Monad: The Most Anticipated Parallel Blockchain in 2024

Ethereum is the most popular and user-friendly blockchain for creating dApps. Its ecosystem hosts hundreds of projects, with 56% of all crypto market assets concentrated in this network. Certainly, Ethereum is the most suitable platform for promoting cryptocurrencies.

However, despite Ethereum's prominence, it and its associated blockchains suffer from low transaction speeds: Ethereum at 13 TPS, Arbitrum at 12 TPS, and Optimism at 6 TPS.

Top 10 Ethereum Ecosystem Blockchains by TPS. Source: l2beat.com

One solution to this problem is the parallel processing of transactions. Such architecture has already been implemented by projects like:

• Solana;
• Aptos;
• Sei.

However, two of them lack Ethereum support, and Sei only announced the launch of its Devnet to test EVM compatibility in February this year. 

Monad stands out as the first parallel blockchain specifically designed for Ethereum. Early in 2023, Monad attracted $19 million in funding and is currently negotiating a $200 million funding round. The initiative is led by Keone Hon, a seasoned blockchain developer with an 8-year tenure at Jump Trading.

On March 14, 2024, Monad debuted its Devnet, promising speeds of up to 10,000 transactions per second. Let’s explore the workings of the Monad blockchain and the burgeoning projects within its ecosystem.

MonadBFT

MonadBFT serves as the consensus mechanism for Monad, ensuring transaction order integrity. This mechanism embodies Byzantine Fault Tolerance (BFT), allowing the decentralized system to function accurately even amid component failures or malicious actions.

For a clearer understanding of MonadBFT's advantages, it's helpful to contrast it with Cosmos' Tendermint consensus protocol. Tendermint's block finalization demands three distinct phases: 

• Proposal;
• Pre-vote;
• Pre-commit. 

This entails a leader proposing a block and disseminating it among validators for two rounds of voting. A consensus among validators is needed for the block to be officially recorded on the blockchain. This methodology introduces extra time requirements, as nodes must finalize the current block before moving on to the next.

Conversely, MonadBFT adopts a two-phase process utilizing a fan-out-fan-in pattern, enabling parallel function execution. Block finalization within Monad can be delineated into:

• Commit Phase 1: The leader proposes block k and circulates it to validators. Each validator forwards their vote to the leader of the subsequent block, k+1. This leader compiles these votes into a Quorum Certificate (QC), evidencing the consensus of at least two-thirds of the validators.
• Commit Phase 2: The next block's leader, k+1, distributes the new block alongside the QC to validators, who then commit block k.

This process leverages a pipeline structure, blending the creation efforts for blocks k and k+1. Such a strategy diminishes the time needed to produce a single block by reducing the steps needed for communication.

Visualizing MonadBFT's Workflow. Source: mirror.xyz

To comprehend the concept of pipelining, imagine the task of washing several sets of clothes:

• Sequential Method: A person completes the cycle of washing, drying, folding, and storing one set of clothes before starting on the next. 
• Pipelined Method: As soon as the first set is in the dryer, the next set is placed in the washing machine, with the cycle repeated for each set thereafter.

Applying this to MonadBFT, the pipelining ensures that while one block is undergoing the pre-vote stage, another can simultaneously advance to the pre-commit or commit stages.

Deferred Execution

In Ethereum and most other blockchains, transactions must be executed before the network can reach consensus. Monad adopts a different approach known as deferred execution, where Monad validators agree on the network state before executing transactions.

Simplifying the concept, deferred execution in Monad can be likened to the operations of a student cafeteria.

In most cafeterias, students first choose their food (transaction execution) and then line up to pay (consensus). If resources for preparing the food run out or if preparation takes too much time, the whole process can stall.

Monad’s “cafeteria” operates differently:

• Consensus: Before getting their food, students line up and tell the cashier what dish they will order. The cashier records the order of dishes, similar to how Monad records the order of transactions.
• Execution: After placing their orders, students proceed to the pickup counter. While one student is receiving their food, the cashier is already taking the next student's order.

This way, even if preparing a dish takes longer, the queue at the cashier continues to move. All students know what they will receive, and their order is already queued.

