Kuru, an innovative on-chain orderbook exchange built on Monad, has emerged from stealth mode with the announcement of securing $2 million in seed funding. This financing round, led by Electric Capital, saw participation from prominent entities such as Brevan Howard Digital, CMS Holdings, Pivot Global, Breed, and Velocity Capital. Notable angel investors, including Keone Hon, Jarry Xiao, and Eugene Chen, also contributed.

Positioned as a pioneer in the on-chain order book space, Kuru claims to be the first fully on-chain decentralized exchange (DEX) on Monad. It offers users an integrated platform to discover, analyze, and trade spot assets directly on-chain. Monad, the highly anticipated Ethereum-compatible Layer 1 blockchain, is currently in its devnet phase, with internal testing revealing impressive performance, including 10,000 transactions per second (TPS) as of March.

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Vaibhav Prakash, co-founder of Kuru, remarked, “While automated market makers (AMMs) like Uniswap have been instrumental in the proliferation of decentralized finance (DeFi), they are hindered by issues such as high slippage and inefficient liquidity utilization. Kuru’s order book, leveraging Monad’s high throughput and rapid block times, aims to deliver enhanced capital efficiency and significantly tighter liquidity.”

Despite the efficiency improvements of current AMMs through liquidity concentration, Prakash argues that the trend is shifting towards order book models. “Our objective is to supplant AMMs entirely by accommodating both liquid and niche assets while simplifying the liquidity provision process. Active liquidity is crucial for an effective order book, yet relying on market makers to manage an influx of new tokens daily is impractical. We are developing mechanisms for users to contribute liquidity passively.”

Prakash also highlighted the disparity between tools needed for on-chain spot trading versus derivatives, noting that existing exchanges often treat these needs as equivalent. “We aim to bridge this gap, enhancing the ease with which users discover and trade their preferred assets. Kuru is designed to facilitate market makers with the ability to place or cancel limit orders at minimal, consistent gas costs, which will result in tighter spreads and enhanced liquidity.”

The newly acquired capital will be used to expand Kuru’s team and prepare for necessary audits before launching on the Monad testnet.

Keone Hon, CEO and co-founder of Monad developer Monad Labs, commented, “The Kuru team is tackling a significant challenge in DeFi. Fully on-chain order books will enable DEXes to close the execution gap with centralized exchanges, providing users with an optimal blend of reduced slippage, self-custody, and composability.”

Understanding Monad

Monad claims to have revolutionized Ethereum’s infrastructure to achieve higher throughput, aiming for up to 10,000 TPS with a one-second block interval. However, this ambition poses challenges for node operators, requiring hardware with approximately double the specifications of the main Ethereum network.

Rather than merely replicating Ethereum’s codebase, Monad is developing a new Ethereum Virtual Machine (EVM) from scratch, utilizing a pipelined architecture. This staggered approach allows for more efficient processing and instant block finality. Monad maintains EVM bytecode compatibility, facilitating seamless migration of existing Ethereum decentralized applications to its platform.

The MON token is designated to cover transaction fees for block inclusion and execution, as outlined in Monad’s technical documentation from September. However, the token’s name was later removed from the documents for unspecified reasons.

Monad Labs, co-founded by former developers from Jump Trading, completed a $225 million funding round in April led by Paradigm, with contributions from Electric Capital, Coinbase Ventures, Castle Island Ventures, GSR Ventures, and Greenoaks. This followed a $19 million funding round led by Dragonfly Capital and a $9 million pre-seed round in May 2022, followed by a $10 million seed round in December 2022.