Author: ChandlerZ, Foresight News
Structural bottlenecks in on-chain trading experiences are gradually emerging. Although the AMM model has fueled the early development of decentralized exchanges, its limitations in liquidity utilization efficiency, price discovery mechanisms, and support for limit orders have always created 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 in practice.
On July 7, Kuru Labs, a decentralized exchange on Monad Layer 1, announced the completion of $11.5 million in Series A financing, led by Paradigm, with angel investors including 0xDesigner, Viktor Bunin, Zagabond, Tristan Yver, Kevin Pang, Will Price, Alex Watts, Jordan Hagan, 3nes, Shreyas Hariharan, Auri, and Joe Takayama participating.
Kuru Labs is committed to building a full-chain trading platform that combines order book architecture and automated market-making logic on the high-performance Layer 1 blockchain Monad. The project aims to provide a more balanced product path for both professional traders and ordinary users through the reconstruction of the 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 fully blockchain-based decentralized trading platform that integrates 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 existing mainstream models to replicate a spot trading system that is closer to the centralized exchange experience on-chain.
In terms of financing, Kuru completed its seed round in mid-2024, raising $2 million, with Electric Capital as the lead investor. Brevan Howard Digital, CMS Holdings, Pivot Global, Breed, and Velocity Capital also participated in this round, along with angel investors like Keone Hon, Jarry Xiao, and Eugene Chen. This round of financing is mainly used to establish a technical team, build a minimum viable product (MVP), and prepare for the testing phase.
Kuru has announced the completion of its Series A financing, totaling $11.5 million, led by Paradigm. Kuru co-founder Vaibhav Prakash stated that Paradigm has played a positive role in the construction of on-chain market microstructure. 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 instead attempts to build a hybrid system that combines order books with automated market making functions. The core idea is to introduce a default automated market-making algorithm in the order book of each trading pair on-chain, allowing users to receive basic quoting 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, and it differs from the unified constraints of AMM price curves, instead offering the possibility of flexible switching between the two.
In terms of operational methods, Kuru has designed an order management mechanism suitable for the on-chain environment. The submission and cancellation of limit orders incur low and predictable gas costs, allowing market makers or strategic traders to operate frequently without being constrained by high costs. The team is also developing a passive liquidity mechanism, enabling ordinary users to use assets for liquidity support through strategy contracts without managing orders. This approach aims to lower participation barriers while enhancing the capital coverage rate 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 and is currently still in the testing phase, with the second phase of the testnet having 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 financing round, also led by Paradigm, with follow-on investments from Electric Capital, Coinbase Ventures, Castle Island Ventures, GSR Ventures, and Greenoaks, among others. Monad Labs previously secured $9 million in pre-seed funding in May 2022 and $10 million in seed funding in December 2022, and later raised $19 million under the leadership of Dragonfly Capital.
Unlike existing EVM public chains, Monad does not simply replicate the Ethereum code but reconstructs the execution engine from the ground up, adopting a parallel architecture and pipelining scheduling mechanism to enhance processing capabilities per second and reduce block delays. Internal testing shows that Monad can achieve a processing capacity of 10,000 TPS in a controlled environment and maintain a one-second block speed. Kuru relies on this underlying 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-side products within the Ethereum ecosystem, reducing migration costs.
Despite the advanced nature of the technical architecture, Kuru also faces practical limitations. The Monad mainnet has yet to go live, 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, and if Monad fails to deliver on time, it will directly impact the platform's launch schedule and the feasibility of core functionalities.
Ecosystem Prospects and Uncertainties
The hybrid order book model built by Kuru is currently in the early stages of market validation. This model attempts to provide a new on-chain option between existing AMM and centralized order books, making market-making behavior closer to traditional trading systems while retaining the openness and composability of decentralized protocols. In an ideal state, 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 better with the strategic habits of professional market makers and institutional investors; on the other hand, with high-performance infrastructure support like Monad, execution efficiency may see significant improvements, making it possible for models that could only operate on centralized exchanges to also function on-chain for the first time. Additionally, due to Monad's compatibility with the Ethereum developer ecosystem, Kuru can smoothly attract existing developers to integrate its trading components with the protocol, allowing for substantial space for product expansion.
However, a series of uncertainties still exist at the current stage. First is the risk of technical realization. Although Monad's design goals are attractive, there is still a gap between the white paper and the actual operating environment. Various dimensions such as on-chain throughput, transaction confirmation, and node synchronization may become limiting factors. Secondly, there is the actual motivation for user migration. Currently, most on-chain trading users have developed habits of using AMM platforms, making it difficult to persuade them to switch to an order book model. While Kuru supports a simplified way of participating in liquidity from a mechanism perspective, the actual effectiveness still needs time to observe.