Monad: A Next-Generation Layer-1 Blockchain Solution

Monad is a layer-1 scaling solution that promises extreme scalability, near-instant transactions, and full EVM compatibility — features that provide practical solutions to persistent blockchain bottlenecks. This quick guide discusses how Monad works, its use cases, key benefits, and the challenges facing the network.

In this Guide:

• What is Monad?
• How Monad works
• MonadBFT consensus
• Monad use cases
• Monad vs. alternatives
• Possible risks
• Is Monad the next big thing?
• Frequently asked questions

What is Monad?

Monad is a powerful, EVM-compatible layer-1 (L1) blockchain that can achieve a throughput of up to 10,000 TPS with a block time of one second. It was first launched in 2022 by Monad Labs, led by co-founders Keone Hon (CEO), James Hunsaker (CTO), and Eunice Giarta (COO). The testnet officially went live on Feb. 19, 2025.

Monad addresses the core scalability limitations common to EVM-compatible blockchains. Ethereum, for instance, handles only around 15–30 transactions per second (TPS). This limitation can — and does — cause significant delays and congestion during peak usage.

Monad resolves such bottlenecks by enabling dramatically higher throughput and significantly reducing congestion during periods of increased demand. Its parallel architecture supports substantially higher performance without compromising compatibility.

How Monad works

Monad significantly enhances Ethereum Virtual Machine (EVM) performance without sacrificing compatibility. It does this by implementing advanced technological mechanisms designed for higher efficiency and scalability.

More specifically, it introduces four core optimizations: parallel execution, deferred execution, MonadBFT consensus, and MonadDb.

Parallel execution

Traditional EVM-compatible blockchains, like Ethereum, Avalanche, and BNB Chain, process transactions sequentially. Monad, in contrast, executes transactions in parallel, paving the way for greater throughput.

Here’s how it works: blockchains first verify transaction dependencies before allowing parallel execution. Monad, however, utilizes optimistic execution, presuming that transactions are independent. It executes them simultaneously.

If two interdependent transactions conflict during parallel execution, Monad dynamically identifies the issue. The system then rolls back the conflicting transactions and re-executes them sequentially without compromising overall throughput.

Deferred execution

Monad separates transaction execution from the consensus process. Traditional blockchains require transactions to fully execute before nodes can reach consensus on transaction ordering, slowing down overall processing.

In contrast, Monad nodes first achieve consensus on transaction order before executing the transactions themselves. This “deferred execution” means nodes agree on a block’s transaction order independently from executing those transactions. As a result, transaction execution no longer delays the consensus process.

This design increases network throughput and overall efficiency.

MonadBFT consensus

Monad employs MonadBFT, a highly optimized consensus mechanism derived from the HotStuff Byzantine Fault Tolerance (BFT) protocol. MonadBFT streamlines consensus by reducing HotStuff’s three-phase confirmation process down to just two phases, significantly expediting block finalization.

MonadBFT operates by having the leader node propose a block and prove the validity of the preceding block. Validators then send direct confirmations to the next leader node to approve the block. This approach speeds up consensus compared to more traditional methods.

MonadDb

MonadDb is Monad’s custom-built state storage database, designed specifically to support parallel transaction execution and optimized state storage. Traditional Ethereum-compatible blockchains typically embed various data structures into Ethereum’s Merkle Patricia Trie. This archaic approach can create inefficiencies due to incompatible or suboptimal integrations.

Since Monad executes transactions parallelly, its database must efficiently handle simultaneous reads and writes. MonadDb solves this by implementing a “custom” Patricia Trie structure optimized for parallelism.

This structure delivers quick transaction processing with reduced latency, focusing primarily on current state data instead of historical data.

This efficient data structure allows MonadDb to achieve superior performance, significantly outperforming Ethereum’s standard implementation during high-throughput scenarios.

Monad use cases

With its superior throughput and higher scalability, Monad shows great potential in several domains, including but not limited to:

DeFi applications

Monad’s ability to support simultaneous processing of thousands of transactions allows decentralized exchanges to handle real-time order books similar to centralized exchanges.

With MonadBFT’s rapid one-second finality, timely price updates make on-chain high-frequency trading practical. Complex operations like flash loans or multi-step arbitrage can execute atomically and efficiently.

Gaming and NFTs

Complex gaming ecosystems, which include trading items and transferring assets, benefit from Monad’s minimal latency and extremely low fees.

NFT marketplaces can efficiently manage bulk minting or simultaneous transactions, which makes the network suitable for high-volume, low-cost NFT use cases.

Enterprise and IoT

Monad’s parallel processing makes it ideal for enterprise and IoT applications demanding high-frequency, simultaneous data handling. Enterprises in IoT or industrial applications can verify and log multiple data streams concurrently for accurate, timely state confirmations.

Similarly, industrial monitoring platforms, supply chain tracking, and sensor data verification are much more practical with Monad’s low-latency, parallel execution capabilities.

Monad vs. alternatives

Possible risks

Despite the benefits, Monad’s innovations do increase technical complexity, potentially raising development and maintenance costs, particularly for smaller teams.

Moreover, advanced mechanisms like parallel execution might introduce unforeseen vulnerabilities.

The token distribution model allows a small number of stakeholders to exert significant influence over critical protocol decisions, which could undermine decentralization and the network’s long-term security.

Is Monad the next big thing?

While it’s still early to say definitively, Monad’s technical innovations position it as a strong contender among next-generation blockchain solutions. If its ambitious goals of scalability, EVM compatibility, and user-friendly development are fully realized, Monad could significantly reshape blockchain adoption. For now, it is a promising platform worth watching closely.