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 briefly 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 is not only a heavy blow to the Layer 1 narrative but also a “tragic” milestone 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.

The logic of the grab-and-dump community is that “sunshine” (public exposure) is a common practice among many projects. As long as there are frequent interactions, users can earn tokens worth a few dollars to dozens of dollars. The accumulated value of tokens across multiple addresses can still be significant. However, Monad’s official stance did not align with the expectations of the large grab-and-dump 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 Monad airdrops are some old addresses that never interacted with Monad but traded on Hyperliquid,” said A Du, 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 stance remained firm. According to well-known KOL Fengmi, the airdrop approach this time was to bind contributors, identity, and potential individuals 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 history but because he served as a moderator in the Monad community for three years and established the Monad Chinese community. Monad’s official considers this a substantial contribution, which is also a key criterion for most project airdrops.

For project teams, the purpose of airdrops is twofold: to reward long-term supporters and demonstrate community importance, and to incentivize active participants and influencers in the 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, rewarding grab-and-dump users with high frequency. Others impose strict rules on testnet/mainnet interactions, implementing rigorous vetting based on points or other criteria. This time, Monad completely abandoned testnet users or retail investors.

“If a network neglects retail users 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 users who brought network effects and community vitality,” Fengmi said on X. He believes Monad should allow grassroots retail investors to grow gradually—any small step can help more people become part of the MON network community.

Zhuifeng believes that grab-and-dump participants contribute not only fees, data, and traffic but also serve as effective promoters. He personally thinks they should be incentivized. “Monad’s approach is too thoughtless, shaking the trust foundation of the entire industry,” said Bingwa on Twitter.

From the project perspective, long-term development considerations should guide airdrop strategies. “Grab-and-dump users lack loyalty; they sell immediately after receiving airdrops and move on to the next project. This only creates selling pressure without long-term benefits. Is it necessary to give them tokens?” said an anonymous KOL, describing grab-and-dump users 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 projects, especially during cold starts. Projects needed hype. For a long time, project teams tacitly or explicitly reached an understanding with grab-and-dump groups: you come to grab and dump, help us get listed, and in return, you’ll get airdrops. Everyone shares the gains. But now, CEX listings no longer consider 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-and-dump selling pressure negatively impacts token prices, Monad’s approach is understandable. However, most projects will not follow suit because Monad, as a heavily capital-backed public chain project, still has many options. Its technical strength and potential ecosystem explosion 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 logic. In the future, testnet activity will likely decline sharply,” Da Shixiong said.

In fact, many KOLs predicted this “disruption.” Veteran influencers like Da Shixiong, Bingwa, and Zhuifeng had already publicly stated they would not participate in Monad interactions. It is understood that top KOLs will focus more on “mouth-lobbying,” arbitrage, and other diverse markets, as well as 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 and dump makes it hard to earn substantial profits,” 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 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 no longer sustainable.

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