Tech startup Monad Labs, founded by the former team from TradFi giant Jump Trading, raised $19 million in seed funding to develop a new blockchain that aims to improve on issues faced by current Layer 1 protocols.

The Monad blockchain will launch on a testnet in the coming months with the mainnet deployment planned for later this year, according to a statement. The blockchain will employ the proof-of-stake consensus mechanism and will be Ethereum Virtual Machine (EVM) compatible. As such, projects on Monad will be able to interact with the EVM software platform, where developers from many other blockchain projects also create interoperable decentralized applications on the Ethereum network.

"The Monad blockchain will set the industry standards for the speed, transparency, security and scalability that all Layer 1 protocols should have," said Keone Hon, co-founder and CEO of Monad Lab, in the statement.

The funding round for Monad was led by crypto venture capital firm Dragonfly Capital with the participation of 70 other investors, including Placeholder Capital, Lemniscap, Shima Capital, Finality Capital, as well as angel investors in the digital asset space such as Naval Ravikant, Cobie, and Hasu, the statement said.

Redesigned blockchain

Over the few years, builders in the space have often been held back by high-cost and low reward on many Layer 1 blockchains. This in turn, affects innovation and mass adoption of the Decentralized Applications (Dapps) by the developers.

Monad plans to address these issues through its new Layer 1 protocol, which it claims will be able to process a total of 10,000 transactions per second. To do so, Monad made some key changes to the consensus and execution layers - two major mechanisms of a blockchain.

"We redesigned the EVM execution system from the ground up to allow non-overlapping transactions to be run in parallel," said Eunice Giarta, Co-Founder and COO of Monad Labs. The team also remodeled the integration system between the two mechanisms to allow the blockchain’s execution layer to run in parallel to consensus, she noted.

"Together, these improvements massively improve the system throughput, allowing the system to scale to many more users and applications," Giarta added.

Ethereum, the original smart contract blockchain, still holds the majority of the market share among Layer 1 projects. However, there have been several new blockchains – dubbed “Ethereum Killers” – that are looking to improve Ethereum's processing time, fees and scalability. Some of the more popular Layer 1 blockchains include Cardano (ADA), Solana (SOL), Avalanche (AVAX), Algorand (ALGO) and Internet Computer (ICP).

As more traditional financial entities enter the space, focus is turning increasingly into scalability and speed of blockchains. Monad’s team is seeking to capture this opportunity to build an improved version of Layer 1 blockchain.

“With a founding team that originated from Jump, Monad Labs understands the need for speed,” said Chris Burniske, partner at Placeholder Capital in the statement. “The [Monad] team is in the midst of parallelizing the EVM, creating a blockchain network and EVM-environment that rivals the performance of traditional tech and finance,” he added.

Read more: Where Is the Ethereum Virtual Machine Headed in 2023?