Project Frankenstein aims to create a multi-tenant, scalable Prometheus-as-a-service solution, designed to meet specific requirements such as API compatibility, manageability, and high user capacity. The project has progressed with early design documents and a proof of concept that is reportedly scalable, but still has challenges such as limited query capabilities and potential hotspots in the system. The team is seeking feedback and is open to further development while also hiring for various positions.