Jai Sahu
Monad Labs Secures $225 Million Funding Round Led by Paradigm
- Monad Labs secured $225 million in a financing round spearheaded by Paradigm.
- The funds will support the creation of a swifter iteration of the Ethereum blockchain, aligning with current DeFi applications.
The funding will primarily fuel the advancement of Monad Labs’ accelerated Ethereum blockchain. This enhanced version aims to address Ethereum’s scalability issues by significantly increasing transaction throughput while maintaining compatibility with the Ethereum Virtual Machine (EVM). The EVM ensures adherence to Ethereum’s rules for transactions and smart contracts.
Monad Labs highlighted that over 96% of decentralized finance (DeFi) capital is currently processed by the EVM, indicating the critical role it plays in the ecosystem. In contrast to Ethereum’s limited capacity, Monad’s testnet, which launched in March, boasts the capability to handle approximately 10,000 transactions per second (TPS), a vast improvement over Ethereum’s current throughput of fewer than 20 TPS, according to etherscan.io.
The sluggish transaction speed of Ethereum has prompted various initiatives to create faster DeFi environments. These include alternative layer-1 blockchains like Solana and Cardano, as well as layer-2 chains that expedite transaction processing before validating them on Ethereum.
Monad Labs achieved its speed enhancements by rewriting the blockchain code, implementing techniques such as parallel execution to optimize performance across all protocol levels, resulting in improved throughput.
The funding round attracted investment from notable firms such as Electric Capital, Castle Island Ventures, Animoca Ventures, Coinbase Ventures, and CoinFund, signifying widespread confidence in Monad Labs’ vision and technological advancements.