What Is Monad? The Ethereum, Solana Rival Just Raised $225 Million

In 2024’s largest crypto raise so far, Monad Labs, the firm behind the upstart layer-1 network Monad, secured a whopping $225 million in funding on Monday from a round led by crypto venture juggernaut Paradigm. 

The raise, which was also supported by crypto VC Electric Capital and the tech investment firm Greenoaks, constitutes a significant show of faith by crypto mainstays that Monad—which has yet to launch—will become a speedy, affordable, and dependable decentralized finance (DeFi) alternative to both the Ethereum ecosystem and layer-1 networks like Solana.  

Founded in 2022 by Jump Crypto alum Keone Hon, Monad is an Ethereum Virtual Machine (EVM)-compatible network that is seeking to fill what is sees as a gap in the current crypto landscape: A blockchain able to easily interact with the Ethereum ecosystem, that is distinctly more capable of accommodating extremely high traffic while remaining speedy, cheap, and secure. 

There are plenty of blockchains out there that would argue they already fit that criteria, to be sure. Following the landmark Dencun upgrade last month, Ethereum layer-2 scaling networks like Arbitrum, Optimism, and Base have seen transaction costs plummet to near-zero. If any of those networks were to see massive upticks in usage, however, their gas fees would almost certainly spike.

Non-Ethereum layer-1 networks, particularly Solana, have ballooned in popularity in recent months—particularly for DeFi users—due to their speed and lower fees. But Solana has also suffered repeated outages as it attempts to scale to become a linchpin of the crypto ecosystem. 

By offering full capability with EVM—the software that powers Ethereum, and all networks built on top of it—Monad appears to be tapping into the dominant influence Ethereum has over crypto users and developers, while simultaneously attempting to build a more streamlined version of the network from the ground up.

It also looks like a play for attracting top-level developers. According to a January report from Electric Capital, some 90% of crypto developers working on multiple chains work with EVM. 

Other EVM-compatible layer-one networks are already out there, most notably Avalanche and BNB Chain, the latter of which was created by Binance. But Monad Labs’ fundraise today marks the flashiest entry into the crowded blockchain ecosystem in some time—certainly since the crypto crash of 2022.

“We are excited about Monad because it solves one of the critical bottlenecks in scalability for the Ethereum ecosystem: the Ethereum Virtual Machine,” Electric Capital Managing Partner Avichal Garg told Decrypt. “Monad’s parallelized EVM can unlock a 100x improvement in throughput in the EVM ecosystem and make consumer-grade, decentralized applications possible.”

Prior to today’s news, Monad Labs previously raised a $19 million seed funding round in early 2023, led by Dragonfly Capital.

Edited by Andrew Hayward