Monad's Innovations: Solving Layer 1 Bottlenecks with Parallel Processing

The search for scalability in the crypto market is intensifying day by day. Solana’s incredible speed, the rise of Move-supported layer-one solutions like Sui and Aptos—all point to a single issue: traditional blockchains are falling short in speed and efficiency. However, these high-performance chains often sacrifice Ethereum Virtual Machine (EVM) compatibility, preventing them from leveraging the extensive Ethereum ecosystem. Monad emerges as a different promise in this landscape: providing hyper-scalability while maintaining EVM compatibility.

So, how does Monad achieve this? By harnessing the power of parallel processing technology, Monad can handle 10,000 transactions per second and reduce block times to one second. This article will delve into Monad’s architecture in detail, explaining why it has captured so much attention in the blockchain world.

Monad: The Architect of Speed Revolution in the EVM World

The new layer-one blockchain, Monad, was designed with a single goal from the start: to radically increase transaction capacity while maintaining EVM compatibility. The technical solutions offered by Monad—MonadBFT consensus mechanism, deferred execution, parallel transaction processing, and its proprietary MonadDB database—are what set it apart from traditional layer-one solutions.

For developers, this means they can continue working with existing Ethereum tools, use the same Solidity language, but enjoy much faster and cheaper transactions. Users benefit from shorter confirmation times and potentially significantly lower transaction fees.

Monad Labs: From High-Speed Trading Heritage to Blockchain

Founded in 2022, Monad Labs was born out of experience at Jump Trading. The team that designed low-latency, high-volume transaction systems at Jump brought that expertise into blockchain. According to Keone Hon, co-founder and CEO, Monad can set industry standards in speed, transparency, security, and scalability.

Having raised over $200 million from investors like Paradigm, GSR Ventures, Hsaka, and Ansem, Monad has attracted considerable attention in the crypto space. But this success is not just financial; it is backed by a technological vision.

The Bottleneck of Blockchains: Why Were Bottlenecks Inevitable?

To understand why Monad is important, we first need to dig into the root of the fundamental problem with blockchains. Let’s explain this with a concrete metaphor:

Imagine a highway with cars following each other. The number of cars represents demand, the number of lanes represents transaction capacity, and traffic lights are the consensus mechanism. Traditional blockchains—especially Ethereum—perform sequential processing. Each transaction waits for the previous one to be confirmed before starting the next. This structure leads to queues during periods of high demand.

The congestion caused by CryptoKitties clogging Ethereum in 2017 made this problem visible worldwide. Since then, the crypto community has been seeking scalability solutions. During high demand, users compete to speed up their transactions; the result is rapidly rising transaction fees.

Monad’s core insight is simple but powerful: use parallel execution instead of sequential processing. This is not just about speed; it’s about how to achieve this without losing EVM compatibility.

The Building Blocks of Monad: Architecture of the Parallel World

Monad’s architecture is built on four fundamental pillars:

MonadBFT: Compatible Consensus

MonadBFT is a specially designed Byzantine Fault Tolerance mechanism. Traditional BFT protocols can be slow; MonadBFT solves this with a two-phase approach. Under normal conditions, it operates with linear communication overhead—fast and efficient. If the leader times out, the system switches to quadratic complexity but maintains network stability. Result: a smooth, congestion-free transaction flow.

Deferred Execution: Separating Consensus and Execution

This is a key innovation of Monad. In traditional chains, consensus (agreement on transaction order) and execution (running transactions) happen simultaneously. This sequential dependency limits scalability.

Monad does the opposite: the leader proposes a block with the transaction order before executing the transactions. The network reaches consensus on this order. Then—parallelly—transactions are executed. This separation significantly increases the chain’s transaction capacity.

Parallel Execution and Optimistic Processing

Monad executes multiple transactions simultaneously—something traditional blockchains cannot do. But there’s a risk: multiple transactions might try to modify the same data. Monad manages this with an “optimistic” approach.

Here’s how it works: while transactions run in parallel, their preconditions (which data they read) are recorded. After execution, conflicts are checked. Conflicting transactions are re-executed only with correct data. This preserves data consistency and boosts speed.

MonadDB: Storage for the Parallel World

MonadDB is a proprietary database designed to store the blockchain state (accounts, balances, contract code) in a way suitable for parallel execution. Unlike traditional chains that need to keep the entire transaction history, MonadDB focuses on the current state.

Its strength lies in supporting concurrent reads and writes, resolving conflicts, and enabling optimistic execution. Transactions can access temporary state data and run smoothly in parallel. Conflicts are resolved afterward by comparing input data with previous outputs.

