The fur-pulling party failed Monad: "The logic of the Testnet fur-pulling track has collapsed"

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Author: Hu Tao, ChainCatcher

Yesterday, the highly anticipated Layer 1 public chain token MON of Monad officially launched, briefly falling below the public offering user cost price. Currently, the FDV is still hovering in the range of 3-3.5 billion USD, which is not only lower than the mainstream market prediction of 8 billion USD on Polymarket but also far below the earliest Pre-TGE market valuation of 15 billion USD.

This is not only a severe blow to the Layer 1 narrative but also a “tragic” milestone for the community of opportunistic investors.

Previously, Monad became the highest-valued unlaunched Layer1 in the market with a valuation of $3 billion, and it is highly anticipated by the community. Its testnet has accumulated over 300 million unique interacting addresses, with many studios using millions of addresses to register Monad addresses. At the end of October, Monad officially opened airdrop queries, but unexpectedly excluded all testnet interacting addresses from the airdrop eligibility.

The logic of the “毛党” (token farmers) is that “sunshine for all” is a common practice among many project teams. As long as they maintain a high frequency of interaction, they may receive token rewards ranging from a few dollars to several dozen dollars. The cumulative value of tokens across multiple addresses can still be considerable. However, the Monad team did not respond as the large token farmers wished, excluding all testnet addresses from the airdrop scope.

“All addresses interacting with the testnet have been exploited, and participating in various NFTs is basically useless. The only ones who received the Monad airdrop are actually some older addresses that have never interacted with Monad but have traded on Hyperliquid,” said A-Du (a pseudonym), the head of a毛 studio in Hangzhou, to ChainCatcher.

In a short period, Monad became the target of intense criticism from a large number of users looking to take advantage of it, but the Modad official remained unmoved. According to the well-known KOL Feng Mi, the idea behind this airdrop by Monad is to bundle individuals who have contributions, identities, and potential into Monad, focusing on identity + contribution, such as Monad ecosystem developers, heavy DeFi users, high-quality NFT holders, etc.

The well-known alpha blogger Spark received a reward of 3 million MON in this airdrop, currently valued at approximately $110,000. This is not due to his interaction records, but rather because he has served as a Mod in the Monad community for 3 years and established the Monad Chinese community. This is regarded by the Monad officials as a substantial contribution, which is also the main target for airdrops from most projects.

For project teams, the significance of airdrops lies both in rewarding long-term supporters of the project, reflecting their emphasis on community users, and in rewarding active participants and influencers within the surrounding ecosystem. By using airdrop rewards, they attract these individuals into their own ecosystem. From the earliest Uniswap to the thousands of projects that followed, such as Gitcoin, Arbitrum, Scroll, Berachain, and Aster, airdrops have been regarded as an essential way for project teams to attract users.

During this period, the standards for airdrops have also been continuously forking and evolving. Some projects focus on fairness and inclusivity, being quite generous to participants, while others impose strict rules for interactions on testnets/mainnets, implementing rigorous witch hunts based on a points system. This time, Monad has completely abandoned interactions with testnet users, or in other words, retail investors.

“If a network ignores retail investors for a long time, it will become too elitist in its early stages and lose a broad community base. In the early days of Bitcoin, Ethereum, Solana, and Bsc, it was supported by a group of seemingly insignificant retail investors who brought network effects and community vitality.” Feng Mi said on X. He believes that Monad should provide grassroots retail investors with a space to grow gradually; even a little bit can help more people truly become part of the MON network community.

Zhui Feng believes that the “毛人” (Mao Ren) not only contributes transaction fees, data, and traffic to the project parties, but also plays a significant role in promotion. Personally, I think these individuals need to be given certain incentives. “Monad's operations are really too poorly considered, shaking the trust foundation of the entire industry.” “Ice Frog” also stated on Twitter.

“But from the perspective of the project team, they need to formulate the project airdrop strategy based on the long-term development needs of the project. 'Yield farmers have no loyalty; they will sell as soon as they receive an airdrop and then run to the next project to yield farm. For the project, this only creates selling pressure and brings no long-term benefits. Is it necessary to airdrop to them?' an anonymous KOL described yield farmers as 'parasites' in the crypto ecosystem.”

The Master Brother from Down Under also believes that the logic of airdrops in the industry is changing. “In the past, when CEX evaluated a project's fundamentals, they paid great attention to the level of on-chain data activity and active user metrics. During the initial cold start of a project, it needed popularity. So for a long time, project parties tacitly allowed, or even reached an agreement with the ‘hair-pulling army’ that if you come here to help me boost my popularity for a major listing, I would airdrop to you in return, and we would share the profits. But now, CEX Listings no longer focus on on-chain data and users, because everyone knows that this data is severely inflated.” The Master Brother from Down Under stated in a post on Twitter.

The logic of business is ruthless. As the data bubble on the chain becomes increasingly severe and the selling pressure from those who exploit the system negatively impacts the price trends of many projects, Monad's choice is reasonable. However, this is destined not to be the choice of most projects, because Monad, as a public chain project with significant capital backing, still has many cards to play. Its technical strength and the potential explosive power of its ecological applications could bring it a large number of community users. But for most projects, they essentially belong to the marketing category and must rely on airdrops to attract attention and market heat.

In the long term, airdrops remain one of the important sources of value in the crypto industry, but the logic and targets of airdrops are undergoing profound changes. “The results of the Monad airdrop basically announce the collapse of the logic behind the testnet slave interaction and farming track, and in the future, it is highly likely that no one will be farming on the testnet anymore,” said Master Brother from Down Under.

In fact, Monad's “table flipping” this time has been anticipated by many KOLs, such as Master Brother from Australia, Ice Frog, and Chasing Wind, who have clearly stated early on that they did not participate in the interaction with Monad. It is understood that leading KOLs will devote more energy to “mouth rubbing,” arbitrage, and other more diverse markets, while also focusing on selected high-quality projects like Polymarket to concentrate on creating premium accounts.

In addition, multiple interviewed studios indicated that their earnings are not as good as last year and also below expectations. “The key is still to find areas where you have advantages, whether it’s low labor costs, advanced technology, sharp investment research to discover early projects, or influential KOLs to leverage. It’s quite difficult to achieve substantial returns by simply following the crowd and doing the same as everyone else,” said Adu.

As the market capitalization of leading projects like Monad significantly falls below market expectations, and many projects lock up user airdrop shares for a long time after their TGE, the position of profit-seeking individuals in the project's benefit distribution ecosystem has continued to decline, and the value of the tokens they hold keeps shrinking. The logic of winning by quantity is becoming increasingly unsustainable.

“So, the era where retail investors could enter the primary market to seize cheap dividends by providing labor has indeed come to an end. The door has actually been closing for a while, and Monad's airdrop was just the final nail in the coffin,” Master Brother from Australia remarked.