Monad Ecosystem Guide Series (Exploring Native Projects in the Monad Ecosystem)

Monad Ecosystem Guide: A Preview of Native DEX and Perpetuals

Monad is a high-performance Layer 1 blockchain that’s EVM-compatible, featuring high throughput and low latency. It tackles traditional staking challenges, such as restricted liquidity and low capital efficiency, by fostering innovative liquid staking solutions that deliver a more efficient staking experience for users.

Native liquid staking projects in the Monad ecosystem—Magma, Kintsu, and aPriori—capitalize on Monad’s unique infrastructure to provide cutting-edge features and seamless integration. These protocols aim to boost liquidity, enhance staking efficiency, and create a more user-friendly experience for stakeholders.

Magma plans to launch a DAO-driven liquid staking protocol that leverages distributed validator technology (DVT) to strengthen security and decentralization, extending its use cases beyond Ethereum’s existing implementations. Kintsu emphasizes composability, enabling staked assets to seamlessly interact with DeFi applications within the Monad network. aPriori incorporates miner extractable value (MEV) strategies to maximize staking rewards and aims to become a native Jito-like solution within the Monad ecosystem.

This report delves into the technical frameworks, innovative mechanisms, and distinct value propositions of these liquid staking protocols, offering developers and crypto enthusiasts an in-depth analysis to better understand and engage with the Monad ecosystem’s latest developments.

The second part of this report highlights other native decentralized exchange (DEX) projects within Monad, complementing the topics addressed in the previous installment. It’s important to note that these two reports focus only on publicly announced projects. Many other exceptional projects remain under wraps, and we will cover them in greater detail in upcoming articles.

Native Liquid Staking Projects:

Magma

@MagmaStaking is a DAO-governed liquid staking protocol developed by Hydrogen Labs within the Monad ecosystem. It aims to promote fair token distribution through airdrops and maximize Monad network performance. Additionally, it introduces distributed validator technology (DVT) beyond Ethereum.

Key Highlights:

• gMONAD Liquid Staking: Magma allows Monad token holders to stake their tokens and receive gMONAD, a liquid staking token representing the staked assets. This enables users to earn staking rewards while maintaining liquidity, allowing them to participate in other DeFi activities within the Monad ecosystem.
• Distributed Validator Technology (DVT): As the first DVT outside Ethereum, Magma enhances the network’s security and decentralization. By distributing validator responsibilities across multiple participants, this design reduces the risk of single points of failure and fosters a more robust staking infrastructure within the Monad network.
• Delegation to Top Validators: Magma delegates staked MONAD tokens to the best-performing validators in the network to optimize staking rewards and network security. This strategy aligns incentives and leverages the expertise of established validators.
• MEV Rewards: Monad validators participate in Magma auctions to bid for block space, generating MEV rewards. These rewards are shared with stakers, improving their annual percentage yield (APY).
• Fair Token Distribution via Points Program: Magma adopts a points program to ensure fair token distribution. Participants accumulate Magma points to become part of the decentralized liquid staking DAO within the Monad community. This approach rewards contributors, encourages ecosystem participation, and promotes balanced governance rights.

In October 2024, Magma announced completing a $3.9 million seed funding round, backed by investors including Bloccelerate, Animoca Ventures, CMS Holdings, and more. The round also saw participation from angel investors such as Meltem Demirors and Mike Silagadze. The funding will support the development of Magma’s liquid staking platform and MEV architecture to enhance the Monad network’s functionality and efficiency. Additionally, Magma plans to collaborate with Ether.fi to explore restaking integrations on Monad, further driving ecosystem expansion.

Magma’s Liquid Layer Theory aims to expand Monad’s economic security through liquid staking pools. These mechanisms not only strengthen the network’s security but also propagate it to interconnected layers. Through these innovations, Magma aims to provide a comprehensive and user-centric liquid staking solution, encouraging community participation and enhancing the Monad ecosystem’s security and development.

Kintsu

@Kintsu_xyz is a next-generation liquid staking protocol built on the Monad blockchain, aiming to enhance liquidity, accessibility, and user participation within the proof-of-stake (PoS) ecosystem.

