Monad: Revolutionizing EVM Scalability with Parallel Execution

In the ever-evolving landscape of blockchain technology, a new player has emerged with the ambitious goal of supercharging the Ethereum Virtual Machine (EVM). Monad, a Layer 1 blockchain project, is making waves in the crypto community with its innovative approach to scaling the EVM through parallel execution. In a recent episode of the Lightspeed podcast, Keone Hon and Kevin G from Monad joined hosts Mert and Garrett to discuss their groundbreaking project and its potential impact on the blockchain ecosystem.

What is Monad?

Monad is a new EVM-compatible Layer 1 blockchain that brings pipelining and parallelization to the Ethereum Virtual Machine. At its core, Monad aims to deliver super high performance while preserving backward compatibility with existing Ethereum smart contracts and infrastructure.

Keone Hon, one of the founders of Monad, explained the project's essence:

"Monad is a new EVM layer one with full bytecode EVM compatibility that brings pipelining and parallelization to the Ethereum virtual machine. We have a number of different optimizations at different levels of the stack that ultimately deliver super high performance, while preserving backward compatibility for the Ethereum virtual machine."

This approach sets Monad apart in a crowded field of blockchain projects. While many are moving away from EVM compatibility or launching Layer 2 solutions, Monad is doubling down on improving the core EVM infrastructure.

The Team Behind Monad

The Monad team brings a wealth of experience from high-frequency trading and kernel development backgrounds. Keone Hon, who previously led the high-frequency trading team at Jump Trading, and Kevin G, a former core protocol developer at Solana Labs, are at the helm of this ambitious project.

Their collective expertise in building high-performance systems is evident in Monad's design philosophy. As Kevin G put it:

"The expertise of James and Keoni and all their years of building high fidelity systems, they like essentially figured it out, right? So at a high level, it's like an STM based approach."

This blend of financial market expertise and low-level system optimization skills positions the Monad team uniquely to tackle the challenges of blockchain scalability.

Pipelining: The Secret Sauce

At the heart of Monad's innovation is the concept of pipelining. But what exactly is pipelining in the context of blockchain technology? Keone Hon provided a clear explanation:

"Pipelining is the practice of utilizing all of the resources in the system efficiently by introducing stages of work and then scheduling that work intelligently so that we can maximize all the resources of the system."

In practical terms, this means that Monad can process multiple transactions simultaneously, making full use of modern multi-core processors. This is a significant departure from the current single-threaded nature of the EVM, which has been a major bottleneck in Ethereum's scalability.

Backward Compatibility: A Key Feature

One of the most intriguing aspects of Monad is its promise of backward compatibility with existing Ethereum infrastructure. This means that developers can potentially port their Ethereum applications to Monad with minimal changes, while benefiting from the increased performance.

Kevin G elaborated on how this backward compatibility works:

"Blocks in Monad are still linear. Transactions within those blocks are still linear and it's just at the time of execution. The individual nodes have a bunch of strategic parallelization to execute that list of transactions in a more efficient way while still arriving at the end state as if the transactions had just been executed one after the other."

This approach allows Monad to maintain compatibility with existing Ethereum tools and wallets while significantly boosting transaction throughput.

The Blockchain Trilemma: A New Perspective

The blockchain trilemma, a concept popularized by Ethereum co-founder Vitalik Buterin, posits that blockchain systems can only achieve two out of three desirable properties: decentralization, security, and scalability. Monad's approach challenges this notion, suggesting that algorithmic improvements can push the boundaries of what's possible.

Keone Hon offered a nuanced view on the trilemma:

"I think at the end of the day, there are these different axes on which one could grade a given blockchain system, and they're all really important considerations. I think of it as like, you know, if there are these three axes, then you have an efficient frontier, which is like a surface in this three-dimensional space that maybe is like the efficient frontier that we know of right now based on the systems that we have."

He further explained that it's still possible to make algorithmic improvements to deliver more scalability without sacrificing decentralization, or vice versa. This perspective aligns with the growing sentiment in the blockchain research community that the trilemma is not an absolute constraint but rather a challenge to be overcome through innovation.

