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Monad is a high-performance Layer 1 blockchain that maintains full compatibility with Ethereum, pushing the boundaries of efficiency in the balance between decentralization and scalability.

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Founded in April 2022 by Eunice Giarta, Keone Hon, and James Hunsaker, Monad's story originates from a partnership that began in 2014. James and Keone collaborated on high-frequency trading (HFT) at Jump Trading, where they led a team of ten specialists. Keone served as the quantitative team lead, while James was the technical lead. Together, they built an ultra-low-latency trading system with sub-microsecond tick-to-trade times. Their team emerged as one of the world's top HFT groups, trading an average daily notional volume of $20-50 billion across traditional futures and cash markets.

In 2020, the team expanded into cryptocurrency trading and, in 2021, integrated into Jump Crypto, focusing primarily on Solana DeFi projects. By early 2022, they decided to leverage their expertise to co-found Monad alongside Eunice.

James and Keone's extensive experience in HFT, combined with Eunice's decade of fintech product management and technical leadership, solidified their conviction that significantly higher performance for the Ethereum Virtual Machine (EVM) was both necessary and achievable. However, accomplishing this would require a substantial overhaul of the execution and consensus layers. They identified the need to develop a custom database, now known as MonadDb, capable of efficiently storing Ethereum state while supporting parallel access.

Their prior experience in architecting new HFT systems and deep understanding of Solana and Ethereum equipped them with the insights needed to develop an extremely performant EVM-compatible Layer 1 blockchain.

Before delving into the technicalities that allow monad to achieve 10,000 TPS, let's have a look at some of their highlights this year; 

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Achieving 10,000 TPS

By implementing key optimizations in four critical areas, Monad achieves an impressive throughput of 10,000 TPS:

• MonadBFT: An advanced Byzantine Fault Tolerance consensus mechanism optimized for speed and security.
• Deferred Execution: Enhancing transaction processing efficiency by deferring execution steps.
• Parallel Execution: Utilizing parallelism to process multiple transactions simultaneously.
• MonadDb: A high-performance custom database designed for efficient blockchain data management and parallel access.

These innovations tackle existing bottlenecks without sacrificing compatibility for developers and users. Developers benefit from full EVM bytecode compatibility, allowing existing smart contracts and decentralized applications to run seamlessly. Users enjoy compatibility with the Ethereum Remote Procedure Call API, ensuring that wallets and other tools function without modification.

This seamless integration enables the extensive Ethereum ecosystem to leverage Monad's enhanced performance:

• Applications: Any dApp built for Ethereum operates effortlessly on Monad.
• Developer Tools: Popular development tools like Hardhat, Apeworx, and Foundry are fully supported.
• Wallets: Wallets such as Phantom and MetaMask work without any changes.
• Analytics and Indexing Services: Platforms like Etherscan and Dune can effectively analyze and index Monad's blockchain data.

The Monad client is engineered with performance as a top priority, developed from the ground up using C++ and Rust programming languages. The following sections will explore the major innovations introduced in Monad and provide details on the user interface.

Monad for Users

Monad offers users the best of both worlds: portability and exceptional performance.

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From a portability standpoint, Monad provides full bytecode compatibility with the EVM. This means applications built for Ethereum can be migrated to Monad without any code changes. Additionally, it offers full compatibility with Ethereum's RPC interface, allowing infrastructure tools like Etherscan and The Graph to operate seamlessly.

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In terms of performance, Monad delivers a throughput of 10,000 TPS, equivalent to 1 billion transactions per day, with block times and finality of just one second. This high performance enables Monad to support a significantly larger user base and more interactive experiences than existing blockchains, all while offering much lower per-transaction costs.

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Having assessed the above similarities, we can now delve into where the differences lie. 

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What's Different About Monad?

Monad achieves exceptional performance by introducing parallel execution and superscalar pipelining to the Ethereum Virtual Machine:

• Parallel Execution: This involves utilizing multiple cores and threads to execute tasks in parallel while committing results in the original order. Although transactions are processed in parallel behind the scenes, from the user and developer perspective, they are executed sequentially. The outcome is always the same as if the transactions were executed one after another.
• Superscalar Pipelining: This technique divides work into stages and executes these stages in parallel to improve efficiency. 

