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 Polymarket’s mainstream predicted market cap of $8 billion but also far below the early Pre-TGE market valuation of $15 billion.

This is not only a heavy blow to the Layer 1 narrative but also a “tragic” milestone for the “grab the tokens” community.

Previously, Monad was valued at $3 billion, making it the highest-valued unissued Layer 1 in the market, and was highly anticipated by the “grab the tokens” crowd. Its testnet has accumulated over 300 million interaction addresses, with many studios registering Monad addresses using millions of addresses. At the end of October, Monad officially opened airdrop queries, but unexpectedly excluded all testnet interaction addresses from the airdrop scope.

The logic of the “grab the tokens” community is that “sunshine and rain” are common practices among many project teams. As long as there are frequent interactions, participants can earn tokens worth a few dollars to dozens of dollars. When accumulated across multiple addresses, the token value can still be significant. However, Monad’s official stance did not align with the expectations of the large “grab the tokens” community, excluding 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 the Monad airdrop are some old addresses that never interacted with Monad but traded on Hyperliquid,” said A Du, head of a Hangzhou-based “grab the tokens” studio, to ChainCatcher.

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

Famous alpha blogger Spark received a reward of 3 million MON tokens in this airdrop, 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 Monad Chinese community. The Monad team considers this a substantial contribution, which is also a key criterion for airdrops by most projects.

For project teams, the purpose of airdrops is twofold: to reward long-term supporters and demonstrate their value for community users, and 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 broad distribution and generosity, being quite accommodating to “grab the tokens” participants. Others impose strict rules on testnet/mainnet interactions, implementing rigorous vetting based on points or other criteria. This time, Monad completely excluded testnet users or retail investors.

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

Chasing the trend, some believe that “grab the tokens” participants contribute not only fees, data, and traffic to projects but also serve as effective promoters. They argue that these participants should be incentivized. “Monad’s approach is reckless, 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 the tokens” participants lack loyalty; they sell immediately after receiving airdrops and move on to the next project. This creates selling pressure without long-term benefits. Is it necessary to give them tokens?," said an anonymous KOL, describing “grab the tokens” users as “parasites” in the crypto ecosystem.

Australian veteran DaShu 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 allowed ‘grab the tokens’ armies to come in, helping them get listed on major exchanges, and sharing the rewards. But now, CEX listings no longer prioritize on-chain data or user metrics because everyone knows these numbers are heavily inflated,” he tweeted.

Business is ruthless. As on-chain data bubbles grow and “grab the tokens” selling pressure negatively impacts many projects’ token prices, Monad’s approach is understandable. However, it is unlikely to be adopted by most projects, as Monad, as a heavily capital-backed public chain project, still has many options. Its technical strength and potential ecosystem explosion could bring 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 the tokens’ race. In the future, testnet activity will likely decline sharply,” DaShu said.

In fact, many KOLs predicted this “disruption” beforehand. Veteran influencers like DaShu, Bingwa, and Fengmi openly stated early on that they would not participate in Monad interactions. It is understood that top KOLs will focus more on “mouth-lobbying,” arbitrage, and other diverse market activities, 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. Simply following the crowd to grab tokens for quick gains is becoming increasingly difficult,” said A Du.

As the market cap of top projects like Monad significantly falls below expectations, and many projects lock up user airdrop shares for extended periods post-TGE, “grab the tokens” participants’ position in project benefit distribution continues to decline, with token values shrinking. The “quantity over quality” grab-the-tokens approach is no longer sustainable.

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