Monad's Optimizations: Beyond Simple Parallelization

While parallel execution is at the core of Monad's design, the project incorporates several other optimizations to enhance performance. Keone Hon outlined four major areas where Monad introduces pipelining:

1. State access pipelining
2. Transaction execution pipelining
3. Pipelining between consensus and execution
4. Pipelining within the consensus mechanism itself

These optimizations work together to allow Monad to process transactions super efficiently, taking advantage of all the resources on the machine. Importantly, these improvements don't significantly change the hardware requirements from the Ethereum hardware spec, making Monad accessible to a wide range of node operators.

The Impact on DeFi and High-Fidelity Finance

One of the most exciting potential applications of Monad's technology is in the realm of decentralized finance (DeFi). Keone Hon expressed enthusiasm for what he calls "high-fidelity DeFi," which aims to offer users an experience comparable to or better than traditional finance.

He explained the concept:

"High Fidelity Finance means basically offering users same or better experience than they currently have in traditional finance. So in traditional finance, like, you know, trading liquid things, like trading S&P 500 ETFs or S&P 500 futures. And now Slippage is fractions of a basis point, like 0.3 basis points or less than that. That's the kind of experience that our team hopes will ultimately be achieved in decentralized finance."

Monad's low transaction fees and high throughput could enable liquidity providers to update their prices more frequently, leading to tighter spreads and less slippage for users. This could potentially bridge the gap between DeFi and traditional finance in terms of trading efficiency.

Scaling Beyond Current Limits

The scalability offered by Monad is truly impressive. While current Ethereum Layer 2 solutions aim for hundreds of transactions per second (TPS), Monad is targeting much higher numbers. Kevin G mentioned:

"Right now on the website, you say it can go up to 10,000 TPS, but in the future, you're hoping to hit like the theoretical limit of 400,000."

This level of scalability could open up new possibilities for decentralized applications, enabling use cases that were previously impractical due to throughput limitations.

The Role of Community in Blockchain Success

Both Keone and Kevin emphasized the crucial role that community plays in the success of any blockchain project. Keone Hon articulated this point eloquently:

"Community is everything. You know, no blockchain will be successful without acknowledging the importance of its community and ultimately delivering the goals that the community has in mind."

This perspective underscores the importance of not just technical excellence, but also community engagement and alignment with user needs in the blockchain space.

Monad's Approach to Tokenomics

When discussing the economic model for Monad, Keone Hon stressed the importance of delivering real value to end users:

"I think the fundamental thing is there has to be real value that's arriving to end users. At the end of the day, the reason that, I think about a bank analogy, you have a bank, they take deposits and they pay, you take your money to the bank, they give you some interest on your deposits, and then the bank goes and loans it out to someone else at a higher rate."

This approach suggests that Monad is focusing on creating a sustainable ecosystem where all participants can benefit, rather than simply maximizing token value in the short term.

The Future of Blockchain Design

The conversation touched on the ongoing debate between modular and integrated blockchain designs. Kevin G offered an interesting perspective on this:

"I think that you can't get around physics, right? And so like all these blockchains are gonna hit similar problems at some point. And like, I think like you end up coming to like, around where like the things, you know, Celeste used doing with data availability layers and like, you know, like clients are gonna be needed."

This suggests that as blockchain technology matures, we may see a convergence of different approaches as projects grapple with fundamental physical and computational limits.

Monad's Vision for the Future

Looking ahead, both Keone and Kevin shared their visions for what success would look like for Monad in the coming years. Kevin expressed hope for a "very scalable ecosystem where you can build like consumer facing products on it, you know, and take advantage of composability."

Keone painted an even more ambitious picture:

"The absolute best case scenario three years from now is that, you know, when you're walking around on the street, everyone has a cell phone in their pockets. Like everyone has a bunch of apps on their phone that are under, that have this underlying monad that's powering those applications."

This vision of widespread adoption and real-world impact underscores the transformative potential that the Monad team sees in their technology.

