The Rise of Monad Labs: Bridging the Gap Between DeFi and Traditional Finance
In 2020, Keone Hon embarked on a journey that would change the face of cryptocurrency trading forever. As a leader in high-frequency trading at Jump Trading, Hon had already made a name for himself in the financial world. However, it was the COVID-19 crash that prompted him to venture into crypto. His investing deepened in 2021 when he joined Jump Crypto, where he led blockchain research and Solana DeFi development.
Combining Institutional Expertise with Blockchain Development
Hon’s experience at Jump Trading and Jump Crypto gave him a unique perspective on the world of finance. He witnessed firsthand the efficiency and scalability of traditional finance’s trading infrastructure. At the same time, he was exposed to the cutting-edge technology of blockchain development. This combination of institutional expertise and high-performance blockchain development led Hon to spot a significant market gap – the need for trading infrastructure that could match traditional finance’s efficiency while remaining within Ethereum’s developer ecosystem.
The Birth of Monad Labs
In early 2022, during the crypto winter, Hon left Jump Trading to co-found Monad Labs. This decision marked a turning point in his career, as he aimed to bring together the best of both worlds: the efficiency and scalability of traditional finance and the innovation and flexibility of blockchain technology. The vision for Monad Labs was clear – to create trading infrastructure that could execute 10,000 transactions per second (TPS) at just $0.001 per transaction.
A Record-Breaking Fundraising Effort
The vision attracted significant attention from investors, with Monad Labs securing an impressive $225 million in funding in 2024. This fundraising effort was one of the largest crypto raises of the year, a testament to the potential of Hon’s project. The funding will be used to drive the development of Monad’s technical specifications, which promise to revolutionize the world of DeFi.
Technical Specifications: A Game-Changer for DeFi
Monad’s technical specs are impressive, to say the least. While Ethereum processes 15 TPS with $10 to $50 fees, and Solana handles 2,600 TPS with sub-cent fees, Monad is aiming to execute 10,000 TPS at just $0.001 per transaction. This level of efficiency and cost-effectiveness has the potential to transform DeFi, enabling it to compete with traditional finance on a global scale.
The Importance of Ethereum
So why did Hon choose to build on Ethereum? The answer lies in the platform’s widespread adoption and developer community. "We chose to build on Ethereum because almost all developers are building for the EVM," Hon explained in an interview with CoinDesk. By making the Ethereum Virtual Machine (EVM) more performant, Monad is giving developers the best of both worlds – the efficiency and scalability of traditional finance and the innovation and flexibility of blockchain technology.
Addressing a Critical Limitation of DeFi
One of the critical limitations of DeFi is its high transaction costs. In traditional finance, the typical costs of execution are single-digit basis points. However, in DeFi, people are accustomed to paying 30, 50, or even 1% of their transactions. This is a significant barrier to adoption, as it makes DeFi less competitive with traditional finance.
A Shift Toward Institutional-Grade Infrastructure
As we approach the new year, Monad’s focus on institutional-grade infrastructure and fully on-chain order books suggests a shift from crypto’s speculative era toward rebuilding traditional finance’s core systems. With mainnet launch planned for early 2025, the crypto world will be watching to see if Hon’s Wall Street-meets-Web3 experiment can help bridge the gap between DeFi and traditional finance.
The Future of Trading
Hon’s vision for Monad Labs is nothing short of revolutionary. "A fully on-chain order book can do what traditional finance does, but with a fraction of the cost and greater transparency," he said in an interview. This level of efficiency and cost-effectiveness has the potential to transform the world of trading forever.
Conclusion
The rise of Monad Labs marks a significant turning point in the development of DeFi. With its focus on institutional-grade infrastructure and fully on-chain order books, Hon’s project is poised to bridge the gap between DeFi and traditional finance. As we approach the new year, it will be exciting to see how Monad Labs continues to innovate and disrupt the world of trading.
About the Author
Keone Hon is a renowned expert in high-frequency trading and blockchain development. He co-founded Monad Labs with a vision to create trading infrastructure that can match traditional finance’s efficiency while remaining within Ethereum’s developer ecosystem.
