1.Abstract

Monad, as a highly anticipated next-generation Layer 1 blockchain, aims to address the scalability bottlenecks commonly faced by current blockchains through its innovative parallel EVM (Ethereum Virtual Machine) architecture. Since its testnet launch on February 19, 2025, Monad has demonstrated its strong performance potential and cultivated a testnet ecosystem with impressive engagement — but whether this momentum can sustain post-mainnet remains to be seen. CoinEx Research will provide an in-depth analysis of Monad's technical foundations, current ecological development, unique operational strategies, and explore the opportunities and cautious considerations it faces before and after its mainnet launch.

2.Technical Foundation: Parallel EVM and MonadBFT Breaking Performance Bottlenecks

The key to Monad's performance enhancement is its innovative improvement of the EVM—by introducing parallel execution capabilities, Monad allows transactions to be processed simultaneously without conflicts, theoretically significantly increasing transaction throughput (TPS) and overcoming the limitations of traditional EVM sequential execution.

In practice, Monad's high performance has also been verified. Since the launch of its testnet on February 19, 2025, it has run stably, preliminarily validating its claimed high TPS characteristics. As shown in the figure below, early test data from Monad indicates its immense performance potential, meeting the market's expectations for high-performance blockchain infrastructure.

Monad's innovative consensus mechanism, MonadBFT, is also a key point in achieving high performance. The MonadBFT research paper released on April 2, 2025, proposed a consensus mechanism specifically designed for high throughput. This mechanism is said to support up to 10,000 transactions per second (10k tx/s) and achieve sub-second transaction finality, which is highly attractive for applications requiring rapid response, such as DeFi and gaming.

Additionally, Monad's design mechanism for low-cost node participation helps build a more resilient and censorship-resistant network. It claims that the cost of running a single node can be as low as $1,000, which is crucial for decentralization and broad participation in the network. Monad's technical narrative directly addresses the key pain points faced by the Ethereum ecosystem, and if its parallel processing capabilities can be stably realized on the mainnet, it is expected to become a strong contender for the next-generation high-performance public chain.

3.Ecosystem Evaluation: Comprehensive Layout and Early Prosperity

Despite still being in the testnet phase, Monad's ecosystem has already shown impressive breadth and vitality, reminiscent of the momentum seen in the Solana ecosystem, specifically in the following aspects:

On-chain Data Surge: The testnet has attracted over 120 million wallet addresses, with daily transactions peaking at over 30 million. NFT-related transactions are also very active, reflecting high market attention and community enthusiasm. This early network effect is promising, but how much of it reflects genuine user demand versus speculative behavior remains uncertain.
Ecosystem Diversity: The ecosystem covers key areas such as decentralized finance (DeFi), artificial intelligence (AI) applications, NFTs, on-chain gaming (GameFi), prediction markets, and liquid staking tokens (LST). The project layout shows Monad's focus on sectors that can attract significant capital flow and users, such as asset issuance, trading, and betting/prediction applications.
Top Projects Onboard: Prominent projects like the well-known NFT marketplace Magic Eden and leading DEX Uniswap have deployed or integrated into the Monad testnet. Notably, Magic Eden already supports NFT trading and minting during the testnet phase, greatly enhancing the credibility and appeal of the Monad ecosystem and providing practical application scenarios for early users.
Top-tier Capital Backing: Monad successfully secured $225 million in funding led by Paradigm, with a valuation reaching $3 billion. Other participating investors include top industry VCs like Coinbase Ventures. Strong financial support and endorsements from top institutions not only ensure long-term project development but also significantly boost developers' and users' confidence in the ecosystem's future.

Overall, Monad's early ecosystem presents a comprehensive, active, and strongly supported positive outlook.

4.Ecosystem Operation Strategy: Community-Driven and Long-Termism

Monad's ecosystem operation exhibits some distinctive features, focusing more on long-term value building rather than short-term metrics.

