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 delivers a heavy blow to the Layer 1 narrative but also marks a “tragedy” for the “grab-and-earn” community.

Previously, Monad was valued at $3 billion, making it the highest-valued unlaunched Layer 1 in the market, and was highly anticipated by the grab-and-earn 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-earn community is that “sunshine shines on everyone,” a common approach for many projects. As long as users maintain frequent interactions, they 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 follow the community’s wishes and excluded all testnet addresses from the airdrop.

A representative of a grab-and-earn studio in Hangzhou, Ah Du (pseudonym), told ChainCatcher, “All testnet interaction addresses are anti-earning, and participating in various NFTs is basically useless. 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 grab-and-earn users, but the Monad team remained unmoved. According to well-known KOL Fengmi, the airdrop approach this time 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 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 Chinese community for Monad. The Monad team considers this a substantial contribution, which is also a key criterion for many project airdrops.

For project teams, the purpose of airdrops is twofold: to reward long-term supporters and demonstrate community value, 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 fairness and generosity, rewarding grab-and-earn users generously for interactions. Others impose strict rules on testnet/mainnet interactions, implementing rigorous vetting based on a points system. This time, Monad completely abandoned testnet 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 the broad community foundation. 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 to grow gradually—any small step can help more people become part of the MON network community.

Chasing the trend, some believe grab-and-earn participants contribute not only fees, data, and traffic but also serve as effective promoters. They argue that these users should be incentivized. “Monad’s approach is reckless, 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-earn users lack loyalty; they sell immediately after receiving airdrops and move on to the next project. This only adds selling pressure and offers no long-term benefit. Is it worth giving them tokens?” said an anonymous KOL, describing grab-and-earn users as “parasites” in the crypto ecosystem.

Australian veteran DaShangXiong also believes the industry’s logic for airdrops 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 often tacitly or explicitly reached an understanding with grab-and-earn communities: you come to grab-and-earn, help us get listed on major exchanges, and in return, we give you airdrops. But now, CEX listings no longer prioritize 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-earn 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, has many options. Its technical strength and potential ecosystem applications could attract a large community of users. But for most projects, which are primarily marketing efforts, airdrops are essential 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-earn track. In the future, testnet spamming will likely disappear,” DaShangXiong said.

In fact, many KOLs predicted Monad’s “table-flipping” move. Veteran influencers like DaShangXiong, IceFrog, and Fengmi publicly stated early on that they did not participate in the 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 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 discovery through sharp research, or influential KOLs for mouth-lobbying. It’s becoming harder to just follow the crowd and grab-and-earn for substantial gains,” Ah Du said.

As the market cap of top projects like Monad significantly falls below expectations, and many projects lock up user airdrop shares for long periods post-TGE, grab-and-earn’s influence in project benefit distribution continues to decline, with token values shrinking. The volume-driven grab-and-earn logic is no longer sustainable.

“So, the era of retail newcomers entering the primary market for cheap gains through labor provision is truly over. The door has already been closing for a while; Monad’s airdrop just sealed the last crack,” DaShangXiong lamented.