Understanding Monad: An EVM-Compatible Layer 1 Solution for Parallel Execution

In the fast-expanding blockchain ecosystem, we see newer blockchain networks and applications popping up every now and then. They either enhance existing functionalities or offer novel features that the current blockchain landscape does not offer. One such innovative development from past months that has caught the attention of the crypto community is Monad.

We will discover in this research paper what Monad is and the benefits it brings to the scale of the blockchain industry. We also plan to elaborate on how it differs from existing leading blockchains – Ethereum and Solana – and how it will compete against them. Let's dig into it it.

What is Monad? The Monad solution is developed to renovate and enhance the scalability problem of present architecture. With new infrastructure and EVM-compatibility, Monad reaches up to 10,000 TPS in comparison with significantly more network efficiency. Its core development is based on the improvisation of the parallel execution capabilities of the Ethereum.

What differentiates Monad from other typical blockchain models is its smart development approach by way of parallel transaction execution. While the latter executes transactions in a mode of parallelism delivering optimal throughput, traditional blockchains instead settle for sequential transactions. Moreover, MonadBFT – the core consensus mechanism under Monad – unlocks greater efficiency while making sure transaction executions are smooth by a single second block timing.

Another prominent-feature of Monad is its compatibility with Ethereum Virtual Machine (EVM). It can interact fluently with EVM-bytecode even while retaining the state over Ethereum RPC and APIs. This actually defines Monad's commitment toward scalability, simplicity, and accessibility, as it allows the easier upscaling of dApps by Ethereum developers.

How Is Monad Different? Monad is a base layer blockchain, which supports parallel execution. This means that if Solana has taken the scalability approach, the similar functionalities of it are done on Ethereum. To fully understand how Monad is different, we first need to clear the concept of Parallel Execution on blockchain.

What is Parallel Execution? All EVM-based blockchains that exist as of now inherit the default infrastructure of Ethereum facing the drawback of sequential execution. This method allows the execution of only one transaction at a time which is highly inefficient. Although it can be helpful when simultaneous transactions depend on each other but if two transactions are independent, it raises a major issue.

Let's understand it with an example. Suppose Jack pays $5 to Jill and Jill has to pay $10 to Dave. In that scenario, the state needs to update Jill's balance first and then do a transaction to Dave hence the sequential execution is found necessary. But if Jack pays $5 to Jill and Bob pays $10 to Jill, in this scenario, then the interdependency would not be required. In that case also both the transactions can be done parallelly.

In some cases, the dependency of transactions is pretty obvious. For instance, a simple token transfer between two wallets affects no one else on the network, but transactions interacting with the same smart contract might alter the state so that it cannot be executed in parallel. Among many of the significant challenges while using parallel execution, one is querying interdependent and independent transactions.

How Monad solved Parallel Execution? The developers in the blockchain community came to realize this bottleneck and began to work on solving parallel execution. Some of the first projects to execute parallelism were Solana, which reached over 1000 TPS. However, to achieve this level of performance they had to design their very own VM that was not compatible with Ethereum.

Monad provides parallel execution for independent or non-dependent transactions of EVM. The transactions, independently lying in linear ordering, are executed all together without disturbing the outcome. All the independent transactions will be scheduled in parallel over different cores and a non-independent transaction will be scheduled back-to-back thereafter. This functionality enables Monad to process more in parallel without disturbing the state.

Furthermore, All the dApps that have originally been deployed on Ethereum and can use Monad to unlock hyper scalability. Using this approach, the developers of Monad claim they are capable of achieving over 10,000 TPS through pipelined execution as well as other innovations within their development.

Key-features of Monad Monad offers some features that seem to be successful from the point of view of a novel blockchain network. Followings are the key-features of Monad;

1 Second Block Time: The MonadBFT consensus allows for 1 second block finality where transactions are finalized in seconds.

Parallel Executions: While most of the EVM-based blockchain relies on sequential executions, Monad relies on parallel execution of transactions.

High Throughout: The high scalability of Monad results in high throughout with capability to achieve over 10,000 transactions per second.

Optimized Operational Cost: The transaction and implementation cost on Monad is lowest when compared with other leading blockchain.

Present Situation of Monad The current development stage of Monad is still in its development phase, but it has released the devnet as of March 2024. During the internal testing, Monad exceeded 10,000 TPS and was estimating block time at approximately 1 second. Developers stated that the testnet version will be released sometime in Q3 2024, while the mainnet launch is expected at the end of 2024.

The team behind the project, Monad, attracted massive investments, the latest of which is raising $225 million of funding in April. The funding round was led by the prominent crypto investment firm, Paradigm, besides other participants like Coinbase Ventures, Electric Capital, Castle Island Ventures, and others. According to the report, the team raised $19 million from Dragonfly Capital subsequent to a $9 million pre-seed and $10 million seed funding in 2022.

Next-gen blockchain architecture brought by Monad is fully geared up to leave a long-term mark on the blockchain industry. It has the propensity to become a hub for DeFi and smart contracts while flaunting features such as EVM-compatibility, massive scalability, and myriad innovations. The interest VCs have shown while fundraising indicates Monad could unlock a newer primitive in the crypto and decentralized application ecosystem.