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Since the full endofunctor subcategory contains $1$ and is closed under composition, $1,T^2,T^3$ all belong to it. Terminality supplies unique natural transformations $\eta :1\to T$ and $\mu :T^2\to T$. The monad unit laws compare arrows $T\to T$, both necessarily the unique endomorphism, namely the identity. The associativity law compares arrows $T^3\to T$, again necessarily equal. Every monad structure uses these two unique arrows, so $\boxed{T\text{ has a unique monad structure}}$.

For a monad $S$ with underlying functor in the subcategory, the unique $\alpha :S\to T$ is a monad morphism. Its unit and multiplication compatibility compare, respectively, arrows $1\to T$ and $S^2\to T$ and therefore follow from terminality. A $T$-algebra $a:TX\to X$ restricts to the $S$-algebra $b=a{\alpha }_X$. The unit law is immediate. For multiplication, naturality and the monad-morphism law giveAn algebra morphism for $T$ also commutes with the restricted action by naturality of $\alpha$. Keeping underlying objects and arrows gives the required functor ${\mathcal{C}}^T\to {\mathcal{C}}^S$.

Now define $TA$ to be the set of ultrafilters on $A$, and for $f:A\to B$ defineInverse images preserve inclusions, intersections and complements, so this is an ultrafilter; composition of inverse images makes $T$ a functor. There are no ultrafilters on the empty set. Every ultrafilter on a disjoint binary union chooses exactly one summand, and restriction to that summand gives an ultrafilter there; extension back is inverse to restriction. Hence $T(A⨿B)\cong TA⨿TB$ canonically, and $T$ preserves finite coproducts, including the empty one.

Let $H$ be any other finite-coproduct-preserving endofunctor. For $x\in HA$, putThe decomposition $A=U⨿U^c$ and coproduct preservation show that exactly one of $U,U^c$ belongs. Refining two subsets into the four disjoint parts $U\cap V,U\setminus V,V\setminus U,(U\cup V{)}^c$ shows that an element lying in both indicated summands lies in their intersection summand. The same refinement for $U\subseteq V$ proves upward closure. Thus ${\alpha }_A(x)$ is an ultrafilter. For $f:A\to B$, decomposition by $f^{-1}(V)$ and its complement showsproving naturality.

For uniqueness, suppose $\beta :H\to T$ is natural. Since $T1$ is a singleton, naturality on the two inclusions $1\to 2$ forces ${\beta }_2$ to send every element in each of the two $H1$ summands of $H2$ to the corresponding principal ultrafilter. Apply naturality to the characteristic map ${\chi }_U:A\to 2$. It gives $U\in {\beta }_A(x)$ precisely when $H{\chi }_U(x)$ lies in the selected summand, which by the decomposition is precisely when $x$ lies in $HU\subseteq HA$. Hence ${\beta }_A={\alpha }_A$ for every $A$. ThereforeThis proves ultrafilter functor. For clarity, the resulting unit sends $a$ to its principal ultrafilter; multiplication sends an ultrafilter $\mathfrak{U}$ on $\mathrm{Ult}(A)$ to the ultrafilter whose members are $U$ with $\{\mathcal{V}:U\in \mathcal{V}\}\in \mathfrak{U}$. Naturality and the monad laws for these formulas also follow from the terminal construction.

A monad on a category $\mathcal{C}$ consists of an endofunctor $T$, a unit $\eta :1_{\mathcal{C}}\Rightarrow T$, and a multiplication $\mu :T^2\Rightarrow T$ satisfyingIf $F:\mathcal{C}\rightleftarrows \mathcal{D}:G$ is an adjunction with unit $\eta$ and counit $\epsilon$, thendefines the monad induced by an adjunction. The two triangle identities give the unit laws, while naturality of $\epsilon$ gives associativity.

Let $\mathcal{D}$ now be a full subcategory of $[\mathcal{C},\mathcal{C}]$ that contains the identity endofunctor and is closed under composition, and suppose $T$ is terminal in $\mathcal{D}$. There is exactly one natural transformationand exactly oneBoth sides of either unit law are endomorphisms of the terminal object $T$, so they equal $1_T$; both sides of associativity are maps $T^3\to T$, so they are equal as well. This gives a monad, and terminality also makes both structure maps unique. This is the monad structure on a terminal endofunctor.

For a set $A$, let $\mathcal{U}(A)$ be the set of ultrafilters on $A$. A function $f:A\to A^{\prime }$ induces the pushforwardwhich makes $\mathcal{U}$ the ultrafilter functor. There is no ultrafilter on the empty set. Moreover, every ultrafilter on $A\bigsqcup B$ contains exactly one of the complementary summands $A$ and $B$, and restriction gives a unique ultrafilter on that summand. Thereforeso $\mathcal{U}$ preserves finite coproducts.

Let $F:\mathbf{Set}\to \mathbf{Set}$ preserve finite coproducts. For $x\in F(A)$ defineThe decomposition $A=B\bigsqcup (A\setminus B)$ and preservation of coproducts say that $x$ lies in exactly one of the two corresponding images. Thus exactly one of $B$ and its complement belongs to ${\Phi }_A(x)$. Upward closure follows by factoring subset inclusions. If $B,C\in {\Phi }_A(x)$, decompose $A$ into the four disjoint Boolean cells determined by $B$ and $C$. The unique cell containing $x$ must lie inside both sets, so $B\cap C\in {\Phi }_A(x)$. Hence ${\Phi }_A(x)$ is an ultrafilter.

For $f:A\to A^{\prime }$, the decompositionsshow thatThus $\Phi :F\Rightarrow \mathcal{U}$ is natural.

It is the only such natural transformation. For $B\subseteq A$, let ${\chi }_B:A\to \{0,1\}$ be its characteristic function. Sinceand the two ultrafilters on $\{0,1\}$ are the principal ones, naturality with the two singleton inclusions forces any transformation $F\Rightarrow \mathcal{U}$ to send each summand to the corresponding principal ultrafilter. Naturality with ${\chi }_B$ then says that $B$ belongs to the image ultrafilter exactly when $x$ lies in the image of $F(B)\to F(A)$. Hence the transformation must be $\Phi$.

The ultrafilter functor is therefore the terminal finite-coproduct-preserving set endofunctor. The preceding terminal-object argument supplies its unique ultrafilter monad structure.

The ultrafilter functor is terminal among endofunctors of $\mathbf{Set}$ that preserve finite coproducts. For such an endofunctor $F$ and $x\in F(A)$, the unique natural map sends $x$ to

The ultrafilter functor carries the monad structure obtained from its terminality among finite-coproduct-preserving endofunctors of sets. Its unit sends a point to its principal ultrafilter; its multiplication sends an ultrafilter of ultrafilters to the ultrafilter of subsets whose corresponding basic set of ultrafilters is large.