As the Monad mainnet launch approaches, foundational protocols are emerging to support its ecosystem. Magma is positioning itself as a core infrastructure layer for the anticipated blockchain, focusing on two critical functions in decentralized finance (DeFi): liquid staking and Maximal Extractable Value (MEV).

A New Approach to Liquid Staking

Liquid staking is a vital component of any DeFi ecosystem, allowing users to stake a network’s native token to earn yield while receiving a derivative token that can be used elsewhere. These liquid staking tokens (LSTs) enhance capital efficiency and contribute to network security.

Magma’s protocol will introduce gMON, a liquid staking token designed to be a staple asset within Monad’s DeFi landscape. What sets Magma apart is its plan to implement a 100% buyback-and-burn mechanism for its token, a first for an LST protocol. This model ensures that all protocol revenue is used to buy and permanently remove Magma tokens from circulation, directly linking the protocol’s success to the token’s value.

David Mass, co-founder of Hydrogen Labs, noted that Magma is setting a new standard for sustainable token economics and cementing the importance of community ownership with this innovative approach.

Optimizing Value with an Advanced MEV Engine

Beyond liquid staking, Magma is developing a sophisticated MEV engine. MEV refers to the value that can be extracted from block production by reordering, inserting, or censoring transactions. Magma’s system is structured in three stages: a searcher API for submitting transaction bundles, a block engine for simulation, and validator integration for implementation into blocks.

Leveraging Monad’s high-throughput architecture, Magma’s MEV process is designed to outperform those on legacy blockchains by reducing latency and removing intermediary steps. The protocol will also feature a comprehensive dashboard displaying key metrics like MEV value, total gas used, and transactions per block. A gamified “Searcher” leaderboard will highlight top-performing addresses, adding a competitive layer to the process.

Building a Community-First Foundation

Following Monad’s community-centric ethos, Magma has cultivated a dedicated following known as the “DragoNads.” This group has been an early and active part of the broader Monad community.

To solidify its community, Magma released a collection of 3,000 dragon-themed NFTs called ROARRRS on the Monad Testnet in July. The collection, minted on a first-come, first-served basis via Magic Eden, quickly gathered attention. Alongside these are 300 rarer SCALEs NFTs, which were distributed to key community members and partners. Both collections serve as proof-of-community tokens, signifying early involvement in the ecosystem.

With its mainnet launch expected in the fourth quarter of 2025, Magma is well-capitalized for future development. The project recently raised $4.2 million in a funding round that included CMS Holdings, Maelstrom, and Animoca. Theo Fields, a general partner at Bloccelerate, commented on the team’s early conviction to build on Monad, noting they are well-positioned to serve a community with significant pent-up demand. By providing essential DeFi services, Magma aims to become a cornerstone of the Monad network.