De-emphasizing TVL Metrics: Unlike many emerging public chains (especially some BTC L2/Fi projects) that rush to achieve high Total Value Locked (TVL), Monad does not seem to prioritize TVL as a key promotional focus. This reflects a long-term development strategy that emphasizes intrinsic ecosystem growth, technological implementation, and genuine user engagement, aiming to avoid reliance on the false prosperity brought by short-term liquidity mining and the backlash from liquidity miners expecting high returns.
Diversified Community Interaction: Monad actively organizes various online and offline activities, including traditional hackathons, tech sharing, keynote speeches, and exhibitions, as well as community culture-specific events like NFT weeks and app experience reviews. This strategy empowers developers deeply while strengthening connections with regular users, fostering an active community atmosphere.
Utilization of Testnet Incentive Mechanisms: Monad cleverly uses Testnet Tokens to incentivize community participation and network testing. Observations suggest that the team may control token issuance pace to create a sense of scarcity, even sparking demand for off-market trades of test tokens (partly driven by bulk operations from airdrop hunters). This strategy effectively boosts interaction data while potentially leading to "reverse yield farming" (project teams benefiting from the behavior of users expecting airdrops). It's noteworthy that interaction metrics within the testnet may have been influenced by "volume brushing" and speculative activities — factors that could challenge authentic user retention on mainnet.
Cultural Building: Monad skillfully uses NFT and meme elements for community communication and cultural shaping, aiming to form a unique sense of community identity and cohesion.
Potential External Resource Integration: Monad's operational style and resource linkage feature common traffic growth strategies seen in Paradigm projects. The market speculates that the Monad team might attract or integrate some infrastructure builders or project resources from the Solana ecosystem through channels like Jump Crypto.

Monad's operational strategy reflects a strong emphasis on community power, combined with cutting-edge growth methods and potential top-tier resource collaboration.

5.Challenges and Cautious Observation: Transitioning from Testnet Popularity to Mainnet Value

Monad's progress so far is impressive, but turning early testnet hype into long-term mainnet value presents several critical inflection points:

Authenticity of User and Project Quality: The unprecedented testnet popularity (e.g., over 120 million wallet addresses) poses the primary challenge of how many can convert into stable, active mainnet users and projects with long-term value. It's important to recognize that some projects and interaction data during the testnet phase may be significantly influenced by airdrop expectations and short-term incentives. Behind the large volume of interactions, the genuinely active user base needs more cautious evaluation (e.g., real users might be less than a million).
Sustainability and Fairness of Incentive Mechanisms: Designing the economic model and incentive mechanisms for the mainnet to continuously attract developers and users while effectively filtering out speculative behavior and preventing airdrop hunters from impacting the ecosystem will be crucial. Observed suspected "volume brushing" behaviors during the testnet phase (including on-chain interactions and social media promotions) indicate the need for stronger anti-cheat and value recognition mechanisms after the mainnet launch.
Full Delivery of Technical Promises: The actual performance, stability, and security of MonadBFT and parallel EVM in a large-scale, high-load mainnet environment will directly determine whether its core narrative can truly land. The transition from theory to practice often comes with unknown technical challenges.

Monad needs to carefully plan its mainnet launch strategy to ensure that the momentum accumulated during the testnet can effectively convert into sustainable ecosystem value, prudently manage community expectations and speculative behaviors, and guide the ecosystem towards a healthy, long-term development path.

6.Conclusion and Outlook

With its innovative parallel EVM technology, strong capital backing, and an actively built early ecosystem, Monad is undoubtedly one of the most noteworthy Layer 1 projects currently. Its high-performance narrative addresses industry pain points, and its operational strategy demonstrates an emphasis on community and long-term value.

The future key lies in whether Monad can successfully tackle the transition challenges from testnet to mainnet, converting immense market expectations and testnet popularity into real, sustainable network activity and ecosystem prosperity. If Monad can effectively manage user expectations, continuously deliver on technical promises, and guide healthy ecosystem development, it has the potential to occupy a significant position in the high-performance public chain field, potentially having a profound impact on the existing landscape. CoinEx Research will continue to monitor its mainnet launch performance and subsequent ecosystem development.

From Hype to Reality: Can Monad’s Testnet Success Translate into Mainnet Value?