The Monado is a red broad sword that is characterized for having a transparent circle near its center. Once activated it will open and form a laser blade.
As Shulk points out during the first few minutes of gameplay, the crystal of the Monado is not a singular, but it is made out of several layers, each layer has a symbol that represents a specific ability of the blade. It starts being able to cut Mechon and able to infuse the party with the same ability. Later on it gains the ability to give a shield to other party members, eventually it also acquires the ability to increase the movement speed of the party. It has the ability to disturb the Telethia skills leaving them vulnerable to attack. The final skill is the ability to cut the metal faces Mechon.
The sword in question seems to posses a degree of sentience because it can chose it's wielder. Dunban was at one point the only one who could wield it, but he started losing control of it during The Battle of Sword Valley, and it then chooses Shulk as it's new wielder during the battle for Colony 9. It is unknown why it rejected Dunban and why it rejected Shulk at the beginning of the game.
As a side note those who are not meant to wield the Monado cannot control it and will be dragged around by it until it is released from the grasp of the being that took hold of it or is deactivated. Those who still are able to resist said force will be surprised with a several electrical shock of unknown voltage, if overused on that state the user will be crippled eventually.
A rather passive ability for those who wield the Monado is that of seeing a few seconds into the future and being able to change it. This is most noted on battle and cutscenes were Shulk gets a sudden flash seeing something that usually happens within the next few minutes of the game.
The Monado is sentient as it the secondary body for Alvis, the seer of the High entheletia, who before the creation of the world were shulks lives in was a super computer. After meeting Shulk he chooses to help him in a number of instances, culminating with helping to bring down Zanza and proclaiming Shulk the new god of the world.
The Monado was originally sealed in a temple deep within the mountains until a hom expedition found it (in this expedition several important characters were present including Shulk as a child). There isn't any in-game reason of why the Monado was sealed away, one posibility lies within the High entheletia, who have a prophecy of sorts regarding the Monado. One that states that it will bring destruction to their city, be it wanted, or not.
It would seem that for those who wield and master the Monado they become Gods.
It is unknown if it's true that the Monado was crafted by Zanza in ages past (this is because the leader of the Machina also wields a Monado and in a similar fashion Zanza also dons one, making this the third Monado).
If you start a New Game Plus the Monado will dramatically change shape, it will be a single broadsword with a teal blue tone and will keep all the learnt skills (note that despite being able to kill the Metal face Mechon those are scripted boss battles, so they will end once you reduce their health to a certain point).
The Monado grants it's user the ability to see onto the future, aside that it's the only known blade that has the quality of breaking down Mechon hence it is valuable for the hom as a tactical weapon. A unique ability is also that of being able to interrupt the Telethia mind reading abilities and erasing it's protective barrier, below is a full list of Abilities:
- Buster: The Monado activates and a large laser blade shows, it deals great damage to Mechon-Type enemies.
- Enchant: The Monado grants the friends of its owner the ability to cut down Mechon.
- Shield: The Monado protects those who's owner cares, it makes a barrier that is effective against enemies of the same level or lower.
- Speed: The Monado increases the speed of the friends of it's owner allowing them to dodge enemy attacks more often.
- Purge: The Monado blocks any kind of telepathy and is able to remove protective barriers, it is especially useful against the Telethia.
- Armor: The Monado protects it's owner by reducing the damage he or she takes during battle. This becomes more effective as this skill is upgraded.
- Cyclone: The Monado generates a small cyclone that damages anything that threatens its master.
- Eater: The Monado can remove enemy buffs and leave them bleeding as long as they are in reach of the frontal arc range of this technique.
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