Challenges and Concerns

Despite the optimism, the Monad team is not blind to potential challenges. When asked about what scares them most about the project, Keone mentioned the risk of major hacks in the crypto space:

"For me, what scares me the most is if there's a massive, massive hack, either in Monad or, yeah, just even more broadly in the crypto space, I think that, you know, security is something we also have to take. We all have to take extremely seriously, and yeah, it's like, it's, you know, real people's money that is on the line, so just, that's probably the thing that scares me the most."

This concern highlights the responsibility that comes with building financial infrastructure and the need for robust security measures.

Monad's Place in the Ethereum Ecosystem

An interesting question raised during the discussion was whether Ethereum itself could adopt some of Monad's optimizations. While the team acknowledged that this is theoretically possible, they also pointed out the challenges involved in making such fundamental changes to a live system holding billions of dollars in value.

Kevin G explained:

"Arguably the runtime is the most dangerous thing to touch like in a live system. Because if you have like a state transition that's not expected, like all of a sudden the value profit of blockchain is putting the question, right?"

This underscores the value of Monad as a separate chain that can experiment with these optimizations without risking the stability of the main Ethereum network.

The Importance of Speed in Blockchain Development

One of the key pieces of advice that emerged from the conversation was the importance of speed and responsiveness in blockchain development. Keone Hon shared his experience:

"The biggest advice I have or biggest learning I have is just trying to be really fast. Like, you know, that manifests in a number of different forms. Obviously with respect to the product, like just trying to iterate as quickly as possible and get feedback."

This emphasis on rapid iteration and responsiveness could be crucial for Monad's success in the fast-paced world of blockchain development.

Potential Applications Beyond DeFi

While much of the discussion focused on DeFi applications, the team also expressed excitement about other potential use cases for Monad. Keone mentioned identity and achievements as areas of interest:

"I think that having achievements on chain, like things that you've done off chain that you could push on chain to be part of your, you know, passport, if you will, that's gonna be really powerful in the coming years."

This suggests that Monad's high throughput and low fees could enable new types of social and identity-based applications that were previously impractical on existing blockchains.

The Role of Monad in the Broader Blockchain Ecosystem

As the conversation wrapped up, it became clear that the Monad team sees their project not as a competitor to Ethereum or other blockchains, but as a complementary piece of infrastructure that can help push the entire ecosystem forward. Kevin G summed up this perspective:

"I think like all these solutions like essentially aim for different market segments, right? And different market segments are going to find these like interesting for their use cases. But we're just kind of taking an approach that like the typical app dev, right? It's going to want to just like build products. And if we can abstract and give them a full stack solution so that they don't have to worry about these like infrastructure pieces, I think that's like a pretty strong value problem, right?"

This focus on developer experience and abstraction of complex infrastructure could be key to Monad's adoption and success.

Conclusion: A Promising Step Forward for Blockchain Scalability

As the blockchain industry continues to grapple with the challenges of scalability and performance, projects like Monad offer a glimpse into a future where these limitations are overcome. By bringing parallel execution and other optimizations to the EVM, Monad has the potential to unlock new possibilities for decentralized applications and push the boundaries of what's possible in the blockchain space.

While challenges remain, and the project is still in its early stages, the team's expertise and vision are certainly compelling. As the crypto community watches Monad's progress with interest, it's clear that regardless of the outcome, projects like this are driving innovation and pushing the entire industry forward.

For developers, users, and investors in the Ethereum ecosystem, Monad represents an exciting development to watch. Its success could not only provide a new high-performance platform for decentralized applications but also inspire further innovation in the broader blockchain space. As we look to the future of decentralized technologies, Monad's approach to superscaling the EVM may well prove to be a significant milestone in the journey towards a more scalable, efficient, and accessible blockchain ecosystem.