However, what happens if one of the nodes turns malicious (e.g., sets the network state randomly)? 

To address this issue, Monad utilizes a delay in confirming the Merkle root (the blockchain's final state value), delayed by D-blocks — a system parameter currently set at 10. This means the state of block N-D is only valid when the network reaches a consensus on block N.

A node with an execution error in block N-D will cease to participate in consensus starting from block N. This rolls back the blockchain state to block N-D-1, followed by re-executing transactions in blocks N-D, N-D+1, N-D+2, etc.

Parallel Execution

The challenge of parallel transaction execution lies in identifying dependencies between operations. Monad employs an optimistic execution method, where validators process transactions even before the processing of previous ones concludes.

This approach is sound when transactions are unrelated. However, scenarios can arise where the outcome might be incorrect, for example:

• Transaction 1 reads and updates account A’s balance (e.g., receiving a transfer from account B);
• Transaction 2 also reads and updates account A’s balance (e.g., transferring funds to account C).

With parallel execution, the processing of transaction 2 begins before transaction 1 is completed. Consequently, in sequential execution, the balance value used for account A could differ.

In the optimistic approach, the input data of transaction 2 is compared with the output data of transaction 1. If they differ, transaction 2 is re-executed with the correct data.

For a more detailed explanation of parallel execution in other blockchains, refer to this article.

MonadDB

Parallel execution in isolation doesn't enhance blockchain performance; what's needed is a database system capable of parallel read and write operations to the disk. 

Traditional blockchain data storage libraries, such as LevelDB or LMDB, lack support for executing transactions in parallel. This necessity led to the creation of Monad's proprietary database: MonadDB. Despite expanding blockchain capabilities, MonadDB maintains comparable read costs to the aforementioned LevelDB.

The Monad Ecosystem

The project team behind Monad boasts a transaction processing capability of 10,000 TPS (transactions per second), making it a prime candidate for trading protocols, particularly decentralized exchanges. Beyond this, the blockchain finds applicability in GameFi, NFTs, oracles, and more.

The Monad Ecosystem. Source: twitter.com

Elixir: This feature enables users to supply liquidity to various pools that serve as market makers on decentralized exchanges. Notably, Elixir is part of the operations of platforms like Bluefin, RabbitX, and Vertex as of March 2024.

The Pipeline: Monad's dedicated media outlet, The Pipeline, highlights project updates and activities. It conducts interviews with the Monad team and projects within its ecosystem, publishes educational articles, and fosters community engagement.

Supporting DeFi Protocols: 

• Wormhole: A multichain protocol facilitating asset exchanges across different blockchains, including Ethereum, Solana, and Avalanche, among others. 
• LayerZero: A protocol for cross-chain transfers, whose token is among the most anticipated assets for the years 2023-2024.
• iZUMi Finance: A multichain DeFi protocol with a daily trading volume of $13.6 million. 

The Monad ecosystem is continually expanding. Events like the Wormhole airdrop, which rewarded Monad community members with approximately 8,000 W (~$12,000) for their engagement on Discord, have positively impacted the project's visibility.

Final Thoughts

Monad is intriguing not just from a technological standpoint but also for its retroactive potential. A project of such magnitude could feasibly replicate the success seen by projects like Sei and Sui, in terms of token price growth, and Wormhole, in terms of airdrop success.

Sei and Sui Token Growth. Source: tradingview.com

As of March 2024, Monad has yet to launch publicly, so the primary form of engagement with the project is through social activity. Users can:

• Join the Discord server. Study Monad's documentation and operational features to help newcomers along the way. Active contributors may be rewarded by the team.
• Follow Monad on X (formerly Twitter). While X activity might not be directly tied to airdrop criteria, following Monad ensures you're informed about important project news. 
• Contribute content to the Monad community. Creating memes, animations, articles, etc., is likely the most effective way to make your mark and secure a role on Discord.

A public testnet for Monad is anticipated around May-June 2024, with a mainnet launch expected in December. We will keep you updated on new developments and opportunities for potential airdrops.

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