Paradigm leads $225M round for high-throughput blockchain Monad

Monad Labs, the developer behind a forthcoming layer-1 blockchain focused on high throughput and Ethereum compatibility, announced a hefty $225 million funding round led by Paradigm on Tuesday.

Despite being far less active than in 2021, the crypto venture sector continues to show renewed vitality. Monad’s raise is the largest crypto venture round since Wormhole’s $225 million haul in November of last year. Electric Capital, Coinbase Capital and several other firms participated.

The announcement comes as Solana, which also hopes to offer Ethereum-like features with better throughput, struggles to process the raft of transactions enabled by its low fees. Up to 77% of transactions were dropped instead of included in Solana blocks at times last week.

When asked about Solana’s dropped transaction debacle, Monad co-founder and CEO Keone Hon gave a lengthy technical explanation.

“Sorry this is a very long answer,” Hon parenthesized before diving into how RPC nodes handle spam. The co-founder of crypto’s latest mega-round recipient spent roughly a decade as a traditional finance quant before more recently working at Jump Crypto.

At Monad, Hon and co. have generated excitement around an Ethereum Virtual Machine with parallel execution. The EVM is the software that powers Ethereum, a blockchain that can be slow and expensive. Parallel execution executes transactions simultaneously, rather than one at a time. Monad’s parallel EVM can theoretically run much quicker than Ethereum, hitting 10,000 transactions per second in its current “devnet” phase. Ethereum currently handles around 15 TPS, according to Etherscan.

The idea of a parallel EVM has won some mindshare in crypto. Haseeb Qureshi, managing partner of Monad backer Dragonfly, said its Monad bet felt like “investing in more than just a team, but an idea,” on X.

Dragonfly led Monad Labs’ $19 million seed round in February 2023.

Hon said the Monad community is “almost like a Schelling point for really switched on people that care a lot about crypto.”

Some Monad critics say it could suffer from state bloat, or inefficiency caused by processing huge amounts of transactions, when released into the wild. Solana also makes use of parallel processing, and it hasn’t wholly escaped the difficulty of scaling.

Hon told Blockworks that the chain is spending time load testing and running edge case scenarios before Monad hits mainnet, a launch slated for later this year, according to Fortune.

Monad’s CEO told Blockworks his blockchain will avoid Solana’s current transaction dropping woes because it lacks a scheduler — the piece of Solana that decides how transactions should be ordered in a block. Solana’s scheduler can hit conflicts and have trouble with transactions, Hon said. By contrast, Monad’s transactions are all linear and “there’s no way for transactions to affect other transactions’ actual scheduling.”

Due to its scalability, Hon said Monad could be useful for creating consumer crypto apps.

A popular app with a million daily active users executing around 50 transactions per day would require a blockchain to process 500 TPS, Hon estimated.

“That one app would be half the throughput of Solana and would be 50x the throughput of Ethereum,” Hon said.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.