Monad and MEV

Ethereum, following the approval of its Exchange-Traded Funds (ETFs), is on the verge of mass adoption. The ETF's approval marks a pivotal moment for the broader acceptance of blockchain technology. It underscores Ethereum's maturity and readiness for mainstream financial markets, potentially ushering in a new era of innovation and growth. As more investors and developers flock to the Ethereum network, we can anticipate a surge in decentralized applications (dApps) and smart contracts, paving the way for a more decentralized and efficient financial system.

However, Ethereum, as a Layer 1 (L1), has execution bottlenecks and inefficient state access, which hinder its scalability. Monad, as a next-gen upcoming Layer 1 smart contract platform based on the Ethereum Virtual Machine (EVM), enhances EVM performance with asynchronous I/O, optimized Patricia Trie, deferred execution, and Optimistic Concurrency Control.

As MEV is inherent to any blockchain network, a robust Miner Extractable Value Auction Infrastructure (MEVA) infrastructure is critical to both align incentives between different parties and establish a robust block production process. Monad’s unique consensus design (MonadBFT) and short block time unveil a unique set of challenges and also a unique opportunity for MEV infrastructure.

Monad's deferred execution model decouples transaction execution from consensus, unlike Ethereum, which requires both transaction lists and state roots for block agreement. This allows nodes to independently execute transactions while agreeing on the next block's order, utilizing the entire consensus period for execution.

The Operational Time Window for Monad's MEVA is limited due to its 1-second block time, making it difficult for builders to simulate full blocks and optimize them before the next block is produced, leading to indeterminism and challenges in block building. Completing a full block simulation within the operational time window on Monad is impractical, leading to less deterministic block valuation and greater execution uncertainty for searchers.

Enter aPriori

aPriori is developing a high-performance MEV infrastructure tailored for Monad, aiming to address the specific challenges of the MEV landscape on Monad.

Their innovative approach introduces partial-block auctions, allowing builders to construct the top of the block from searcher-submitted bundles while validators append the remaining transactions from the public mempool. This reduces latency and eliminates the need for simulating the entire block proposal.

Additionally, aPriori offers a liquid staking product that maintains liquidity while accruing MEV and staking rewards. This positions aPriori at the center of the upcoming DeFi landscape on Monad and potentially differentiates them from other LST protocols there.

The team, led by experienced industry veterans such as Ray, an alumnus of Flow Traders and Jump Crypto, and Olivia, who built the in-house trade pipeline at Coinbase, has secured a seed round led by Pantera to further their mission. As a crypto-native HFT fund who look to be a strong partner with new ecosystems with reduced block time, we are proud to be part of the backers list and support the emerging Monad's MEV infrastructure.