Consider the operations of a busy coffee shop as an analogy:

In a traditional approach, a barista handles one coffee order at a time from start to finish. They take the order, grind the beans, brew the coffee, add any requested flavors or milk, and then serve it to the customer before starting on the next order. This method is straightforward but not time-efficient.

In a pipelined coffee shop, multiple orders are processed simultaneously at different stages. While one barista is grinding beans for the second order, another is brewing the first order, and yet another is adding flavors to the third order. By overlapping these tasks, the coffee shop can serve more customers in less time, as all staff members and equipment are utilized effectively.

Monad introduces pipelining to address existing bottlenecks in state storage, transaction processing, and distributed consensus. Specifically, Monad incorporates pipelining and other optimizations in four key areas, which we briefly touched on at the beginning of this report:

1. MonadBFT: A pipelined version of HotStuff consensus with additional research improvements.
2. Deferred Execution: Pipelining between consensus and execution to significantly increase the execution budget.
3. Parallel Execution: Processing multiple transactions simultaneously for greater efficiency.
4. MonadDb: A high-performance state backend designed for efficient data management.

The Monad client, developed from scratch in C++ and Rust, embodies these architectural enhancements. Monad's approach differs from Solana's method of parallel execution, mainly in how they handle transaction dependencies. Solana requires transactions to specify the parts of the state they will interact with by creating access lists. These access lists determine which transactions can run concurrently, transactions with non-overlapping access lists are executed in parallel, while those that conflict are processed one after another. In contrast, Monad allows all transactions to be executed in parallel initially, and then re-executes any incompatible transactions sequentially.

Practical implications and the impact on users
Decentralized applications offer significant advantages over centralized services:

• Open APIs and Composability: dApps can be called atomically by other dApps, allowing developers to build complex functionalities by stacking existing components.
• Transparency: The logic of dApps is fully expressed in code, enabling anyone to review it for side effects. The state is transparent and auditable; in decentralized finance, proof of reserves is standard.
• Censorship Resistance and Credible Neutrality: Anyone can submit transactions or deploy applications on a permissionless network without restrictions.
• Global Accessibility: Essential financial services become accessible to anyone with internet access, including unbanked or underbanked users.

However, to realize their full potential, decentralized applications require affordable, high-performance infrastructure. For example, an app with 1 million daily active users making 10 transactions each would need to handle 10 million transactions per day, or about 100 TPS. A glance at L2Beat, a website summarizing the throughput and decentralization of existing EVM-compatible Layer 1 and Layer 2 solutions, shows that no EVM blockchain currently supports this level of throughput.

Monad significantly enhances the performance of an EVM-compatible blockchain network, pioneering innovations that could become standard in Ethereum in the future.

With Monad, developers, users, and researchers can leverage the extensive array of existing applications, libraries, and cryptographic research built for the EVM, all while enjoying unprecedented performance and scalability.

A closer look at MonadDb

MonadDb addresses a critical bottleneck in blockchain execution: efficient state access. Traditional blockchain systems often struggle with state management, particularly when retrieving smart contract data stored on disk. This inefficiency significantly hampers transaction processing speed and overall system performance, severely limiting the capabilities of most current blockchains.

In blockchain operations, state access involves retrieving residual contract data, such as token balances needed for swap operations. Accessing this information from the database can be time-consuming, typically taking between 10 to 20 microseconds per access. Simply parallelizing computation without optimizing state access yields minimal performance gains; the real challenge lies in simultaneously optimizing both computation and state retrieval.

To overcome these limitations, Monad developed MonadDb, a custom-built key-value store optimized for Ethereum Merkle tree data and efficient state management. MonadDb leverages modern hardware capabilities, including solid-state drives (SSDs) and multi-core processors, to maximize performance. It fully utilizes the bandwidth of SSDs and supports asynchronous input/output (I/O), employing technologies like io_uring on Linux for enhanced operational efficiency.

Unlike general-purpose key-value stores such as LevelDB or RocksDB, MonadDb is specifically designed for blockchain-related data structures and access patterns. This specialization enables more efficient parallel execution by reducing state access latency. MonadDb significantly reduces the time required for state retrieval, greatly improving upon the typical 10–20 microsecond range seen in traditional systems.

