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 not only dealt a heavy blow to the Layer 1 narrative but also marked a “tragedy” for the “grab and dump” 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-and-dump 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-and-dump community is that “sunshine” is a common practice among many projects. As long as they maintain frequent interactions, they can potentially earn tokens worth a few dollars to dozens of dollars. The accumulated token value across multiple addresses can still be significant. However, Monad’s official stance did not follow the expectations of the large grab-and-dump community, excluding all testnet addresses from the airdrop.

“Testnet interaction addresses are all 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 Monad’s official did not waver. According to well-known KOL Fengmi, the idea behind this airdrop was to bind contributors, those with identity and potential, into 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 in this airdrop, worth about $110,000. This was not due to his interaction history but because he served as a Monad community moderator for three years and established the Monad Chinese community. Monad’s official regarded this as a substantial contribution, which is also a key criterion for airdrops from most projects.

For project teams, the significance 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 way to attract users.

Over time, the standards for airdrops have evolved and diverged. Some projects emphasize fairness and generosity, being quite accommodating to grab-and-dump communities, while others impose strict rules on testnet/mainnet interactions, implementing rigorous “whale” screening based on points. This time, Monad completely abandoned testnet users or retail investors.

“If a network neglects retail investors 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 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 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-and-dump participants lack loyalty; they sell immediately after receiving an airdrop and move on to the next project. This only adds selling pressure without long-term benefits. Is it necessary to give them tokens?” said an anonymous KOL, describing grab-and-dumpers as “parasites” in the crypto ecosystem.

Australian veteran Da Shixiong 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 armies: you come to grab and dump, help me get listed on major exchanges, and I’ll give you airdrops. But now, CEX listings no longer consider on-chain data or user metrics because everyone knows these numbers are heavily inflated,” he tweeted.

The business logic is ruthless. As on-chain data bubbles grow and grab-and-dump pressure negatively impacts many projects’ token prices, Monad’s approach is understandable. However, this will likely not be the choice for most projects, as Monad, as a heavily capital-backed public chain project, 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 significant 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 logic. In the future, testnet activity will likely decline sharply,” Da Shixiong said.

In fact, many KOLs predicted this “table-flip” by Monad. Influencers like Da Shixiong, Bingwa, and Fengmi publicly stated early on that they would not participate in Monad interactions. It is understood that top KOLs will focus more on “mouth farming” (content creation), arbitrage, and other diverse markets, while also concentrating on high-quality projects like Polymarket to develop premium accounts.

Additionally, several studios interviewed reported that their earnings 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 discovery through sharp research, or influential KOLs for mouth farming. It’s becoming harder to simply follow the crowd and grab and dump for substantial gains,” 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, the grab-and-dump community’s influence in project benefit distribution continues to decline, with token values shrinking. The volume-driven grab-and-dump logic is no longer sustainable.

“So, the era of retail newcomers entering the primary market for quick profits is truly over. The door has already been closing for a while; Monad’s airdrop just sealed the last crack,” sighed Da Shixiong.