Bitcoin, Ethereum, Solana, and Monad: the tech is evolving. Each subsequent chain stands on the shoulders of giants. The pendulum may swing to extremes between the opposing poles of decentralisation (the ethos upon which this industry was founded) and scalability (the aspiring future of global adoption).
Monad is a performant EVM blockchain that doesn’t compromise decentralisation. A complete redesign from scratch, it achieves the verifiability of Ethereum with the performance of traditional web2 systems, allowing anyone to afford transacting on it and running a node to verify it. The public testnet launched a week ago with 57 geographically distributed validators and over 20 apps live on day one. The upcoming mainnet launch will introduce real economic incentives and determine whether this momentum translates into sustained adoption.
I personally believe that Monad will be a top L1, sitting at the intersection of Ethereum’s decentralisation and its EVM lindy effect, with performance exceeding Solana’s current capabilities. As Monad stress-tests its chain during this testnet phase, I want to highlight a key player in its MEV layer because they play an extremely important role. We know MEV has a massive impact on UX, staking yield, and decentralisation. So, the MEV / LST project on a blockchain is critically important for the entire ecosystem. “For Monad to be as successful as we believe it can be, the LST / MEV layer has to create significant wealth for the entire ecosystem. It has to raise up all of Monad and give its economy escape velocity.” It’s an extremely important role, and FastLane is best positioned to deliver that for Monad.
MEV is value that can be extracted from transaction ordering within a block, often at the expense of users. From both a technological and relationship standpoint, FastLane is the clear leader on Monad, addressing key challenges such as value leakage in blockchain transactions and ensuring that the value generated by users and protocols is captured and utilised effectively within their ecosystems.
One of Monad’s key innovations is asynchronous execution. For background, most blockchains have interleaved execution in blocks. Blocks include both execution and consensus. Consensus is expensive, and therefore execution time is constrained. Example: Ethereum (12s block time, 100ms execution budget). With Monad, optimised asynchronous execution unlocks more time for execution, hence more transactions per block.
Source: How Monad Works
Simply put, asynchronous execution works by having nodes come to consensus on transaction ordering prior to execution. Consensus works on block 2 while execution of block 1 occurs in parallel. This dynamic changes the MEV landscape. The MEV infrastructure on Monad is likely to be different and more opinionated on latency and UX than MEV infrastructure on other chains. This may fundamentally affect other infrastructure projects that may find themselves unable to compete with direct validator-integrated offerings.
Because consensus and execution are decoupled, validators may be working with state based on an earlier block, which makes it impossible for them to simulate against the latest block. Access to the latest state is necessary for searchers to identify arbitrage opportunities and liquidation events. Otherwise, searchers face the risk of transaction reverts before the latest state is confirmed. FastLane uses “Onchain MEV” to verify MEV payments in real time through smart contracts. This makes it the only protocol currently in production that is compatible with the delayed simulations caused by Monad’s asynchronous execution.
https://x.com/ThogardPvP/status/1894840628862951848
One of the reasons FastLane is so excited about Monad is the massive block space and high TPS. With FastLane + validators handling MEV to mitigate spam, apps will have enough room for ASS (application specific sequencing) to be an onchain smart contract. The neat thing about smart contracts is that they are trustless, permissionless, and immutable.
FastLane has 2 smart contract solutions: one for validators and one for apps (Atlas). These two are like enemies, but there are a handful of things that they can work on together. UX, for instance, is very important to apps. A lot of people don’t realise that the MEV layer of an L1 protocol is a critically important part for all apps on the protocol. So FastLane is creating a natural dialectic and equilibrium here between the two.
FastLane has been working with validators, infrastructure providers, bundlers (that users don’t know exist), wallets, and apps. Their work is great for users: not getting front-run, not getting sandwich-attacked, not having 10% slippage on trades. But the only thing they’re doing on Monad is next level, taking all these services to interact with end users more directly and running it all through shMonad; they call it a “holistic liquid staking protocol”. We’ll cover this more below, but essentially some of the validators’ and apps’ revenue gets passed through to the holders of LST to boost yield. Soon users will be able to directly interact with FastLane and start getting extra yield and revenue as a bonus on top of UX improvements.
https://x.com/christiadarma/status/1848265366201565343
It’s important to note that I think the debate about whether MEV should go to L1s, L2s, or apps is somewhat missing the point. MEV should go to the user it came from. And I think in the winning system, to the extent possible, it will. Monad and FastLane are hoping to deliver that. Ethereum isn’t the right environment, Solana’s SVM can’t do it; Monad is the best place for it.
We know that MEV can boost the yield of LSTs (see Jito on Solana). But more than just that, FastLane’s suite of products emerged from their beliefs in ASS: that apps will internalise more MEV over time and that they will prioritise UX, which is key for user retention. These three things are what make me personally bullish on FastLane’s positioning within the Monad ecosystem.
A portion of the validator MEV is added to the LST to boost the yield for depositors. FastLane automatically converts MEV into LST. This makes TVL increase with both net deposits and MEV.