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, its FDV remains in the $3-3.5 billion range, which is not only lower than the $8 billion mainstream market cap on Polymarket but also far below the $15 billion valuation in the early Pre-TGE market.

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

Previously, Monad was valued at $3 billion, making it the highest-valued unlaunched Layer 1 in the market, and was highly anticipated by whale hunters. 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 whale hunters is that “sunshine exposure” is a common practice among many project teams. As long as there are frequent interactions, they can potentially earn tokens worth a few dollars to dozens of dollars. The accumulated value across multiple addresses can still be significant. However, Monad’s official stance did not align with the whale hunters’ wishes, excluding all testnet addresses from the airdrop.

A杭州 whale hunting studio head, A Du (pseudonym), told ChainCatcher, “All testnet interaction addresses are anti-whale, 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.”

Suddenly, Monad became the target of fierce criticism from many whale hunters, 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 record but because he served as a moderator in the Monad community for three years and established the Monad Chinese community. The Monad team regarded this as a substantial contribution, which is also a common criterion for airdrops by 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 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 whale hunters participating in interactions. Others impose strict rules on testnet/mainnet interactions, implementing rigorous “whale” screening based on a point system. This time, Monad completely abandoned testnet interaction users, or retail investors.

Fengmi commented on X, “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.” He believes Monad should allow grassroots retail investors a gradual growth space, even if small, to truly turn more people into the community of MON.

Chasing the trend, whale hunters contribute not only fees, data, and traffic but also serve as effective promoters. Some believe these participants should be incentivized. “Monad’s approach is too thoughtless, shaking the trust foundation of the entire industry,” said IceFrog on Twitter.

From the project perspective, long-term development needs should guide airdrop strategies. “Whale hunters 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 whale hunters as “parasites” in the crypto ecosystem.

Australian master brother also believes the industry’s airdrop logic is changing. “In the past, CEXs focused 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 whale armies: you come to whale and help me get listed, I’ll give you airdrops, and we share the profits. But now, CEX listings no longer consider on-chain data or user metrics because everyone knows these numbers are heavily inflated,” he tweeted.

Business logic is ruthless. As on-chain data bubbles grow and whale 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 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 essentially mark the collapse of the testnet whale hunting and whale manipulation track. In the future, testnet activity will likely decline sharply,” said Australian master brother.

In fact, many KOLs predicted Monad’s “table-flipping” this time. Influencers like Australian master brother, IceFrog, and Fengmi publicly stated early on that they did not participate in Monad interactions. It is understood that top KOLs will focus more on “mouth farming,” arbitrage, and other diverse markets, 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 farming. It’s hard to get substantial returns just by following the crowd,” said A Du.

As the market cap of top projects like Monad significantly falls below expectations, and many projects lock user airdrop shares for extended periods after TGE, whale hunters’ position in the project ecosystem continues to decline, with token values shrinking. The whale hunting logic based on volume 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 Australian master brother.