What is the Monad Blockchain? The Next Step in L1 Optimization

Monad is a Layer-1, EVM-compatible blockchain with a focus on optimizing the blockchain ecosystem. The blockchain has built optimizations into each aspect of the blockchain, including parallel transaction execution, an optimized consensus algorithm, and a more efficient database for recording transaction state data.

The Monad blockchain has received significant interest and over $225 million in funding. Its testnet is scheduled to go live in 2024, and the mainnet may launch later in 2024 as well.

Key Features of Monad

One of Monad’s central objectives is to optimize every aspect of the blockchain experience. As a result, it has developed custom versions of many of the key building blocks of the blockchain.

Ethereum Compatibility

Ethereum is currently the leader in the smart contract space in general and the DeFi space in particular. The majority of total value locked (TVL) in smart contracts is held on Ethereum, and other blockchains are competing to lure developers and market share away from the platform.

For this reason, many blockchains are designed to make this transition as painless as possible. 

This involves using virtual machines (VMs) that are compatible with the Ethereum Virtual Machine (EVM), allowing existing smart contracts to be ported over without the need for code rewrites.

Monad offers EVM compatibility at the bytecode level. This means that existing contracts can be redeployed on Monad with no changes.

Fast Transactions

One of the biggest limitations of Ethereum is that it can only process 15-30 transactions per second (TPS). This low transaction speed limits the network’s capacity and makes Layer-2 protocols essential for the protocol’s scalability.

Monad improves on this by offering transaction speeds of 10k TPS. By improving on the capacity of Ethereum by several orders of magnitude, this enables the blockchain to support more projects and ones that require rapid transaction finality.

In addition to increasing transaction throughput, Monad also has a block time of one second. This reduces the time that a transaction needs to wait before being included in a block, which is essential for low-latency dApps.

Parallel Transaction Execution

One of the key elements of Monad’s 10,000 TPS speeds is its support for parallel transaction execution. Most blockchains execute transactions sequentially to ensure synchronization across decentralized blockchain nodes. If transactions have interdependencies, executing them in different orders may change the result.

Monad performs optimistic parallel execution in which it attempts to predict dependencies and execute transactions across multiple virtual machines using an optimal schedule. After transactions are executed, the results are merged sequentially to preserve the original ordering.

Monad also performs asynchronous execution of transactions contained within a block. Once consensus has been achieved within a block, its transactions are executed in parallel with the next block’s consensus. This, along with parallel execution, contributes to Monad’s one-second block intervals and increases the blockchain’s scalability and efficiency.

MonadBFT Consensus Algorithm

MonadBFT is a custom Byzantine Fault Tolerance (BFT) consensus algorithm developed for Monad. Based on HotStuff, it has only two communication phases (down from three), improving efficiency. 

Achieving consensus is essential for the decentralized blockchain, and slow consensus can limit the rate at which new blocks can be created. Eliminating a round of communication in the consensus algorithm reduces the time it takes to create each block, enabling blocks to be produced closer together.

MonadDB

The EVM requires data to be stored in a data structure called the Merkle Patricia Trie (MPTs). This is a variant of the Merkle Trie and makes it easy and efficient to verify that data is included in the trie. MonadDB is a custom database designed to enable rapid access to state data from MPTs). This faster access supports the protocol’s parallel transaction execution and reduces the amount of RAM required to host a Monad node and participate in blockchain consensus and execution.

Monad Benefits

Monad has developed custom and optimized versions of many key blockchain functions. This provides numerous benefits compared to other protocols, including:

• Improved Scalability: Monad is capable of processing 10k TPS, which is far more than competitors like Ethereum, and offers parallel transaction execution. This offers much greater scalability within the native Layer-1 blockchain without the need to build upward into Layer-2 and Layer-3 protocols.

• Faster Transactions: With a high transaction speed and blocks created every second, transactions don’t need to wait long to be added to the blockchain’s immutable digital ledger. This enables Monad to support applications and use cases that are incompatible with slower block speeds.

• Ethereum Compatibility: Monad is bytecode-compatible with the EVM and uses building blocks and environments that are familiar to Ethereum developers. This makes it easy for smart contract developers to transition to the new platform.

• Potentially Cheaper Transactions: Limited space is one of the main drivers of high transaction fees on Ethereum and similar blockchains. By expanding capacity, Monad has the potential to offer lower transaction fees than competitors.

• Expanded Accessibility: Operating a full blockchain node requires a certain investment in hardware with the memory, RAM, and CPU required to track the current state of the digital ledger and execute transactions included in new blocks. Monad is attempting to optimize every aspect of the blockchain, making it possible for users to run nodes with lower hardware requirements.

Securing Monad Smart Contracts

Currently, the Monad testnet and mainnet are not live, limiting opportunities for developers to start taking advantage of the platform’s numerous benefits. However, these launches are anticipated in 2024, meaning that many smart contracts may be developed for or redeployed on Monad.

Monad’s EVM compatibility means that it inherits the same smart contract security risks that are present on the Ethereum blockchain. As smart contracts are deployed on Monad and grow in value, they may be a significant target for attackers. Additionally, the rapid transaction and confirmation speeds that are such a benefit for developers may also be a boon for attackers since they decrease the time that a protocol has to identify and respond to an attack.

When deploying code on Monad or other blockchains, it’s important to first perform a comprehensive security audit. For help in protecting your on-chain project against vulnerabilities that could leave it vulnerable, reach out to Halborn.