While Monad employs a highly specialized design, the architecture of MonadDb emphasizes a balance between performance and decentralization. It optimizes efficiency without requiring extreme hardware specifications, aiming for 32GB of RAM, which is significantly lower than the requirements of some other high-performance blockchains. This strategy contrasts with blockchains that heavily rely on increased RAM to alleviate state access bottlenecks.

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MonadDb maintains full compatibility with Ethereum's state structure, allowing for the efficient replay of Ethereum's block history by executing Ethereum test suites and processing historical data. This compatibility ensures that applications and data from Ethereum can seamlessly integrate with Monad.

In addition, MonadDb enhances Monad's parallel execution model by facilitating faster validation of transaction inputs and outputs during processing. The synergy between efficient state access and optimistic execution advances Monad's goal of achieving over 10,000 transactions per second.

Developing MonadDb was a significant challenge due to the specialized nature of key-value store development. Moreover, MonadDb's granular state access enables the system to differentiate between various components of a contract's state. For example, in an ERC20 token contract, transactions that affect different user balances do not conflict with one another. This fine-grained approach allows for more efficient parallelization of transactions.

Conflict detection occurs after the initial attempts at parallel execution. During this phase, the system examines which specific parts of the state were accessed or modified. Conflicting transactions are identified and then re-executed sequentially. This method promotes more efficient state access because accessing the same state reduces the need for costly disk reads.

A closer look at MonadBFT 

MonadBFT is Monad's proprietary BFT consensus mechanism, built upon a modified version of the HotStuff consensus algorithm. Its primary objectives are to achieve one-second block times and single-slot finality, with a focus on transaction ordering rather than execution. MonadBFT integrates innovations from various BFT research papers, including the Distributed Asynchronous Multi-leader Fault Tolerant (DAMFT) consensus.

The algorithm employs several optimizations to enhance consensus efficiency:

• Pipelining: This technique allows different stages of the consensus process to overlap, increasing overall efficiency.
• Deferred Execution: By separating block proposals from full state computation, the leader does not need to include the new Merkle root immediately. This separation provides more time to streamline both execution and consensus processes.
• Optimized Gossip Layer and Peer-to-Peer Network: The team has significantly improved the distribution mechanism by enhancing the gossip layer and peer-to-peer (P2P) network. This optimization focuses on the efficient broadcasting of proposals, potentially utilizing advanced tree structures.
• Probabilistic Assembly: This approach reduces the amount of data that needs to be transmitted, thereby increasing efficiency.
• Data Compression: The algorithm uses compression techniques, including optimistic and probabilistic compression, to minimize the volume of data transmitted.

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These optimizations offer several advantages:

• Increased Execution Budget: Provides additional time for transaction execution within each consensus round.
• Improved Resource Utilization: Enhances the efficient use of computational resources during block production.
• Reduced Network Overhead: Decreases the data transmission required to achieve consensus.
• Potential for Increased Throughput: Collectively supports higher transaction volumes.

MonadBFT's design philosophy centers on leveraging the latest research in Byzantine Fault Tolerance consensus mechanisms, prioritizing performance while ensuring security.

Unlike Cosmos-based chains that typically limit the number of validators to around 100, MonadBFT imposes no restrictions on the number of active validators. Monad plans to launch with approximately 150 validators, expecting this number to grow over time. This strategy fosters a more decentralized network while maintaining high performance.

MonadBFT employs a priority gas auction method to prioritize transactions based on their fee levels, arranging them from highest to lowest. This approach facilitates faster block times and achieves single-slot finality, aligning with Monad's goal of efficient transaction processing and high throughput.

In summary, MonadBFT's design includes a highly optimized gossip layer and peer-to-peer network, efficient proposal broadcasting using optimized tree structures, and the implementation of probabilistic assembly and data compression techniques. These choices lead to reduced data transmission and enhanced efficiency, contributing to Monad's high-performance capabilities.

An Overview of Monad’s Community 

As noted by DeSpread Research in their “Introducing a New Paradigm in Community Building” report, Monad’s recent surge in popularity stems not only from its high transaction speed but also from the vital role of its active and engaged community, which has been instrumental even before the testnet launch. Unlike most blockchain projects, Monad’s community participation is significant and regularly highlighted across social media. 

