The blockchain trilemma states that out of scalability, security, and decentralization, you can only have two. This has given rise to new competing layer-1 chains for different purposes. Let’s look at new layer-1 protocols that are gearing up for launch, each of which promises unique features, improved performance, and a fresh contribution to the nascent blockchain space.

Monad and Berachain’s are coming soon, and Hyperliquid started recently – let’s investigate what they mean for the future of blockchain technology.

Berachain: Layer-1 Chain with Proof of Liquidity

Key features:

• Unique Proof-of-Liquidity Consensus
• Compatibility with the Ethereum Virtual Machine (EVM)
• Modular design
• Tri-token system

What is Berachain?

Berachain is an Ethereum Virtual Machine (EVM) compatible chain, making it a powerful tool for creating applications or easily migrating them from Ethereum. Due to its compatibility with ERC standards, Berachain lets developers utilize Ethereum-based tools and services. For developers, this simplifies the creation and deployment of dApps.

Berachain has a modular design built on the ‘Cosmos SDK’. This is a key factor in its mission to solve the issue of liquidity fragmentation. Liquidity fragmentation has dogged other projects that have tried to exchange assets across different blockchains. Additionally, Berachain uses Proof-of-Liquidity (PoL), a unique consensus model for securing the network and optimizing liquidity. 

Central to Berachain’s architecture is the tri-token system of its economic and governance structure. The three tokens are BERA (for transactions), BGT (a governance token), and HONEY (a US-dollar-pegged stablecoin).

This model incentivizes liquidity provision, and allows for decentralized governance, where BGT holders can participate in decision-making.

In a nutshell, Berachain is positioning itself as a scalable, interoperable, and developer-friendly platform for high liquidity and for cross-chain dApps.

Why is Berachain Getting Hyped Up?

Berachain is quickly gaining attention due to its unique Proof-of-Liquidity (PoL) consensus mechanism. This innovation is what sets it apart from other blockchains.

Its evolution adds to its appeal. It started as Bit Bears, an NFT platform created by three pseudonymous founders, and the platform’s NFT collections became very successful. This resulted in a growing community, whose influence gave Bit Bears the momentum to launch a standalone layer-1 platform. 

The project has also attracted airdrop farmers who are closely following its development to capitalize on potential airdrops. 

Who Invested in Berachain?

Berachain has attracted significant investment from several venture capital firms and individual investors. It has raised over $142 million in several funding rounds. 

It raised $42 million in April 2023 in a private token round led by Polychain Capital with participation from Hack VC, Robot Ventures, and Shima Capital. It later received $100 million in series B funding co-led by Framework Ventures and Brevan Howard Abu Dhabi branch.

Monad: High Throughput, Low Fees

Key Features:

• Parallel execution processes multiple transactions simultaneously
• Deferred execution for improved efficiency
• ‘MonadBFT’ – an advanced consensus algorithm that ensures fast and secure agreement among nodes
• ‘MonadDB’ – a specialized database for faster transactions.

Monad is a new blockchain designed to make dApps faster and more efficient. It employs a parallel execution model that allows multiple transactions to be processed simultaneously, significantly increasing throughput compared to traditional blockchains. Thanks to this parallel execution, Monad is highly scalable, ensuring that the network can grow without slowing down. Monad is co-founded by ex-Jump Capital high frequency trader (HFT) Keone Hon.

This enables Monad to handle up to 10,000 transactions per second (tps) with a block time of one second. With its deferred execution, Monad separates the confirmation of transactions from their execution. This helps reduce the waiting times while improving efficiency. It uses a Proof-of-Stake (PoS) consensus mechanism.

Monad is built for developers with tools and features that make it easy to build and launch apps. The layer-1 network aims to solve traditional blockchain challenges such as slow speeds and high costs, while providing a simple and user-friendly experience. It is highly cost-effective, with transaction fees of less than 1 cent.

Monad Hype

Monad is generating hype due to a high throughput of 10,000 tps and cheap transactions. For perspective, Solana’s true tps ranges between 500 and 1,000.

The crypto community is highly anticipating Monad’s airdrop. Although it is meant to reward early adopters, airdrop hunters use it to earn free money.

Not everyone is convinced. DeFi god Andre Cronje published this scathing tweet recently:

Who are Monad’s Investors?

Monad has raised at least $244 million in various funding rounds. In April 2024, Monad Labs announced a $225 million raise in a round led by Paradigm. Other investors include Coinbase Ventures, Electric Capital, and Greenoaks.

Hyperliquid: Blockchain or DEX?

Key Features:

• High throughput and low slippage
• Cost-efficiency
• HyperBFT consensus mechanism for low latency and high security
  

Hyperliquid is an advanced layer-1 blockchain built specifically to improve decentralized finance (DeFi) applications and to lower slippage. It offers low fees, fast transaction speeds (with block confirmations under one second), and advanced trading features similar to centralized exchanges.

It uses a custom consensus mechanism called HyperBFT. This helps transactions process quickly and securely, while enabling deep liquidity and efficient order matching. 

One of Hyperliquid’s key features is its decentralized perpetual exchange; this is designed to allow users to trade perpetual futures directly on its blockchain without paying gas fees. This reduces costs and boosts transaction speed. 

Hyperliquid generated its hype through innovative features and advanced options that are not available on other DEXs. Thanks to the successful DEX of the same name, Hyperliquid found its way to the spotlight thanks to its successful HYPE token airdrop to 94,000 users, each getting an average allocation worth $45,000.

Who are Hyperliquid’s Investors?

Hyperliquid took a different route, opting to be self-funded to maintain its independence and avoid the influence of external backers. 

The project was founded by two Harvard classmates: Jeff Yan and Illiensinc. The unexpected collapse of FTX in late 2022 gave them an unexpected boost and their future is bright.

Wrapping Up

Monad, Berachain, and Hyperliquid are new introductions to the growing layer-1 network space. They aim to address scalability, security, and decentralization. Monad and Berachain are backed by a war chest of financial backing while Hyperliquid is riding high on self-funding. 

Will they eat the lunch of the established layer-1 blockchain network? Only time will tell.

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