The project is dedicated to building a full-chain order book + automated market-making hybrid DEX on the high-performance EVM public chain Monad.
Written by: ChandlerZ, Foresight News
The structural bottlenecks of on-chain trading experiences are gradually becoming apparent. Although the AMM model has driven the early development of decentralized exchanges, its limitations in liquidity utilization efficiency, price discovery mechanisms, and support for limit orders have always left a gap between on-chain trading and centralized exchanges. On the other hand, while the CLOB model offers greater flexibility and precision, it has long been constrained by public chain performance and on-chain execution costs, making it difficult to implement effectively.
On July 7, Kuru Labs, a decentralized exchange on Monad Layer 1, announced the completion of a $11.5 million Series A funding round, led by Paradigm, with participation from angel investors including 0xDesigner, Viktor Bunin, Zagabond, Tristan Yver, Kevin Pang, Will Price, Alex Watts, Jordan Hagan, 3nes, Shreyas Hariharan, Auri, and Joe Takayama.
Kuru Labs aims to build a full-chain trading platform that combines order book architecture with automated market-making logic on the high-performance Layer 1 blockchain Monad. The project hopes to provide a more balanced product path for both professional traders and ordinary users through the reconstruction of its underlying architecture.
Project Background
Kuru Labs is a startup focused on building an on-chain order book trading platform, founded in 2024 by a team with experience in high-frequency trading, DeFi protocol development, and on-chain system optimization. The project's goal is to create a decentralized trading platform that is entirely blockchain-based and features both order book and automated market-making functionalities. Kuru's vision is not to take shortcuts from existing architectures but to start from the ground up, combining the advantages of the two mainstream models to replicate a spot trading system that is closer to the experience of centralized exchanges.
In terms of funding, Kuru completed a seed round in mid-2024, raising $2 million, with Electric Capital as the lead investor, and Brevan Howard Digital, CMS Holdings, Pivot Global, Breed, and Velocity Capital also participating, along with angel investors such as Keone Hon, Jarry Xiao, and Eugene Chen. This round of funding is primarily used to establish a technical team, build a minimum viable product (MVP), and prepare for the testing phase.
Kuru's announcement of completing the Series A funding round totals $11.5 million, led by Paradigm. Kuru co-founder Vaibhav Prakash stated that Paradigm has played a positive role in constructing the microstructure of on-chain markets. The team plans to use the Series A funds to further expand the resources needed for team growth and to realize the vision of a fully on-chain order book on the Monad mainnet.
Technical Architecture and Product Design
Kuru has not adopted the AMM model currently used by mainstream decentralized exchanges but is attempting to build a hybrid system that combines order book and automated market-making functionalities. The core idea is to introduce a default automated market-making algorithm into the order book of each trading pair on-chain, allowing users to receive basic quote support even in the absence of active liquidity providers. Compared to traditional order books, this design does not rely on centralized market makers to maintain market liquidity, nor does it impose a unified constraint on price curves like AMMs; instead, it offers the possibility of flexible switching between the two.
In terms of operation, Kuru has designed an order management mechanism suitable for on-chain environments. The submission and cancellation of limit orders incur low and predictable gas costs, allowing market makers or strategy traders to operate frequently without being hindered by high costs. The team is also developing a passive liquidity mechanism that enables ordinary users to support liquidity through strategy contracts without managing orders. This approach aims to lower the participation threshold while enhancing the capital coverage of the on-chain order book.
Technically, Kuru has chosen the Monad blockchain as its deployment platform. Monad is a Layer 1 blockchain compatible with Ethereum EVM, currently still in the testing phase, with the second phase of the testnet's verification nodes launched in June, including 161 verification nodes from 64 cities across 33 countries.
Monad Labs was co-founded by several former Jump Trading developers. In April 2024, the company completed a $225 million funding round, also led by Paradigm, with follow-on investments from Electric Capital, Coinbase Ventures, Castle Island Ventures, GSR Ventures, and Greenoaks. Monad Labs previously raised $9 million in a pre-seed round in May 2022 and $10 million in a seed round in December 2022, followed by raising $19 million under the lead of Dragonfly Capital.
Unlike existing EVM public chains, Monad does not simply replicate Ethereum's code but reconstructs the execution engine from the ground up, employing a parallel architecture and pipelined scheduling mechanism to enhance processing capacity per second and reduce block time delays. Internal testing data shows that Monad can achieve a processing capacity of 10,000 TPS in a controlled environment while maintaining a one-second block time. Kuru relies on this foundational performance to build a fully on-chain, scalable matching system. Since Monad supports EVM bytecode, Kuru can also be compatible with development tools and user-end products in the Ethereum ecosystem, reducing migration costs.
Despite the advanced nature of its technical architecture, Kuru also faces real-world limitations. The Monad mainnet has not yet launched, and its chain-level performance and network stability have not been validated in a public environment. Kuru's product design heavily relies on the real-time and predictability of on-chain transactions; if Monad fails to deliver on time, it will directly impact the platform's launch pace and the feasibility of its core functionalities.
Ecological Prospects and Uncertainties
The hybrid order book model constructed by Kuru is currently in the early stages of market validation. This model attempts to provide a new on-chain option between existing AMMs and centralized order books, making market-making behavior closer to traditional trading systems while retaining the openness and composability of decentralized protocols. Ideally, this architecture can not only cover mainstream trading pairs but also serve long-tail assets, thereby providing a unified trading infrastructure for various asset types.
The team maintains a relatively optimistic attitude towards market opportunities. On one hand, the trading logic of on-chain order books aligns more closely with the strategic habits of professional market makers and institutional investors; on the other hand, with high-performance infrastructure like Monad, execution efficiency may see significant improvements, making it possible for models that could only operate on centralized exchanges to run on-chain for the first time. Additionally, due to Monad's compatibility with the Ethereum developer ecosystem, Kuru can relatively smoothly attract existing developers to integrate its trading components, leaving ample room for product expansion.
However, there are still a series of uncertainties at the current stage. First is the risk of technical realization. Although Monad's design goals are attractive, there remains a gap between the white paper and the actual operating environment. On-chain throughput, transaction confirmation, node synchronization, and other dimensions may become limiting factors. Secondly, there is the actual motivation for user migration. Currently, most on-chain trading users have formed habits of using AMM platforms, and persuading them to switch to an order book model is not easy. Although Kuru supports simplifying liquidity participation mechanisms, the actual effects will still require time to observe.
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