Key Highlights:

• sMONAD and Capital Efficiency: Users staking their MONAD tokens with Kintsu receive sMONAD as a return. This liquid staking token (LST) not only represents staked assets but also accrues staking rewards over time. Unlike traditional staking, sMONAD retains liquidity, allowing users to participate in various DeFi activities while earning staking rewards.
• Enhanced Liquidity and Composability: Kintsu’s LSTs integrate seamlessly with DeFi protocols, gaming platforms, and other dApps in the Monad ecosystem. This composability maximizes the use of staked assets, fostering a more dynamic and interconnected DeFi environment.
• Borrowing Platforms: sMONAD can serve as collateral in lending protocols, improving capital efficiency and providing users with additional earning opportunities.
• Decentralized Stablecoins: sMONAD serves as an ideal collateral asset for decentralized stablecoins on Monad, contributing to the stability and growth of the DeFi ecosystem.
• Centralized Limit Order Book (CLOB) DEXs: Kintsu’s LSTs enhance liquidity and trading efficiency for CLOB DEXs, promoting better price discovery and reducing trading slippage.
• Decentralized Validator Registry: Kintsu has established a decentralized validator registry to distribute staking more evenly across diverse network participants, improving both the security and decentralization of the Monad network.
• Seamless Automated Market Makers (AMMs) Integration: Kintsu’s sMONAD tokens are compatible with AMMs on the Monad network, enhancing liquidity pools, minimizing slippage, and boosting trading efficiency. This integration benefits liquidity providers by offering higher returns and creates a more effective market environment for traders. Kintsu’s innovative design not only introduces a fresh approach to participating in PoS on the Monad blockchain but also revitalizes the broader DeFi ecosystem through its efficient liquidity management and decentralized framework.

In July 2024, Kintsu successfully completed a $4 million seed funding round led by Castle Island Ventures. Other participants included Brevan Howard Digital, CMT Digital, Spartan Group, Breed VC, CMS Holdings, and Animoca Ventures. The funding round also attracted several prominent angel investors, including Alex Matthews and Ross Trachtman from Brevan Howard Digital, Marin Tvrdic from Lido, and Robinson Burkey from the Wormhole Foundation.

Kintsu directly addresses the limitations of traditional staking, such as restricted liquidity and limited DeFi participation opportunities. Its solution allows users to stake their assets while maintaining both flexibility and the potential to earn rewards. By integrating deeply with the Monad ecosystem, Kintsu enhances the network’s overall functionality and drives the growth of its DeFi sector.

a Priori

@apr_labs is a native liquid staking protocol within the Monad ecosystem, exploring the integration of MEV optimization with liquid staking solutions. This approach aims to enhance network performance, potentially lower gas fees, and provide sustainable incentives for validators.

Key Highlights:

• MEV-Based Liquid Staking: aPriori combines liquid staking with MEV optimization to generate higher returns for validators and stakers. By capturing MEV more efficiently, aPriori seeks to improve overall yields while contributing to Monad’s economic stability.
• Efficient MEV Market: aPriori is committed to creating an MEV market that reduces network congestion and spam transactions. Through optimized transaction ordering, the project aims to improve user experience while fostering a more transparent and efficient MEV extraction process, bringing potential benefits to the entire ecosystem.
• High-Performance Architecture: Leveraging Monad’s high throughput and parallel EVM environment, aPriori delivers scalability and performance through its innovative architecture to meet growing user demands.
• Integration with DeFi Applications: aPriori’s liquid staking tokens (LSTs) are designed to promote interoperability with other DeFi applications within the Monad ecosystem. This approach not only improves liquidity, but also provides users with more opportunities to leverage their pledged assets.

In July 2024, aPriori secured $8 million in a seed funding round led by Pantera Capital, bringing its total funding to $10 million. This round followed an earlier pre-seed funding co-led by Hashed and Arrington Capital. The newly raised funds will be directed towards team growth, enhancing security, and fostering community participation.