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Monad’s Community Structure and Design

Monad’s community is built around a tiered engagement system on Twitter, Telegram, and Discord, each serving distinct purposes. Twitter functions as the main branding outlet, while Discord and Telegram offer differentiated access based on member contributions. Early on, Monad struggled with user engagement, leading to stricter role criteria and a push for a wider range of activities. After a $19 million funding round led by DragonFly Capital in 2023, Monad opened its Discord server publicly, while reserving private Telegram groups for long-term, high-contributing members.

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Discord and Telegram Community Structure

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In Monad’s Discord, member roles dictate access and the scope of activities, encouraging users to participate actively for future rewards, especially with anticipation of potential token-related benefits. Community members engage in chatting, completing missions, and creating Monad-themed content, which has helped cultivate a unique identity with characters like Molandak and Moyaki that are now integral to Monad’s branding.

Telegram, meanwhile, serves as a more exclusive space for members with substantial contributions, providing a closer-knit environment. Active members here can advance to the “OG Chat,” where high engagement is consistently rewarded. To maintain this momentum, Monad employs “Thursday Purgeday,” a system that weekly removes inactive members, preserving a core of dedicated participants. Recently, Monad eased the pressure of mandatory weekly missions, recognising community fatigue, though Purgeday still reinforces active engagement.

Community Growth Strategy

Monad’s approach to community building deliberately breaks from the typical blockchain “playbook” that prioritizes metrics like follower count and Total Value Locked. Instead, Monad centers on brand identity through humor and meme culture, fostering a community that engages authentically. Guided by Kevin, Monad’s community strategy aligns with the Attention Economy model, where capturing genuine interest is valued over traditional advertising. The aim is to build a culture that resonates with audiences on a personal level, not just through numbers.

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Embracing Web3 Native Culture

Monad has tapped into Web3’s meme culture, establishing an identity centered on characters like a purple Pepe the Frog, which have become iconic within its community. These memes, created by community members, embody Monad’s playful and approachable image. Monad’s “Intern” social media account contributes by using humor to share project updates and engage the community.

To enhance its reach, Monad has integrated influencers like Kevin and Threadguy into its ecosystem. These Key Opinion Leaders are not only central to community engagement but also reinforce Monad’s unique brand ethos. Furthermore, Monad recruits long-standing community members as local representatives, ensuring its values are consistently expressed across its global community.

Building an Authentic Community

Monad’s Community Lead, Bill, believes that a true community goes beyond followers or users, it’s an interconnected space where members collaborate and create new value together. Much of Monad’s identity, from memes to videos and merchandise, is community-driven, with the foundation actively participating in initiatives like “Memes of the Week” to spotlight community creativity. The community’s self-organized meetups across Japan, China, Thailand, and South Korea underscore Monad’s commitment to genuine engagement, making it a standout model in the blockchain industry.

This holistic approach has transformed Monad’s community into a dynamic, interactive ecosystem, setting a new standard for blockchain projects focused on authentic, sustained engagement.

Conclusion

Monad represents a noteworthy advancement in blockchain technology by successfully combining high performance with full compatibility with the Ethereum ecosystem. Through key innovations like MonadBFT, Deferred Execution, Parallel Execution, and MonadDB, it addresses critical bottlenecks in state access and transaction processing. This allows Monad to achieve a throughput of up to 10,000 TPS while maintaining decentralization and security.

By ensuring full compatibility with the EVM and RPCinterface, Monad enables developers to seamlessly migrate existing smart contracts and decentralized applications without code modifications. Users can continue utilizing familiar tools like wallets and analytics platforms, benefiting from enhanced performance and lower transaction costs.

Additionally, Monad's commitment to building an engaged and authentic community sets it apart. By embracing Web3 culture and fostering active participation through platforms like Discord and Telegram, Monad cultivates a dynamic ecosystem that encourages collaboration and innovation among its members.

In summary, Monad aims to enhance blockchain scalability and performance while preserving compatibility with existing Ethereum tools and applications. Its technical advancements and community-focused approach contribute to the ongoing evolution of decentralized applications and services, positioning it as a unique product from both a tech and community standpoint.

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Disclaimer: One or more members of the Reflexivity Team are investors in Monad at the time of writing. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.

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