Investing in Kuru

Blockchain scalability has emerged as a critical challenge in the cryptocurrency ecosystem in recent years. While established platforms like Solana have gained traction among both crypto enthusiasts and newcomers, attracting millions of users, newer chains such as Sui and Aptos are still laying their foundational groundwork. Amidst this landscape, Monad has surfaced as an innovative scaling solution, introducing a unique convergence point: the integration of parallel execution and superscalar pipelining for the EVM.

Monad positions itself as a high-performance blockchain, leveraging optimizations designed to enhance both throughput and scalability. Drawing from the team's background in high-frequency trading (HFT) and the low block times nature of the chain, DeFi is set to be a cornerstone of the Monad ecosystem. One of the most promising early projects in this space is Kuru, who is developing an order book DEX with an on-chain matching engine.

Nowadays, Automated Market Makers (AMMs) facilitate billions in transaction volumes every day, massively contributing to the growing landscape of DEXs (which now account for more than 20% of the volume compared to CEXs). While pivotal to DeFi's origin and growth, the nature of inefficient liquidity and high slippage makes AMMs mostly suitable for long-tail assets.

Uniswap v3-like protocols allow users to concentrate liquidity, leading to much higher capital efficiency. AMM designs are slowly converging towards something that behaves more like a Central Limit Order Book (CLOB), especially when combining with Request-for-Quote (RFQ) or Just-In-Time (JIT) Liquidity.

Compared to AMMs, CLOBs offers users better prices and lower slippage. This is mainly because it relies on active market makers (MMs) who provide order book depth and efficient liquidity quoting, rather than passive LPs. Developing an on-chain CLOB has become a critical objective for many blockchain teams, especially within EVM-compatible chains.

However, this endeavor faces several significant challenges. Firstly, each limit order and balance requires substantial data storage and frequent updates, leading to very high gas costs. Secondly, to provide a user experience comparable to CEXs, on-chain CLOBs must achieve latency in the range of 15-30 milliseconds.

Another major concern is addressing Maximal Extractable Value (MEV) within existing blockchain architectures. Most Layer 2 solutions rely on centralized sequencers, which can potentially reorder transactions to extract value.

Application-specific chains (app-chains) face similar issues. When validators or block producers have permissionless authority, they can position themselves to maximize value extraction at the expense of users.

To address these challenges, Kuru is designed to optimize gas costs and mitigate MEV. The platform allows makers to place and cancel orders with constant gas costs, while taker orders iterate over the filled orders. Kuru's design allows the protocol to significantly reduces data storage gas costs, which is central to an on-chain CLOB.

Furthermore, Kuru aims to involve passive LPs (who are mostly retail investors) by designing solutions that allow users to passively provide liquidity to the order books. Regarding trading experience, Kuru wants to go beyond being just a DEX and become a one-stop shop for everyone to discover and trade their favorite assets.

Monad is still in the development phase and has not yet finalized its approach to MEV mitigation. While early proposals like Apriori for block production have been considered, the project remains in its early stages. Kuru is actively exploring options that can reduce MEV.

At Vamient, with our experience in high-frequency trading (HFT) which aligns well with Monad as a scaling solution, and our advisory roles with Birdeyes and SolanaFM, we are proud to support 0xfravashi, 0xtrojan, and the rest of the team in building Kuru.