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 cost basis for public sale participants. Currently, its FDV remains in the $3-3.5 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 not only delivers a heavy blow to the Layer 1 narrative but also marks a “tragedy” for the “grinding for tokens” 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 token-grinding community. 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 token grinders is that “sunshine and rain” is a common practice among many project teams. As long as they 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 align with the expectations of the large token-grinding community, excluding all testnet addresses from the airdrop.

“A lot of addresses that interacted on the testnet are completely anti-grind, 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 (pseudonym), head of a token-grinding studio in Hangzhou, to ChainCatcher.

Suddenly, Monad became the target of fierce criticism from many token grinders, but the Monad team remained unmoved. According to well-known KOL Fengmi, the idea behind this airdrop 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.

Top alpha blogger Spark received a reward of 3 million MON 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 key criterion for most project airdrops.

For project teams, airdrops serve to reward long-term supporters and demonstrate their value for community users. They also aim to incentivize active participants and influencers in the surrounding ecosystem, attracting them into their own ecosystems through token 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, being quite lenient with token grinders participating in interactions. Others impose strict rules on testnet/mainnet interactions, implementing rigorous “whale” screening based on points systems. This time, Monad completely abandoned testnet users or retail participants.

“If a network neglects retail users for too long, it risks becoming overly elite 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,” Fengmi said on X. He believes Monad should allow grassroots retail users some space to grow gradually, even if just a little, so more people can truly become part of the MON network community.

Chasing trends, some believe that token grinders contribute not only fees, data, and traffic but also serve as effective promoters. They argue that these grinders should be incentivized. “Monad’s approach is too 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. “Token grinders 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 token grinders as “parasites” in the crypto ecosystem.

Australian veteran Tao 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 token grinders: you grind for me, help me get listed, and I’ll give you airdrops. But now, CEX listings no longer care about 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 token grinders’ 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 heavily capital-backed public chain project, still has many cards to play. Its technical strength and potential ecosystem explosive power could bring it 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 grind and token farming track. In the future, testnet activity will likely decline sharply,” said Tao.

In fact, many KOLs predicted this “table-flip” by Monad. Veteran influencers like Tao, Bingwa, 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” (content creation), arbitrage, and other diverse markets, while also concentrating on high-quality projects like Polymarket to develop premium accounts.

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—whether low labor costs, advanced technology, early project discovery through research, or influential KOLs for mouth farming. Simply following the crowd to grind tokens is now quite difficult to achieve substantial gains,” A Du said.

As the market capitalization of top projects like Monad significantly falls below expectations, and many projects lock up user airdrop shares for long periods after TGE, token grinders’ position in the project ecosystem continues to decline, with token values shrinking. The “quantity over quality” token farming logic is no longer sustainable.

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