The seed funding round attracted support from prominent institutions such as ABCDE Capital, Chorus One, CMS Holdings, Consensys, Everstake Capital, Flow Traders, Laser Digital (Nomura), Manifold Trading, OKX Ventures, Selini Capital, Staking Facilities, and Vessel Capital. Notable angel investors, including Adam Jin, Alex Esin, Hongbo Tang, Karthik Raju, Marc Tillement, Mike Silagadze, Nom, Paul Kim, Rex, Robinson Burkey, Spencer Noon, Tim Wang, TN Lee, and Zano Sherwani, also contributed.

aPriori focuses on leveraging Monad’s parallel execution framework to enhance staking protocols while optimizing MEV and staking returns. By tackling inefficiencies in traditional Proof-of-Stake (PoS) systems, aPriori aims to become a significant contributor to the Monad ecosystem. Its architecture, designed to align with Monad’s high-performance environment, delivers tangible benefits for stakers, validators, and the broader Monad DeFi community.

More Monad Ecosystem Native DEX Projects:

Perpl

@perpltrade is a fully on-chain DEX in the Monad ecosystem that leverages Monad’s parallel EVM technology to improve trading speed and efficiency. It focuses on providing deep liquidity, fast execution, and secure, decentralized operations to tackle the limitations of traditional DEXs.

Key Highlights:

• Deep Liquidity with Competitive Pricing: Perpl’s native pricing engine supports dynamic on-chain markets, offering traders optimal pricing. This encourages the growth of on-chain assets and community-focused distributions, improving overall market efficiency.
• High Performance and Scalability: Leveraging Monad’s parallel EVM architecture, Perpl utilizes the blockchain’s high throughput and low latency capabilities to achieve fast trade execution and settlement. This infrastructure supports a scalable trading environment capable of handling large transaction volumes efficiently.
• Enhanced User Experience (UX): Perpl prioritizes user experience by combining speed, efficiency, and an intuitive interface, aiming to meet the needs of both novice and experienced traders, simplifying navigation and trade execution processes.
• Composability and Transparency: Perpl’s open architecture is designed to facilitate seamless integration with other DeFi protocols, promoting composability within the ecosystem. This openness enhances transparency and provides developers opportunities to build innovative financial products on Perpl’s foundation.

Perpl adheres to a “no shortcuts” philosophy, prioritizing decentralization, security, and user-centric design. By integrating with Monad’s parallel EVM, Perpl aims to address challenges associated with centralized sequencers and multi-signature-controlled protocols, striving to create a trustless and highly resilient trading environment.

Perpl seeks to advance the Monad DEX ecosystem by offering a fully on-chain solution focused on deep liquidity, fast execution, and an intuitive user experience. Built on Monad’s blockchain infrastructure, Perpl positions itself as a new benchmark for decentralized trading platforms, providing an efficient and reliable alternative to traditional exchanges.

Mace

@mace_ag is the first DEX aggregator in the Monad ecosystem, aiming to transform DeFi by improving trade efficiency, liquidity accessibility, and user experience.

Key Highlights:

• Comprehensive Liquidity Aggregation: Mace aims to aggregate liquidity from multiple sources within the Monad ecosystem, providing users with efficient trade execution and reduced slippage solutions. By scanning various liquidity pools, Mace strives to identify the best trading paths and automatically distribute orders across multiple pools, enhancing price efficiency.
• Cost Optimization Through Off-Chain Computation: Mace utilizes a Rust-based backend system to perform computationally intensive tasks off-chain, aiming to reduce on-chain gas fees. This approach ensures faster trades and accurate computations by processing transaction calculations off-chain and executing only the optimized paths on-chain.
• Integration with CEX Liquidity: Mace employs a Request for Quote (RFQ) system to introduce off-chain liquidity from centralized exchange market makers. This feature is specifically designed for high-value trades involving large assets, enhancing capital efficiency and providing tighter spreads.
• Execution via Monad’s Parallel EVM: By leveraging Monad’s parallel EVM architecture, Mace aims to process multiple trades simultaneously, enabling rapid execution and minimizing delays. This parallel processing ensures exceptional performance even during network congestion.

Mace fosters an active community through its Points Program, which rewards user engagement on the platform. The protocol emphasizes security with a smart contract system to execute optimized trade paths efficiently. Additionally, Mace plans to introduce a governance token to encourage community participation and create potential long-term value for token holders.

