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, briefly falling 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 market cap 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-mint community.

Previously, Monad was valued at $3 billion, making it the highest-valued unissued Layer 1 token in the market, and was highly anticipated by the grab-and-mint 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 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 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. The accumulated token value across multiple addresses can still be significant. However, Monad’s official stance did not follow the wishes of the large grab-and-mint groups, excluding all testnet addresses from the airdrop.

A studio head from Hangzhou, known as A Du (pseudonym), told ChainCatcher, “All testnet interaction addresses are anti-grab, and participating in various NFTs basically has no use. The only addresses that received the Monad airdrop are some old addresses that never interacted with Monad but traded on Hyperliquid.”

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 Fengmi, the idea behind this airdrop was to bind contributors, identity, and potential people to Monad—focusing on identity plus contribution, such as Monad ecosystem developers, heavy DeFi users, and high-quality NFT holders.

Alpha influencer 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. The Monad team considers this a substantial contribution, which is also a common 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’s early days to Gitcoin, Arbitrum, Scroll, Berachain, Aster, and thousands of other projects, airdrops have become an essential method for attracting users.

During this period, the standards for airdrops have continuously forked and evolved. Some projects emphasize fairness and generosity, being quite accommodating to grab-and-mint participants who interact frequently. Others impose strict rules on testnet/mainnet interactions, implementing rigorous vetting based on a scoring system. This time, Monad completely abandoned testnet interaction users, or retail investors.

Fengmi commented on X, “If a network neglects retail investors for a long time, it will make the network overly elitist early on, losing a broad community base. In the early days of Bitcoin, Ethereum, Solana, and BSC, it was a small group of seemingly insignificant retail investors who brought network effects and community vitality.” He believes Monad should allow grassroots retail investors a gradual growth space, even if small, so more people can truly become part of the MON network community.

Chasing the trend, some believe that grab-and-mint participants contribute not only 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 IceFrog on Twitter.

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

Australian veteran Master Brother 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-mint groups: you come and grab, help me get listed on major exchanges, and I’ll give you airdrops in return. But now, CEX listings no longer consider on-chain data or user metrics because everyone knows these numbers are heavily inflated,” he posted on Twitter.

The cold reality is that the industry’s logic is ruthless. As on-chain data bubbles grow and grab-and-mint selling pressure negatively impacts 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 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 a vital source 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. In the future, testnet activity will probably decline sharply,” said Master Brother.

In fact, many KOLs predicted this “table-flip” by Monad. Veteran influencers like Master Brother, IceFrog, and Fengmi had already publicly 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, multiple studios interviewed reported that their earnings are now 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-lobbying. Simply following the crowd to grab tokens is no longer a lucrative strategy,” A Du said.

As the market cap of top-tier projects like Monad significantly falls below expectations, and many projects lock up user airdrop shares for extended periods post-TGE, grab-and-mint participants’ position in project benefit distribution continues to decline, with token values shrinking. The volume-driven grab-and-mint logic 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; Monad’s airdrop just sealed the last crack,” sighed Master Brother.