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. It briefly fell below the cost basis for public sale participants. Currently, the FDV remains in the $3 billion to $3.5 billion range, which is not only lower than the $8 billion mainstream predicted market cap 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-mint community.

Previously, Monad, valued at $3 billion, became the highest-valued unlaunched Layer 1 in the market, earning high hopes from the grab-and-mint crowd. Its testnet has accumulated over 300 million interaction addresses, with many studios using millions of addresses to register Monad addresses. At the end of October, Monad officially opened for airdrop queries, but unexpectedly excluded all testnet interaction addresses from the airdrop scope.

The logic of the grab-and-mint community is that “sunshine coverage” is a common practice among many project teams. As long as they maintain frequent interactions, they can potentially earn token rewards ranging from 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 large grab-and-mint crowd’s wishes and excluded all testnet addresses from the airdrop.

“The addresses that interacted with the testnet are all anti-grab, and participating in various NFTs basically has no real use. 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 grab-and-mint studio in Hangzhou, to ChainCatcher.

For a time, Monad became the target of fierce criticism from many grab-and-mint users, but the Monad team remained unmoved. According to well-known KOL Feng Mi, the idea behind this airdrop 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 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. Monad’s official considers this a substantial contribution, which is also a key criterion for airdrops from most projects.

For project teams, the significance of airdrops is twofold: on one hand, to reward long-term supporters and demonstrate their value for community users; on the other hand, to incentivize active participants and influencers in the surrounding ecosystem, attracting them into their own ecosystem through airdrops. From Uniswap to Gitcoin, Arbitrum, Scroll, Berachain, Aster, and thousands of other projects, airdrops have become an essential way for projects to attract users.

During this period, the standards for airdrops have continued to diverge and evolve. Some projects emphasize fairness and generosity, being quite accommodating to grab-and-mint participants, while others impose strict rules on testnet/mainnet interactions, implementing rigorous witch-hunting based on a points system. 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 foundation. In the early days of Bitcoin, Ethereum, Solana, and BSC, it was a small group of seemingly insignificant retail investors that brought network effects and community vitality,” Feng Mi said on X. He believes Monad should give grassroots retail investors a chance to grow gradually—any small step is better than none, and more people can truly become part of the MON network community.

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

However, from the project team’s perspective, they need to formulate airdrop strategies based on long-term project development needs. “Grab-and-mint participants 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 really necessary to give them tokens?” said an anonymous KOL, describing grab-and-mint users as “parasites” in the crypto ecosystem.

Australian senior brother also believes that the industry’s airdrop logic is changing. “In the past, when CEXs evaluated a project’s fundamentals, they paid close attention to on-chain activity and active user metrics. During cold starts, projects needed popularity. For a long time, project teams tacitly or explicitly reached an understanding with grab-and-mint armies: you come to grab-and-mint, help me get listed on major exchanges, and I’ll give you airdrops—sharing the profits. But now, CEX listings no longer focus on 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-mint selling pressure negatively impacts many projects’ token prices, Monad’s approach is understandable. However, this is unlikely to be the choice for most projects, as Monad, as a capital-heavy public chain project, still has many cards to play. Its technical strength and potential ecosystem explosion could bring a large community of users. But for most projects, which are essentially marketing-oriented, airdrops are necessary to attract attention and market hype.

In the long run, airdrops remain one of the important sources of value in the crypto industry, but their logic and targets are undergoing profound changes. “The results of Monad’s airdrop basically mark the collapse of the testnet grab-and-mint track, and in the future, there will probably be no more testnet spamming,” said Australian senior brother.

In fact, many KOLs predicted this “table-flip” by Monad. As early as before, many like Australian senior brother, Bingwa, and Feng Mi 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 accounts.

Additionally, several interviewed studios reported that their earnings are lower than last year and below expectations. “The key is to find areas where you have advantages—whether it’s low labor costs, advanced technology, early project discovery through sharp research, or influential KOLs for mouth-lobbying. Simply following the crowd to grab-and-mint is now quite difficult to achieve substantial returns,” A Du said.

As the market capitalization of top-tier projects like Monad has significantly fallen below expectations, and many projects lock up user airdrop shares for extended periods after TGE, grab-and-mint participants’ position in the project ecosystem has continued to decline, with token values shrinking. The grab-and-mint logic based on volume is no longer sustainable.

“So, the era of retail investors entering the primary market for cheap gains through labor is truly over. The door has already been closing for a long time; Monad’s airdrop just sealed the last crack,” sighed Australian senior brother.