Built on Monad’s technological infrastructure, Mace aims to be a key contributor to the Monad DeFi ecosystem, committed to providing a streamlined, efficient, and cost-conscious trading experience.

Monadex

@Monadex_labs is a decentralized exchange (DEX) built on the Monad blockchain, offering a platform for token swaps, liquidity provision, and participation in token issuance events. By incorporating gamified features and user-friendly functionality, Monadex aims to make DEX platforms more engaging and accessible to both seasoned traders and newcomers to blockchain.

Key Highlights:

• Customizable AMM Capabilities: Monadex’s automated market maker (AMM) design allows for adjustable fee tiers tailored to specific pool characteristics. Liquidity providers (LPs) can supply liquidity using a single token, simplifying the process and lowering the entry barrier. Monadex also supports multi-asset swaps, letting users exchange one asset for multiple others or vice versa, enhancing trading flexibility.
• Gamified Lottery System: A lottery system is integrated into Monadex’s AMM, enabling users to earn lottery tickets through token swaps and participate in weekly prize draws. This feature adds fun and interactivity to the trading experience.
• Community Governance and Development: Monadex emphasizes community involvement by allowing users to shape the platform’s future through governance mechanisms, ensuring alignment with user values and Monad’s cultural ethos.

Monadex aspires to become a key liquidity hub within the Monad ecosystem by offering accessible tools to help new users and developers integrate into the ecosystem more easily. Through gamified features, flexible liquidity options, and active community engagement, Monadex aims to create a more interactive and user-friendly decentralized exchange experience.

TAYA

@TayaFinance is an EVM-compatible AMM DEX that supports both concentrated liquidity market makers (CLMM) and traditional AMM models. By integrating a liquidity aggregator, TayaSwap aims to provide deeper liquidity for DeFi assets, improving trading efficiency and user experience.

Key Highlights:

• Prediction Markets and Voting Features: TAYA introduces a design based on the pm-AMM model, specifically for prediction markets and associated voting mechanisms. This model ensures seamless and fair prediction activities on the platform.
• Customizable DeFi Solutions: TAYA’s architecture supports user-defined financial products for various scenarios, such as memecoins, influencers (KOLs), and trading bots.
• DApp as a Service (DaaS): TAYA offers a platform that enables users to create customized exchanges without programming skills. This feature helps users easily build tailored exchanges, integrate with other platforms, and manage assets more efficiently.

TAYA leverages Monad’s high-performance blockchain infrastructure to provide a scalable and user-friendly DeFi platform. By focusing on customizable solutions and innovative features, TAYA aims to establish itself as a key player in the evolving Monad DeFi ecosystem.

Octoswap

@OctoSwapDex is a DEX built on the Monad ecosystem, dedicated to offering a secure, efficient, and user-friendly platform for token swaps and liquidity provision. Its mission is to make DeFi easier to use and more enjoyable while emphasizing community-driven development and gamified features.

Key Highlights:

• Instant Token Swaps: Octoswap allows users to seamlessly exchange tokens with just a few clicks. The platform’s streamlined process ensures fast, secure, and straightforward transactions, offering precise pricing and low transaction costs.
• Liquidity Mining: Users can contribute tokens to Octoswap’s liquidity pools, earning rewards generated from platform trading fees. This feature incentivizes liquidity providers and enhances overall platform liquidity and user participation.
• Gamified DeFi Experience: Octoswap introduces unique gamified features to make DeFi more engaging and interactive. While specific details are yet to be disclosed, the platform emphasizes community participation and plans to integrate elements that reward user interaction and loyalty.

Built on Monad’s high-performance infrastructure, Octoswap utilizes the blockchain’s speed and security to deliver a robust DeFi platform. Its user-centric design and commitment to community-driven development position Octoswap as a significant participant in the evolving DeFi ecosystem.

Conclusion

Monad’s native staking ecosystem is making significant strides with projects like Magma, Kintsu, and aPriori, which explore innovative liquid staking solutions tailored to Monad’s high-performance capabilities. These projects aim to enhance user experience, optimize capital efficiency, and introduce novel staking mechanisms, contributing to DeFi growth and network security within the Monad ecosystem.

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