9 April 2024
Venture Capital (VC) firm Paradigm is leading a substantial $225 million funding round for a new Layer 1 (L1) network, that aims to compete with the Ethereum (ETH) blockchain. Other notable participants include VC firms Electric Capital and Greenoaks.
According to a recent Fortune Magazine report, Monad Labs, the company behind the blockchain project, aims to compete with established players such as Solana (SOL) and Ethereum and the Layer 1 blockchain protocol Sui (SUI).
Monad’s Rebuilt Ethereum Blockchain
Per the report, Monad’s initiative is to rebuild the Ethereum blockchain from the ground up, while retaining the ability to execute smart contracts. The project aims to achieve faster transaction speeds, handle higher volumes, and offer lower costs compared to existing networks.
Notably, Monad ensures compatibility with Ethereum’s programming infrastructure, known as the Ethereum Virtual Machine (EVM). This compatibility allows developers to port applications built for Ethereum, ensuring a fluid transition to the new blockchain.
Keone Hon, the founder of Monad, stated in an exclusive interview with Fortune that the company has dedicated approximately two years to developing its blockchain solution.
Hon noted that Monad Labs stands out by fully supporting the EVM bytecode standard. Developers use this standard to create decentralized applications (dApps) on platforms such as Ethereum, Polygon, Avalanche, Binance Smart Chain, and Optimism.
According to Avichal Garg, managing partner of Electric Capital, nearly 90% of developers working across various crypto ecosystems focus exclusively on EVM chains.
This statistic, highlighted in a recent report by Electric Capital, demonstrates the significant appeal of EVM compatibility. Although Monad does not undergo a complete redesign of its programming language like some other blockchains, it still benefits from the widespread usage and familiarity of the EVM.
Blockchain-Powered Exchanges?
According to the report, Monad plans to launch its mainnet by the end of the year and expects to launch a testnet in the coming months. The company, which currently employs around 30 people, is also looking to launch a native token, although details of its launch alongside the mainnet have not been disclosed.
While Keone Hon emphasized the pursuit of mainstream adoption, he pointed out that Monad’s initial use case is likely to be “high-frequency” trading activity, drawing on his own experience at Jump Trading, a data and research-driven trading firm.
Hon emphasized the need for a highly performant blockchain to enable exchanges on the scale of Nasdaq or Chicago Mercantil Exchange (CME), which process millions to billions of transactions daily.
Lastly, Hon also highlighted the potential for a blockchain with high transaction capacity and low fees to enable various applications, such as gaming. He cited examples where blockchain-based games, such as RuneScape, require frequent updates of player statistics, necessitating low-cost and fast transactions on the blockchain.
At the time of writing, ETH was trading at $3,497, down nearly 5% in the past 24 hours.
Featured image from Shutterstock, chart from TradingView.com