Why Has the Crypto Community Taken Notice of Monad?

The reasons are clear:

Faster, Cheaper Transactions: Parallel execution allows Monad to handle many more transactions. Confirmations are quicker, user experience improves. As capacity increases, fees decrease—creating a more suitable environment for DeFi, NFTs, and gaming.

Leveraging the Ethereum Ecosystem: New non-EVM chains often have to build developer ecosystems from scratch. Monad benefits from Ethereum’s vast developer base, tools, and libraries. Solidity developers can switch to Monad immediately.

Balancing Decentralization and Speed: Solana achieves high speed but raises concerns about decentralization. Monad, by verifying all transactions on a single mainnet and remaining connected to Ethereum’s influence, offers a more robust security model.

Comparing Monad with Existing Players

Ethereum

Ethereum remains the leader in smart contracts. The Dencun upgrade started optimizing block space. But layer-one scalability is still limited. Ethereum relies on L2 solutions (Arbitrum, Optimism), which add complexity for users. Monad offers fast processing directly on layer one.

Solana

Solana achieves impressive speeds with Proof of History (PoH) combined with Proof of Stake (PoS). It’s establishing a strong position in DeFi. But PoH depends on a centralized timestamp oracle, raising decentralization concerns. Monad, based on mainnet security, offers a more resilient structure.

Sui V2 and Aptos

Both Sui V2 and Aptos work with the Move programming language and their own virtual machines. They support parallel processing but lack EVM compatibility. This creates a barrier for Ethereum developers. Monad maintains full compatibility with the Ethereum ecosystem, gaining this advantage.

Monad’s Unique Position

Monad focuses on layer-one scalability, EVM compatibility, and decentralized security—all at once. While other solutions often compromise one aspect for another, Monad’s design aims to balance all three.

In simple terms: Monad dares to reach 10,000 transactions per second without losing EVM compatibility or relying on layer-two solutions.

Challenges Ahead for Monad

Despite all these innovations, real challenges remain:

Technical Complexity: Parallel execution, data consistency, conflict resolution—all are much more complex than traditional sequential models. Debugging and troubleshooting are harder.

Decentralization Concerns: Some aspects of Monad’s design—like the proprietary MonadDB and the EVM implementation—may raise questions about decentralization. Maintaining this balance long-term is critical.

Venture Capital Influence: Major investors like Paradigm and GSR Ventures could influence the platform’s direction. Token distribution and governance might be affected, raising concerns.

Adoption Risks: Being still in testnet phase, competing with established platforms like Ethereum is tough. Building trust, attracting real DApps, and growing a developer community take time.

Interacting with Monad: Testnet and Social Credit

Monad is still actively developing. While direct usage is limited, there are ways to participate:

Monad Testnet: Offers early testing opportunities. You can learn about the technology, test DApps, and contribute to development. Participating now could be valuable for future airdrops.

Social Credit System: Monad rewards community participation. Activities like Discord XP, roles, POAP NFTs, and inclusion in the NAD list on X (Twitter) are tracked. Engaging in chats, creating content, attending events—all earn points.

Potential Airdrop: No confirmed airdrop yet, but the project monitors community contributions. Early participation might lead to token distribution later.

Join the Monad Discord server and learn all the details about the social credit system to start participating.

Key Milestones Ahead for Monad

Important upcoming milestones include:

Mainnet Launch: Planned for Q4 2024, this is a critical milestone. Transitioning from testnet to a fully functional mainnet will demonstrate the project’s readiness for real-world scale.

Ecosystem Growth: Adoption among developers and expansion of user base are vital for long-term success. Real applications in DeFi, NFT marketplaces, and gaming are needed.

Real-World Use Cases: Monad’s success depends on supporting impactful, scalable DApps. If speed and efficiency deliver results, new types of applications will emerge.

Final Words: Can Monad Deliver?

The crypto universe is constantly evolving; new solutions emerge every day. But Monad, with its parallel processing technology, appears to be a groundbreaking project addressing layer-one bottlenecks.

Its goal to balance EVM compatibility, speed, and decentralization makes it particularly intriguing. Challenges—technical complexity, decentralization questions, adoption risks—are real. Yet, Monad’s vision and technical foundation make it a project worth watching in the blockchain space.

If you’re interested in Polkadot’s parachain model solving layer-one issues or the upcoming Cardano with decentralized PoS, check out our reference articles. If the future of blockchain scalability excites you, keep a close eye on Monad.