Facts + Figures

• Monad is a new EVM-compatible Layer 1 blockchain that introduces pipelining and parallelization to the Ethereum Virtual Machine.
• The Monad team has been working on the project for about 18 months.
• Monad aims to process up to 10,000 transactions per second (TPS) initially, with a theoretical limit of 400,000 TPS in the future.
• The project maintains backward compatibility with existing Ethereum infrastructure and smart contracts.
• Monad implements pipelining in four major areas: state access, transaction execution, consensus and execution, and within the consensus mechanism itself.
• The team's background includes experience in high-frequency trading and kernel development.
• Monad uses a modified version of the Hot Stuff consensus algorithm.
• The initial version of Monad is expected to have around 150 validators, with potential for growth over time.
• Monad targets a minimum bandwidth requirement of 100 megabits up/down for nodes.
• The project aims to enable "high-fidelity DeFi" with liquidity and slippage comparable to traditional finance.
• Monad's design does not significantly increase hardware requirements compared to the current Ethereum spec.
• The team envisions widespread adoption of Monad-powered applications within three years.
• Monad's approach challenges the traditional blockchain trilemma by suggesting algorithmic improvements can enhance scalability without sacrificing decentralization or security.
• The project focuses on maximizing resource utilization, including bandwidth and processing power of nodes.
• Monad's tokenomics aim to deliver real value to end users, drawing parallels to traditional banking models.

Questions Answered

What is Monad and how does it differ from other blockchain projects?

Monad is a new EVM-compatible Layer 1 blockchain that introduces pipelining and parallelization to the Ethereum Virtual Machine. Unlike many projects moving away from EVM compatibility or launching Layer 2 solutions, Monad focuses on improving the core EVM infrastructure. It aims to deliver high performance while maintaining backward compatibility with existing Ethereum smart contracts and tools.

How does Monad achieve improved scalability?

Monad achieves improved scalability through a combination of pipelining and parallelization techniques. It implements pipelining in four major areas: state access, transaction execution, consensus and execution, and within the consensus mechanism itself. This allows Monad to process multiple transactions simultaneously, making full use of modern multi-core processors and maximizing resource utilization.

What is the potential impact of Monad on DeFi applications?

Monad's high throughput and low transaction fees could enable what the team calls "high-fidelity DeFi." This means offering users an experience comparable to or better than traditional finance, with tighter spreads, less slippage, and more frequent price updates. The improved performance could allow DeFi applications to handle higher volumes and more complex operations, potentially bridging the gap between decentralized and traditional finance.

How does Monad address the blockchain tri-lemma?

Monad challenges the traditional view of the blockchain tri-lemma by suggesting that algorithmic improvements can enhance scalability without necessarily sacrificing decentralization or security. The team views the tri-lemma not as an absolute constraint but as a challenge to be overcome through innovation. Monad's approach aims to push the boundaries of what's possible in terms of performance while maintaining a decentralized network.

What is the team's vision for Monad in the next three years?

The Monad team envisions widespread adoption of Monad-powered applications within three years. They hope to see everyday people using multiple apps on their phones that are powered by Monad's underlying infrastructure. The goal is to create a scalable ecosystem where developers can build consumer-facing products that take full advantage of the blockchain's composability and performance capabilities.

How does Monad maintain backward compatibility with Ethereum?

Monad maintains backward compatibility with Ethereum by preserving the linear structure of blocks and transactions at the interface level. The parallelization and optimizations occur during execution on individual nodes, allowing them to process transactions more efficiently while still arriving at the same end state as if the transactions had been executed sequentially. This approach allows existing Ethereum tools, wallets, and smart contracts to work with Monad with minimal modifications.

What are the main challenges or concerns for the Monad project?

The main concerns expressed by the Monad team include the risk of major hacks in the crypto space, which could undermine trust in blockchain technology. They also acknowledge the challenge of educating the community about their approach and addressing potential skepticism. Additionally, the team recognizes the need for careful implementation and testing to ensure that their optimizations don't introduce unexpected vulnerabilities or state inconsistencies.

How does Monad plan to attract developers and users to its ecosystem?

Monad plans to attract developers by offering a full-stack solution that abstracts away complex infrastructure concerns, allowing developers to focus on building products. The team emphasizes the importance of community engagement and aims to create an environment where developers can take advantage of increased performance and composability. For users, the promise of lower fees, faster transactions, and improved DeFi experiences could be major attractors to the Monad ecosystem.