Monad Labs has completed a $225 million funding round, positioning itself as a new competitor on the cryptocurrency scene, with plans to rival Ethereum and Solana. Keone Hon, founder of Monad, shared that Monad's innovation lies in rebuilding Ethereum's blockchain from the ground up, maintaining the ability to execute smart contracts while transacting at higher speeds, higher volumes and lower cost.
The company plans to launch its mainnet by the end of the year and to set up its testnet in the coming months. Monad Labs plans to introduce a native token, offering the possibility of airdrop. The easiest way to benefit from this is simply to use the protocol. This allows users to get a real feel for the product.
Since the launch of Bitcoin in 2009, developers have introduced new blockchains promising cheaper and faster transactions, and applications such as decentralised exchanges or lending protocols. Ethereum, launched in 2015 with the innovation of smart contracts, has struggled to scale with growing demand. Hon, having worked at Jump Trading, saw the need for a more capable Ethereum Virtual Machine (EVM), a vision shared by co-founder James Hunsaker.
"Currently, the efficiencies of DeFi are enough to justify competing with the traditional financial system. Especially when compared with the power of traditional banks and financial investments worth billions."
After raising $19 million in a funding round in 2023, Monad completes a $225 million funding round, the largest in the cryptocurrency sector in 2024 so far, according to Crunchbase's Web3 Tracker. The funding signals a thaw in the sector's bear market. Paradigm, the specialist cryptocurrency venture capital fund leading this round, plans to raise a further $750 million-plus. The round also marks one of the first forays into cryptocurrency projects by Greenoaks Capital, led by veteran investor Neil Mehta, following a small bet on FTX.
Although Jump has incubated several cryptocurrency projects, including Wormhole and Pyth Network, Hon says Monad operates completely independently of the trading firm. Jump found itself at the centre of a scandal linked to the collapse of stablecoin project Terraform Labs led by Do Kwon. With its new round of funding, Hon says Monad plans to roll out its mainnet by the end of the year, as well as a testnet in the coming months. Monad Labs currently has around 30 employees and is considering a native token, although Hon declined to comment on its launch with the mainnet.
As cryptocurrency companies continue to aim for mainstream adoption, Hon says Monad's first use case is likely to be for the kind of high-frequency trading he used to do at Jump. He points out that the world's largest stock and futures exchanges handle between 500 million and 1 billion trades a day. Hon also points to other possible applications for a blockchain with high transaction capacity and low costs, such as gaming. A blockchain-based game would need to update player stats for each action, with each update representing a new transaction that needs to be economically viable on a blockchain.
Despite the VCs' big bets on Monad, Avichal Garg, successful serial entrepreneur and managing partner of Electric Capital, says that his investment does not rule out the success of other blockchains, but in different possibilities. He sees these ecosystems as non-exclusive, illustrating that the coexistence of several platforms is possible and desirable in the digital world.
Read our analysis of Monad on Summit Research.
