The Mao Party Fails Monad: "The logic of the testnet Mao Mao race has collapsed"

Author: Hu Tao, ChainCatcher

Yesterday, the highly anticipated Layer1 public chain Monad’s token MON officially launched. It once fell below the cost basis for public sale users. Currently, the FDV remains in the $3 billion to $3.5 billion range, which is not only below the mainstream prediction market cap of $8 billion on Polymarket but also far below the early Pre-TGE market valuation of $15 billion.

This is not only a heavy blow to the Layer1 narrative but also a “tragic” milestone for the “grind” community.

Previously, Monad, with a valuation of $3 billion, became the highest-valued unlaunched Layer1 in the market. It was highly anticipated by the grind community, with its testnet accumulating over 300 million interaction addresses. Many studios are using millions of addresses to register Monad addresses. At the end of October, Monad officially opened the airdrop query, but unexpectedly excluded all testnet interaction addresses from the airdrop scope.

The logic of the grind community is that “sunshine always shines,” which is a common practice among many project teams. As long as there are frequent interactions, users can potentially 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 response did not align with the expectations of the large grind community, excluding all testnet addresses from the airdrop.

“All testnet interaction addresses are anti-grind, 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,” said A Du (pseudonym), head of a grind studio in Hangzhou, to ChainCatcher.

For a time, Monad became the target of fierce criticism from many grind users, 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.

Famous alpha blogger Spark received a reward of 3 million MON 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 considers this a substantial contribution, which is also a key criterion for airdrops by 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 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 continued to diverge and evolve. Some projects emphasize fairness and generosity, being quite accommodating to grind participants, while others impose strict rules on testnet/mainnet interactions, implementing rigorous “witch-hunt” screening based on points. This time, Monad completely abandoned testnet users or retail investors.

“If a network neglects retail investors for a long time, it will make the network overly elite in its early stages, losing a broad community foundation. 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,” Fengmi said on X. He believes Monad should give grassroots retail investors a space to grow gradually, even if just a little, so more people can truly become part of the MON network community.

Zhuifeng believes that grind participants contribute not only fees, data, and traffic to project teams but also serve as effective publicity. He personally thinks these participants should be incentivized. “Monad’s approach is really thoughtless, shaking the trust foundation of the entire industry,” said Bingwa on Twitter.

From the project perspective, they need to formulate airdrop strategies based on long-term development needs. “Grind participants lack loyalty; they sell immediately after receiving airdrops and move on to the next project to grind. For projects, this only causes selling pressure without long-term benefits. Is it necessary to give them tokens?” said an anonymous KOL, describing grind community members as “parasites” in the crypto ecosystem.

Australian senior brother also believes that the industry’s airdrop logic is changing. “In the past, when CEXs evaluated a project’s fundamentals, they paid close attention to on-chain data activity and active user metrics. During cold starts, projects needed popularity. For a long time, project teams tacitly or explicitly reached an understanding with grind armies: you come grind for me, help me get listed, and I will give you airdrops in return. But now, CEX listings no longer look at on-chain data or user metrics because everyone knows these data are heavily inflated,” he tweeted.

The business logic is ruthless. As on-chain data bubbles grow more severe and grind community selling pressure negatively impacts token prices, Monad’s approach is reasonable. However, this will not be the choice for most projects because Monad, as a capital-heavy public chain project, still has many cards to play. Its technical strength and potential explosive power in ecosystem applications could bring it a large community of users. But for most projects, they are essentially marketing projects that must rely on airdrops to attract attention and market hype.

In the long run, airdrops remain one of the important sources of value in the crypto industry, but their logic and targets are undergoing profound changes. “The results of the Monad airdrop basically mark the collapse of the testnet grind race logic. In the future, testnets are unlikely to be grinded again,” said Australian senior brother.

In fact, many KOLs predicted this “table-flip” by Monad. Senior brothers like Fengmi, Bingwa, and Zhuifeng have long publicly stated they did not participate in Monad interactions. It is understood that top KOLs will focus more on “mouth-grinding,” arbitrage, and other diverse markets, while also concentrating on high-quality projects like Polymarket to create premium accounts.

Additionally, multiple studios interviewed said their earnings are lower than last year and below expectations. “The key is to find areas where you have advantages, such as low labor costs, advanced technology, early project discovery through sharp research, or influential KOLs for mouth-grinding. It’s becoming harder to just follow the crowd and grind for substantial gains,” A Du said.

As the market capitalization of top projects like Monad significantly falls below expectations, and many projects lock user airdrop shares for long periods after TGE, grind community members’ positions in project benefit distribution ecosystems continue to decline, with token values shrinking. The grind logic based on volume is no longer sustainable.

“So, the era of retail investors entering the primary market for cheap dividends through labor is truly over. The door has already been closing for a long time; Monad’s airdrop just sealed the last crack,” lamented Australian senior brother.