the Securities and Exchange Commission against his former employer.
Armed with the new funding round, Monad aims to deploy its mainnet by the end of the year and testnet in the coming months, Hong said. Monad Labs currently has about 30 employees and plans for a native his token, but Hong declined to comment on whether it will launch on mainnet.
As crypto companies continue to pursue mainstream adoption, Hong said Monad's first use case will likely be high-frequency trading of the type he did at Jump, the world's largest stock exchange and futures exchange. cites between 500 million and 1 billion transactions being processed. per day.
“If you want to have an exchange the size of NASDAQ or CME on a blockchain, you need a blockchain that is much more capable than what exists today,” he said. luck.
Hong also pointed to other applications that can be enabled by blockchain, such as gaming, with its high transaction capacity and low fees. In a program like Runescape, a player could end up picking up his 50 items in an hour. This means that blockchain-based games need to update their statistics every time, with each update representing a new transaction, which needs to be cheap and fast enough to be economical. Sense on blockchain.
While venture capitalists are betting big on Monad, Garg said his investment doesn't preclude the success of other blockchains, just different capabilities. “We think about these ecosystems in a non-zero-sum way,” Garg said. luck. “Just because Facebook exists doesn’t mean Twitter, LinkedIn, Tiktok, Instagram, and WhatsApp can’t exist.”
