Magma debuted on Monad’s mainnet with an MEV-optimized liquid staking protocol that allows users to convert MON into a liquid asset, gMON, and participate in new sources of yield. The launch integrates transaction-ordering value capture and the ability to mint a collateralized stablecoin, all on Monad’s high-speed infrastructure.
Magma is a liquid staking protocol, owned by a DAO, that enables users to delegate MON and receive gMON in return, a liquid token that represents the staked MON and can be used in DeFi applications. MEV (Maximum/Maximal Extractable Value) is the additional profit that can be extracted by strategically ordering, including, or excluding transactions in a block; Magma integrates this mechanism to increase delegators’ yield.
The protocol combines Distributed Validator Technology (DVT) with an MEV infrastructure designed to capture and redistribute that value among delegators, aiming to raise the base staking returns. The deployment technical paper indicates a base estimated annual yield of around 8–12% and a potential additional improvement from MEV in the range of 10–30%.
Magma also enables the minting of ioUSD, a stablecoin backed by liquid staking tokens (LSTs) and real-world assets (RWAs), creating an internal liquidity circuit within the ecosystem.
What Magma offers on Monad
Monad is an EVM-compatible Layer 1 chain that employs parallel EVM execution for scalability and low latency; it targets 10,000 TPS, 0.8 second finality and 0.4 second block times. That architecture facilitates the deployment of existing Ethereum applications and provides the low-latency environment that favors efficient MEV capture.
The Monad Labs team includes Keone Hon, James Hunsaker and Eunice Giarta, and the platform has received $225 million in backing led by Paradigm. On the competitive side, Magma leverages Monad’s EVM compatibility to offer an alternative to MEV and liquid staking solutions on other chains; the native integration of ioUSD adds a capital-retention moat to the system.
The combination of MEV and LSTs introduces specific risk vectors: possible centralization of MEV capture, smart contract vulnerabilities, risk of depegging of gMON or ioUSD, and penalties for validator misbehavior (slashing). Additionally, regulatory scrutiny on value-extraction practices and the classification of new assets could increase as adoption grows. The project’s sustainability depends on robust audits, clear risk management frameworks and the effectiveness of DAO governance to oversee MEV distribution and validator operations.
The launch of Magma on Monad’s mainnet introduces a model that combines liquid staking, distributed MEV capture and a collateralized stablecoin to increase the utility of staked capital.
