The Mao Party Fails Monad: "The logic of the testnet Mao Mao race has collapsed"

Author: Hu Tao, ChainCatcher

Yesterday, the highly anticipated Layer 1 public chain Monad’s token MON officially launched. Its price once fell below the public offering cost for early investors. Currently, its FDV remains in the $3 billion to $3.5 billion range, which is not only below the $8 billion mainstream market cap predicted on Polymarket but also far below the early Pre-TGE market valuation of $15 billion.

This not only delivers a heavy blow to the Layer 1 narrative but also marks a “tragedy” for the “grab and dump” community.

Previously, Monad was valued at $3 billion, making it the highest-valued unlaunched Layer 1 in the market. It was highly anticipated by the grab-and-dump community, with over 300 million addresses interacting on its testnet. Many studios registered Monad addresses using millions of addresses. At the end of October, Monad officially opened for airdrop queries but unexpectedly excluded all testnet interaction addresses from the airdrop.

The logic of the grab-and-dump community is that “sunshine and fairness” is a common practice among many projects. As long as they maintain frequent interactions, they can earn tokens worth a few dollars to dozens of dollars. The accumulated value across multiple addresses can still be significant. However, Monad’s official stance did not follow the community’s wishes and excluded all testnet addresses from the airdrop.

“A lot of addresses that interacted on the testnet are completely anti-grab, and participating in various NFTs is basically useless. The only addresses that received Monad airdrops are some old addresses that never interacted with Monad but traded on Hyperliquid,” said A Du (pseudonym), head of a grab-and-dump studio in Hangzhou, to ChainCatcher.

Suddenly, Monad became the target of fierce criticism from many grab-and-dump users, but the Monad team remained unmoved. According to well-known KOL Fengmi, the airdrop approach this time was to bind contributors, identity, and potential to Monad—focusing on identity + contribution, such as Monad ecosystem developers, heavy DeFi users, and high-quality NFT holders.

Alpha influencer Spark received a reward of 3 million MON, worth about $110,000. This was not due to his interaction record but because he served as a moderator in the Monad community for three years and established the Chinese community for Monad. The Monad team regarded this as a substantial contribution, which is also a key criterion for airdrops by most projects.

For project teams, airdrops serve to reward long-term supporters and demonstrate their value for community users. They also aim to incentivize active participants and influencers in the surrounding ecosystem, attracting them into their own ecosystem through rewards. From Uniswap to Gitcoin, Arbitrum, Scroll, Berachain, Aster, and thousands of other projects, airdrops have become an essential method for attracting users.

Over time, the standards for airdrops have evolved and diverged. Some projects emphasize fairness and generosity, rewarding grab-and-dump communities with airdrops for interactions. Others impose strict rules on testnet/mainnet interactions, implementing point systems and rigorous vetting. This time, Monad completely abandoned testnet users or retail investors.

“If a network neglects retail investors for too long, it risks becoming overly elitist early on, losing a broad community base. Early Bitcoin, Ethereum, Solana, and BSC relied on seemingly insignificant retail investors who brought network effects and community vitality,” Fengmi said on X. He believes Monad should allow grassroots retail investors some room to grow, even gradually, so more people can truly become part of the MON network community.

Chasing trends, some believe that grab-and-dump participants contribute not only fees, data, and traffic but also serve as effective promoters. They argue that these participants should be incentivized. “Monad’s approach is too thoughtless, shaking the trust foundation of the entire industry,” said Bingwa on Twitter.

However, from the project perspective, long-term development considerations should guide airdrop strategies. “Grab-and-dump participants lack loyalty; they sell immediately after receiving an airdrop and move on to the next project. This only adds selling pressure and offers no long-term benefit. Is it necessary to give them tokens?” said an anonymous KOL, describing grab-and-dump users as “parasites” in the crypto ecosystem.

Australian veteran Tao also believes the industry’s airdrop logic is changing. “In the past, CEXs focused heavily on on-chain data activity and active user metrics when evaluating a project’s fundamentals. During cold starts, projects needed popularity. For a long time, project teams tacitly or explicitly reached an understanding with grab-and-dump groups: you come and grab, help me get listed, and I’ll airdrop to you. But now, CEX listings no longer consider on-chain data or user metrics because everyone knows these numbers are heavily inflated,” he tweeted.

Business logic is ruthless. As on-chain data bubbles grow and grab-and-dump pressure negatively impacts token prices, Monad’s approach is understandable. However, this is unlikely to be the choice for most projects, as Monad, as a heavily capital-backed public chain, still has many cards to play. Its technical strength and potential ecosystem applications could attract a large community of users. But for most projects, which are essentially marketing efforts, airdrops are necessary to attract attention and market hype.

In the long run, airdrops remain a vital source of value in the crypto industry, but their logic and targets are undergoing profound changes. “The results of Monad’s airdrop essentially mark the collapse of the testnet grab-and-dump track. In the future, there will probably be no more testnet spamming,” said Australian veteran Tao.

In fact, many KOLs predicted Monad’s “table-flipping” this time. Early on, influencers like Tao, Bingwa, and Chasing Wind openly stated they did not participate in Monad interactions. It is understood that top KOLs will focus more on “mouth-lobbying,” arbitrage, and other diverse markets, while also concentrating on high-quality projects like Polymarket to create premium content.

Additionally, several studios interviewed reported that their earnings this year are lower than last year and below expectations. “The key is to find areas where we have advantages—low labor costs, advanced technology, early project insights, or influential KOLs for mouth-lobbying. It’s hard to get substantial returns just by following the crowd,” said A Du.

As the market cap of top-tier projects like Monad significantly falls below expectations, and many projects lock up user airdrop shares for long periods after TGE, grab-and-dump participants’ roles in project ecosystems diminish, and the value of their tokens continues to shrink. The grab-and-dump logic based on volume is becoming unsustainable.

“So, retail investors relying on labor to enter the primary market for cheap gains have already lost their window. The door has long been closing, and Monad’s airdrop just sealed the last crack,” sighed Tao.