From: thepipeline_xyz
The Genesis of Monad: Bridging High-Frequency Trading with Blockchain
The inspiration for Monad, a new blockchain initiative, stems from a rich background in high-frequency trading (HFT) and a subsequent deep dive into the world of cryptocurrency and blockchain technology [00:00:03]. The founders, James and another individual, first collaborated in 2014 on a high-frequency trading team at Jump Trading [00:00:17].
Insights from High-Frequency Trading
In the HFT environment, the primary objective is to construct a complete trading system from scratch [00:00:25]. This involves ingesting large volumes of data packets from exchanges, making extremely rapid trading decisions, and then dispatching orders back to the exchange [00:00:31]. It is a highly competitive domain where speed is paramount; the party able to decide and send an order faster gains the advantage, whether by taking liquidity for an aggressive order or securing a position in the queue for a passive order [00:00:44]. This intensely latency-competitive environment spurred continuous system improvements, leading to significant reductions in latency and the development of highly performant systems [00:01:01].
Transition to Crypto and Identified Needs
By 2021, the team transitioned to Jump’s crypto division, focusing immediately on DeFi projects [00:01:18]. Specifically, James contributed to Pith, concentrating on Solana DeFi for approximately six months [00:01:31]. Through this experience, a critical need became apparent: a demand for more performant blockchain solutions generally, and a particularly urgent need for a more performant Ethereum Virtual Machine (EVM) [00:01:41].
It was observed that existing EVM implementations were notably inefficient and lacked the level of optimization previously applied to HFT systems [00:01:47]. The team recognized that their background in building highly performant systems from the ground up made them uniquely suited to address these challenges [00:02:00].
The Foundation for Monad
The initial inspiration for Monad is thus a blend of two key experiences [00:02:10]:
- The experience of developing highly performant systems from scratch for different applications, such as high-frequency trading [00:02:12].
- Direct interaction with both Solana and Ethereum, which highlighted performance disparities and significant optimization opportunities within the EVM space [00:02:23].
While Solana had undergone many optimizations, the EVM realm presented a vast landscape for improvements, which became the driving force behind Monad’s inception [00:02:27].