The competition to create the quickest and most scalable layer 1 blockchain has a new competitor. Leading the massive $225 million fundraising round for Monad Labs was the well-known cryptocurrency VC company Paradigm. The money will go toward creating and releasing Monad, a layer 1 compatible with the EVM that promises to execute up to 10,000 transactions per second.
Monad Labs is excited to announce a $225M fundraise, led by @paradigm pic.twitter.com/cRchQd506k
— Monad ⨀ (@monad_xyz) April 9, 2024
If Monad can deliver on its promised throughput, it would make it exponentially faster than Ethereum’s current rate of around 15 TPS. It would also surpass speeds achieved by other highly scalable layer 1s like Solana, which tops out at around 3,000 TPS. This has led some to dub Monad as a potential “Solana killer.”
The Paradigm-led raise is one of the largest ever for a new layer 1 blockchain project. Other high-profile investors that participated include Electric Capital, Castle Island Ventures, Coinbase Ventures, Green Oaks, and Animoca Brands.
Emerging From Two Years of R&D
Monad has been in stealth development for around two years under the guidance of founder Keone Hon. Previously a quantitative developer at Jump Crypto, Hon told Fortune that the Monad team chose to go “really deep on the pure execution side” at a time when most blockchain projects were focused on layer 2 scaling solutions.
According to Hon, there was a “huge need” for a highly performant EVM, but no teams were prioritising solving this challenge through Layer 1 innovation. Monad’s parallel execution architecture and optimistic concurrency control are key to enabling its incredible claimed throughput of 10,000 real TPS.
Monad Devnet is live.10,000 real TPS achieved on the EVM. pic.twitter.com/1bnfsi6bqU
— Monad ⨀ (@monad_xyz) March 14, 2024
Paradigm’s Ongoing Crypto Bullishness
The massive Monad raise continues a spell of crypto exuberance from Paradigm. Earlier this month, the firm led a $21 million Series A for Bitcoin layer 2 Mezo. Paradigm is also reportedly raising up to $850 million for a new crypto fund, which would be the largest raised since May 2022, when Andreessen Horowitz completed a record $4.5 billion fund.
Despite being an early investor in the collapsed FTX exchange, to which it had allocated $278 million, which was ultimately lost, Paradigm has doubled down on its crypto convictions in 2023 and 2024. Its active investment portfolio reads like a who’s who of top web3 projects, including Coinbase, Optimism, Uniswap, and others.
Crypto VC Stages a Comeback
The Monad mega-round caps off a promising start to 2024 for crypto venture capital activity. After plunging to lows of just $445 million invested in October 2023, VC inflows have rebounded sharply, topping $1.16 billion in March, according to data from Crypto Koryo.
Long-term Trend Both total investments and number of investments have increased compared to last quarter.Compared to last quarter, there was a 38% increase in amount invested and 49% increase in the number of projects invested. pic.twitter.com/QhIcsOB0qw
— Crypto Koryo (@CryptoKoryo) April 4, 2024
According to Biztech, so far in 2024, DeFi and blockchain infrastructure projects have attracted the lion’s share of over $1.5 billion in cumulative investment. In contrast, non-fungible token (NFT) projects saw just $281 million invested in 2023, a 92% drop from 2022’s totals amid plunging prices for major NFT collections like CryptoPunks and Bored Ape Yacht Club.
Can Monad Deliver on Its Grand Ambitions?
With a gargantuan funding war chest now behind it, all eyes will be on Monad to see if it can make good on its lofty scalability claims. The project is targeting a mainnet launch by the end of 2024.
If successful, Monad could become an attractive destination for decentralised apps seeking hyper-scalability without sacrificing EVM compatibility or security. It would instantly reshape the landscape of smart contract platforms alongside established players like Ethereum and Polygon.
However, Monad will also have to fend off competition from a flurry of other execution layer upstarts and prove that its parallelised execution model can continue delivering high throughput safely at scale. The race to become the world’s fastest EVM chain is only beginning.
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