Monaco, a new decentralised trading protocol, has officially launched on the Sei blockchain, aiming to provide institutional-grade infrastructure for the burgeoning tokenised asset market, which is projected to reach $30 trillion by 2034. The protocol, incubated by Sei Labs and Monaco Research, introduces a hybrid trading model it claims can achieve “microsecond execution” on par with traditional exchanges like NASDAQ and NYSE.
The launch targets what Monaco sees as a fundamental flaw in the current financial system. “Traditional finance is broken. Intermediaries extract billions in fees, markets close when you need them most, and access is restricted by geography and wealth,” said Jay Jog, Co-Founder of Sei Labs, in the initial announcement. Monaco aims to build “Wall Street-grade decentralised trading infrastructure that operates 24/7, treats all participants fairly, and unlocks a new design space for high-performance trading platforms.”
At the core of this performance claim is a unique technical architecture. While the term “microsecond execution” on a decentralised network raises technical questions, the protocol’s design makes key tradeoffs to optimise for speed. In an interview with TradingTech Insight, Cody Garrison, Core Contributor at Monaco Protocol, explains the model.
“The v1 order book is designed with a hybrid model where the matching engine and order book are executed off chain in under 1ms, with settlement occurring on chain in under 400ms,” says Garrison. He notes that this allows the order book to remain ‘decentralised’ via a non-custodial architecture, ensuring users retain control of their assets until the point of trade.
A central innovation is Monaco’s “PitPass” system, a novel approach to revenue sharing designed as a transparent alternative to the often-criticised Payment for Order Flow (PFOF) model. Instead of charging retail traders, PitPass rewards the applications and front-ends that bring volume to the protocol.
“PitPass codes are a novel feature that unlock revenue generating opportunities for frontends and applications that plug into the open-source Monaco shared liquidity layer,” Garrison explains. “Based on the amount of volume a trading platform routes through Monaco, they will programmatically receive fee rebates.” He projects that for every $1 billion in volume, the protocol will generate approximately $1.2 million in fees, with the majority directed back to the integrated trading apps.
This model is designed to create a powerful network effect, where a shared liquidity layer allows new applications to tap into deep, institutional-grade liquidity from day one, avoiding the need to bootstrap their own.
Recognising that institutional adoption hinges on trust and regulatory clarity, Monaco is taking several steps to bridge the gap between traditional finance and DeFi. Garrison emphasises that “progressive decentralisation and governance are top of mind.” The protocol plans to launch with a decentralised governance model composed of liquidity providers, traders, and builders.
Furthermore, instead of building a single, canonical front-end, Monaco is fostering an ecosystem of diverse trading platforms built on its open-source protocol. This allows for the creation of curated, institution-focused front-ends that can incorporate necessary compliance standards like KYC. On the security front, Garrison confirms that Monaco is non-custodial, meaning funds will not need to be deposited or stored on the Protocol itself. He also states that the protocol is being actively audited by at least three auditing firms before launching later this year.
In a competitive digital asset landscape, Monaco is positioning itself not as just another trading platform, but as a foundational layer for institutional-grade applications. Garrison draws a clear distinction: “What Hyperliquid is for Retail Traders, Monaco is for Wall Street Institutions.”
He concludes that the combination of a shared liquidity layer and sub-millisecond, off-chain execution settled to a high-performance blockchain will let institutional traders run sophisticated strategies in a decentralised trading environment, powering what Monaco hopes will be a “decentralised trading renaissance.”
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