The Maoist faction has fallen: Monad says, "The logic behind the testnet grab race has collapsed."

Author: Hu Tao, ChainCatcher

Yesterday, the highly anticipated Layer 1 public chain Monad token MON officially launched, briefly dipping below the public offering user cost price. Currently, the FDV still hovers in the range of $3 to $3.5 billion, which is not only lower than the mainstream predicted market cap of $8 billion on Polymarket but also far below the earliest Pre-TGE market valuation of $15 billion.

This not only strikes a heavy blow to the Layer 1 narrative but also marks a “tragedy” for the profit-seeking community.

Previously, Monad became the highest-valued unissued Layer 1 in the market with a valuation of $3 billion, which the profit-seeking community had high hopes for. Its testnet has accumulated over 300 million interactive addresses, and many studios have registered Monad addresses using millions of addresses. At the end of October, Monad officially opened the airdrop query but unexpectedly excluded all testnet interactive addresses from the airdrop.

The logic of the profit-seeking community is that “sunshine” is a common practice among many project teams. As long as they maintain a high frequency of interactions, they might earn token rewards ranging from a few dollars to several tens of dollars. The cumulative token value from multiple addresses could still be considerable. However, Monad officials did not respond as the large profit-seeking community wished, excluding all testnet addresses from the airdrop.

“All interactive addresses on the testnet were completely excluded, and participating in various NFTs was basically of no use. The only ones who received the Monad airdrop were some old addresses that had never interacted with Monad but had traded on Hyperliquid,” said A Du (pseudonym), the head of a profit-seeking studio in Hangzhou, to ChainCatcher.

In an instant, Monad became the target of fierce criticism from many profit-seeking users, but Monad officials remained unfazed. In the view of well-known KOL Feng Mi, Monad’s airdrop strategy is to bundle individuals with contributions, identity, and potential into Monad, focusing on identity + contribution, such as Monad ecosystem developers, heavy DeFi users, and quality NFT holders.

Well-known alpha blogger Spark received a reward of 3 million MON in this airdrop, currently valued at about $110,000. This was not due to his interaction record, but because he served as a Mod for the Monad community for three years and established the Monad Chinese community. This was regarded by Monad officials as a substantial contribution, which is also a key target for most project airdrops.

For project teams, the significance of airdrops lies in rewarding the project’s long-term supporters, reflecting their importance to community users, and rewarding active participants and influencers in the surrounding ecosystem, using airdrop rewards to attract them to their ecosystem. From the earliest Uniswap to thousands of projects like Gitcoin, Arbitrum, Scroll, Berachain, and Aster, airdrops have been seen as a necessary way for project teams to attract users.

During this period, the standards for airdrops have constantly forked and evolved. Some projects focus on equitable distribution and are generous to participating profit-seekers, while some projects set strict rules for testnet/mainnet interactions, implementing stringent screening based on a points system. This time, Monad completely abandoned testnet interactive users, or in other words, retail investors.

“If a network ignores retail investors for a long time, it will become overly elitist in its early stages, losing a broad community base. In the early days of Bitcoin, Ethereum, Solana, and BSC, it relied on a large number of seemingly insignificant small retail investors who brought network effects and community vitality,” said Feng Mi on X. He believes that Monad should provide a space for grassroots retail investors to gradually grow, even if just a little, so that more people can truly become a community of the MON network.

Chasing Wind believes that profit-seekers not only contribute transaction fees, data, and traffic to project teams but also play a good publicity role, and personally think that these people need some incentives. “Monad’s actions are really too thoughtless, shaking the trust foundation of the entire industry,” said Ice Frog on Twitter.

But from the perspective of project teams, they need to formulate airdrop strategies based on the long-term development needs of the project. “Profit-seekers have no loyalty; they will sell as soon as they receive the airdrop and then go to the next project to profit. For projects, this will only create selling pressure without long-term benefits. Is it necessary to distribute to them?” an anonymous KOL described, saying that profit-seekers are like “parasites” in the crypto ecosystem.

Master Brother from Australia also believes that the logic of airdrops in the industry is changing. “In the past, when a CEX assessed a project’s fundamentals, it paid great attention to the vibrancy of on-chain data and active user metrics. Project teams needed popularity during cold starts. So for a long time, project teams tacitly allowed or even reached an understanding with profit-seeking armies: you come here to profit, help me get listed, and I will airdrop to you later, and we will share the profits. But now, CEX listings no longer look at on-chain data and users because everyone knows that this data is heavily inflated,” Master Brother from Australia said on Twitter.

The logic of business is ruthless. As the on-chain data bubble becomes more severe and the selling pressure from profit-seekers negatively impacts the price trends of many projects, Monad’s choice has its rationale. However, this will not become the choice for most projects because Monad, as a capital-intensive public chain project, still has many cards to play, and its technical strength and potential explosive ecological applications could bring it a large number of community users. But for most projects, they essentially belong to marketing projects that must rely on airdrops to attract attention and market heat.

In the long run, airdrops remain one of the important sources of value in the crypto industry, but the logic and targets of airdrops are undergoing profound changes. “The results of the Monad airdrop basically announce the collapse of the logic surrounding the interactive profit-seeking race on the testnet. In the future, it is highly likely that no one will brush the testnet anymore,” Master Brother from Australia said.

In fact, many KOLs, including Master Brother from Australia, Ice Frog, and Chasing Wind, had anticipated this “table-turning” move by Monad, clearly stating early on that they did not participate in the interaction with Monad. It is understood that top KOLs are directing more energy towards “mouth profits,” arbitrage, and more diverse markets, while also focusing on high-quality projects like Polymarket to create premium accounts.

Additionally, multiple interviewed studios have stated that their profits are lower than last year and also below expectations. “The key is still to find areas where you have an advantage, whether it’s low labor costs, advanced technology, keen investment research to discover early projects, or influential KOLs to generate mouth profits. It is quite difficult to achieve relatively substantial profits by simply following the crowd,” A Du said.

With the market capitalization of top projects like Monad significantly lower than market expectations, and many projects locking user airdrop shares for extended periods after TGE, the status of profit-seekers in the project team’s interest distribution ecosystem has continuously declined, and the value of tokens in hand has continued to shrink. The logic of winning by volume for profit-seekers is becoming increasingly unsustainable.

“Therefore, the era when novice retail investors could enter the primary market for cheap dividends by providing labor is indeed over. The door has actually been closing for a long time, and Monad’s airdrop is just shutting the last gap,” Master Brother from Australia lamented.