Exploring Monad's Early DeFi Ecosystem
Slowly but surely, we are inching closer toward one of the most anticipated launches of this cycle — Monad.
The parallelized, EVM-compatible L1, which boasts $225M in funding from Coinbase, Electric Capital, and Paradigm, has been in testnet since March. The chain has already reached 10,000 transactions per second, an achievement that's led to hype around the chain's potential to supercharge DeFi.
With the chain continuing to grow mindshare, more teams are building on it, providing us with an early sense of how Monad’s DeFi landscape will take shape. Let's dig into a few of the hyped, early projects 👇
🍬 TayaSwap
TayaSwap is a DeFi Hub for Monad, which aims to bring established features like Concentrated Liquidity Pools and Dynamic Liquidity Pools to the ecosystem and make trading customizable with its Dapp as a Service (DaaS) platform.
Concentrated Liquidity Pools lets liquidity providers focus assets in specific price ranges, boosting capital efficiency, further enhanced by Monad’s high throughput and low transaction costs. On the other hand, Dynamic Liquidity Pools automatically adjust positions based on market conditions, reducing the need for manual management and keeping liquidity optimized during price fluctuations.
Together, these lay a bedrock for Monad’s DeFi ecosystem, which Tayaswap looks to expand on through its DaaS platform — a no-code terminal for designing custom dapps. Anyone can create and deploy dapps with custom liquidity pools, trading pairs, and fee structures.
🪨 Kintsu
Kintsu is a liquid staking protocol set to launch on Monad. The team aims to ensure that liquid staking is prioritized early on in Monad’s history.
The team argues that liquid staking not only boosts the network's security by incentivizing staking participation but also serves as a critical catalyst for the growth of DeFi on Monad. New L1s like Monad may face a cold start problem, where liquidity is initially scarce, and natively staked gas tokens are locked and thus can't contribute to an early, vibrant DeFi ecosystem.
Kintsu enhances Monad's security and liquidity by integrating liquid staking from the get-go, an effort the team believes is setting the network up for success.
🍀 Kuru
Kuru is a Monad DEX that leverages a Central Limit Order Book (CLOB) instead of the widely used Automated Market Makers (AMMs) to provide tighter spreads.
This model is closer to traditional market systems on centralized exchanges and allows market makers to offer better prices to users. Kuru aims to replace AMMs entirely, supporting a variety of assets and simplifying the process of providing liquidity, ensuring that even less experienced market makers can participate effectively without active position management, unlike AMMs.
Beyond championing the CLOB, Kuru aims to streamline the user experience by integrating discovery, research, and trading into a single interface.
⚙️ aPriori
aPriori is another upcoming liquid staking protocol for Monad that increases staking rewards with MEV — the additional profits miners or validators can earn by determining the order of transactions in a block.
aPriori introduces a specialized MEV infrastructure explicitly designed for Monad. It optimizes how Monad handles transactions, allowing the protocol to make informed guesses about the best way to organize transactions and generate additional value that aPriori can use to increase staking rewards. aPriori uses these profits to enhance staking yields.
By aiming to increase staking participation through higher yields, aPriori may further strengthen Monad’s overall security. Higher staking rates contribute to a more robust network consensus, ensuring the long-term resilience and security of the network.
➡️ More on the Way
With Kuru, TayaSwap, Kintsu, and aPriori helping lead the way, Monad is showing early signs it is already attracting a diverse array of projects to its budding DeFi ecosystem.
These early movers highlight the potential of Monad’s speed and transaction cost to offer highly efficient DeFi products, from Kuru’s CLOB-based DEX to TayaSwap’s advanced liquidity pools and DApp creation tools, and from Kintsu’s liquid staking to aPriori’s MEV optimization.
As anticipation builds for Monad’s mainnet, many other EVM-based protocols, like Curvance and Nostra, are also preparing to deploy on the chain, suggesting that this new L1 could have some promising early protocols aboard at launch to bring in new users.