Category Labs Announces Monad Private Settlement

At the OPEN conference today, Category Labs introduced Monad Private Settlement, a new design that will enable businesses to run private, sovereign execution, and settlement on the Monad network, without leaving its shared liquidity.

Businesses will get the confidentiality and control they need by configuring the domain’s validators, trust model and access policies. Transactions, state, and contract code are encrypted, with each domain connected to the shared liquidity of the Monad network.

The functionality described below reflects the current design and planned capabilities of Private Settlement.

Businesses benefit from privacy without leaving the open economy

The web grew because it runs on shared, open infrastructure. Companies could build services without controlling the underlying infrastructure. As commerce moved online, businesses needed a way to transmit payment and customer information without exposing it publicly. Encryption made secure transactions possible on the open web without forcing commerce onto separate, private networks.

Public blockchains offer similar advantages for financial activity: shared infrastructure, pooled liquidity, composability, verifiable settlement, and access without relying on a single operator. But transactions are public by default, and many routine financial activities depend on information staying confidential.

Banks cannot publish every client balance.
Trading firms cannot expose every quote, order and position.
Companies need to protect treasury activity, payroll, supplier payments and counterparties.
Jurisdictions impose their own rules on who can access data and who can participate.

A public chain makes onchain activity publicly visible by default. That makes privacy one of the biggest remaining barriers to institutions moving real workflows onchain.

Onchain privacy has previously come with trade-offs

One approach is a private or permissioned network, operated by a single entity or in a consortium. While this can provide confidentiality, it can also introduce trade-offs:

Fragmented liquidity: Private networks operate within their own isolated pool.
Bespoke bridges: Every connection to other markets may require custom integrations, and atomic settlement across bridges is hard to guarantee.
Central control: Private networks may rely on a single operator for governing and operations.
Build and maintenance: A dedicated chain can require funding, hiring, a long build timeline, and ongoing upkeep.

Once assets and liquidity concentrate on a settlement network, moving them elsewhere becomes difficult. If the world's assets settle on private networks, finance gets faster but control remains concentrated.

Privacy that lives on an open network with shared liquidity

Category Labs is designing a different answer: privacy that lives on the Monad network. Monad Private Settlement is a private, sovereign, execution environment that lives on the Monad network, not beside it.

A hub contract on the L1: Each domain is enabled by a standard EVM smart contract on the Monad L1. No fork, no protocol change, and no offchain components are required.
Encrypted by design: Transactions, state and contract code inside a domain are encrypted, including from the L1 itself. Users encrypt transactions, address them to the target domain, and submit them to the L1 for sequencing.
Sequence on the network: The Monad network provides sequencing, ordering, and state settlement for every domain, so domains inherit the accountability of the public network.
Private across domains: Transactions between domains are encrypted. A token transfer between domains shows neither the account addresses nor the amounts publicly.

Every domain will be embedded into the Monad network, so businesses always get a high-performance, fully EVM-compatible network. Privacy has usually meant giving up speed. Here it doesn't have to.

The institution sets the rules

Every institution answers to someone: its clients, its regulators, its auditors and its own risk committee. Private Settlement is designed so each domain can reflect those obligations from day one.

When a domain is created, the business decides:

Who operates it: The institution selects the validators that run its domain, and can bring its own
Where it sits: Each domain can be configured with a jurisdictional context, supporting institution-specific data handling and access requirements
Who sees what: Access is denied by default. Balances, records, logs, addresses and receipts each carry their own policy, even operators cannot see transactions unless permissioned.
Which assets come in: The institution chooses which tokens from the Monad network are available inside its domain.

None of this is locked in. The configuration can be updated by authorised operators.

Confidential doesn't mean unaccountable. Institutions control who is able to see information within their domains. Auditors and regulators can be granted scoped access to relevant information to meet applicable compliance obligations. Confidential transaction data within the domain is not exposed publicly.

Private, and still connected to the market

With Private Settlement, every domain is designed to be sequenced on the Monad network, so it stays part of the same market:

Shared liquidity: Domains draw on the pooled liquidity of the Monad network instead of starting from an empty pool.
Standard connections: Domains transact with each other and with the network through standard EVM flows, not custom bridges.
All legs or none: If it’s a two-way transaction, it settles atomically. Delivery-versus-payment is built in.
Shared services: Specialized domains can offer services such as oracles or connections to legacy systems to other domains.

Consider a cross-border payment. Today, a European bank paying a US supplier for a client typically routes through correspondent banks and keeps money parked abroad so the payment can clear. With Private Settlement, Bank A and Bank B could each run a domain under their own jurisdiction's rules. Bank A confirms the payee with Bank B, Bank B confirms the account and screening, and the design allows the payment to settle against shared liquidity on the Monad network. Each bank sees only its own records. Both legs settle, or neither does.

Unlocking new utility

Banks: tokenized deposits and payments that keep client information confidential, with the scoped access for regulators and auditors as needed.
Corporate treasuries: payroll, supplier payments and treasury movements kept private, with audit and governance controls.
Asset managers: tokenized funds with confidential investor registers.
Trading firms: OTC desks can keep positions, order details and counterparty information private, while settling against shared liquidity.

Where it stands

The future EVM also needs fairer markets, privacy, open-source infrastructure and security that can evolve as the world changes. Private Settlement is the privacy piece of that picture, because the goal isn't to recreate today's financial system on new infrastructure. It's to build a better one.

Monad Private Settlement is a published design and is not yet live. Category Labs is working with early design partners and operators. If your team builds payments, treasury or trading workflows and wants to design with Category Labs, get in touch.