Another exhausting week in crypto, starting with the LIBRA rug-pull and ending with the largest hack in history at Bybit. But enough ink has been spilt on these developments already, plus I'm short on time to write this, so I'll get straight into things.
I originally planned on looking at Abstract Chain this week, the relatively new L2 launched by the Pudgy Penguin team. But then Abstract wallets started getting drained and I thought it would be better to give them some time to sort things out before I put any funds there.
Fortunately, Monad launched their testnet this week, so I can play with that instead. Normally I don't pay much attention to testnets and prefer to wait for the real thing to launch, but this is a particularly hyped project so I'm interested to see what's going on.
But what exactly is Monad, and why have people been so excited by it? I'll dig in down below.
I enjoyed this episode of Hidden Forces. It isn't strictly a crypto podcast, but it certainly touches on crypto and how it relates to financial nihilism.
And this episode of Infinite Jungle featuring Jon Charbonneau is also worth a listen.
Monad is a new L1 chain designed to improve on Ethereum's speed and scalability.
Like Ethereum, Monad is built around the Ethereum Virtual Machine (EVM) -- the computer at the heart of the chain where calculations take place and transactions are executed. That means any existing Ethereum apps can be deployed without changes on Monad.
But that's pretty much where the similarities with Ethereum end.
Beyond the EVM, Monad has been designed from the ground up to extract as much performance as possible from the hardware running the chain.
Its headline feature is parallel execution, where multiple transactions are processed simultaneously.
Traditionally, blockchains like Ethereum handle each transaction individually, one at a time. It doesn't matter if the transactions are completely different and independent, Ethereum waits for the first transaction to complete before moving on to the second. Monad would tackle both transactions at once -- so there is less of a bottleneck for transaction throughput.
Monad isn't the first chain to do this. Solana is well known for parallel execution -- it's part of what makes that chain so performant. But few EVM chains do it today, so it could be a fairly big differentiator from the competition.
It's worth noting that this approach introduces some complexity.
For instance, what happens if multiple transactions are trying to do the same thing, like buy tokens from the same pool? They can't all go through at the same time, as each buy will affect the pool and push the token's price higher, changing the environment in which the other transactions take place.
Solana gets around this by forcing transactions to specify what they will be doing, so it knows which transactions can safely be run at the same time and which need to be run sequentially. Monad takes a different approach. It uses 'optimistic parallel execution', where it assumes transactions can run at the same time and re-execute them if things don't work out.
Parallel execution isn't Monad's only innovation, however.
Another big feature is MonadDB, a customised database specifically designed to make EVM-style interactions extremely fast and efficient.
As far as I know, Monad is the first chain to build a database specifically for the EVM. Every other chain relies on existing databases that are better suited for other purposes. That means other chains aren't making the most of their hardware, putting a cap on their performance.
Finally, Monad will use 'asynchronous execution', which involves separating transaction execution from consensus. Essentially, this means nodes will first agree on the order of transactions and then compute the results of them. That means more time can be dedicated to executing transactions compared to traditional chains like Ethereum -- where block proposers must execute transactions before publishing their block, and validators must execute transactions before attesting to the block.
These design features, among others, should help Monad achieve around 10,000 TPS from the off, with the potential to handle hundreds of thousands of transactions per second in the future.
At the same time, their strong focus on efficiency and maximising the potential of the underlying hardware means node requirements will be relatively low -- at least compared to a traditionally designed blockchain achieving similar throughput. In this way, Monad minimises the typical fears of 'centralisation' in high-performance chains.
Of course, Monad is entering a market that is already saturated. We already have numerous L1s with established network effects and communities from previous generations, like Ethereum, Solana, and Avalanche. Then there are new and emerging chains and L2s like Base, MegaETH, Eclipse, Berachain, Aptos, Sui, and many more that are all competing for mindshare and developers.
Standing out from and competing against this crowd will be difficult, but Monad has already done well. Its active Discord and hoard of supporters on X show how effective it has been in establishing itself even ahead of its launch. It's not unlike Berachain in this way. But, as BERA's price action since launch has shown, pre-launch hype and community building don't necessarily translate into instant success.
I'm certainly intrigued to see how Monad will perform as we approach the launch of its mainnet -- can it sustain its support base once the presumed token incentives have been paid out?
It's an interesting project built with a rather different philosophy from many other chains, so I'm interested to see how it will perform in practice. Playing on the testnet will only show us so much -- we need to wait for the real thing to be sure -- but we should get a sense of how Monad's innovative design pans out in reality.
You'll need to go to https://testnet.monad.xyz/.
Some wallets will already have Monad Testnet setup as an available network, so if you're using Phantom, Uniswap Wallet, Backpack, or OKX Wallet you won't need to do anything. However, if you're using MetaMask or Rabby, you'll need to manually add the network before you can interact with it. Don't worry if you haven't done it before, it's easy to do and the site will guide you through it.
Then you'll need to claim MON from the faucet. Currently, this isn't working due to high demand. But, if you have an active account on Ethereum, you may have already been given a small quantity of MON to get you started.
After this, you'll be free to test the network as you see like.
The site has a few suggestions of where to get started, and you can check out the full ecosystem at https://www.monad.xyz/ecosystem.
Some of the things to do are:
As mentioned earlier, there's only so much that can be learned from a Testnet -- they're unlikely to experience anything like the demand that could hit the real thing, plus they're probably being tweaked and developed all the time.
Having said that, Monad's certainly enjoyable to use in its current form -- and that bodes well for the future. Transactions are confirmed rapidly (it feels like some of the fastest I've experienced, but there's probably not a lot in it compared to other high-speed chains), and I had few issues or failed transactions.
Fees are difficult to judge given that testnet MON has no monetary value, but it was a small fraction of a MON each time which is presumably going to be cheap.
The big drawback right now is that some of the testnet apps aren't working properly, so I couldn't test them myself. I suspect they are struggling with more users than expected for such an early-stage project. I'm sure if I check back in a week or so when the hype has subsided, then everything will be working as normal.
Of course, Monad isn't guaranteed success even if it can offer a good experience, fast transactions, and low fees once mainnet is live. While it's nice to use, it's not dramatically better than many other high throughput chains -- at least as a user. So, it'll be interesting to see if they really can differentiate themselves from the pack or translate their pre-launch community.