The fur-pulling party failed: Monad: "The logic of the testnet fur-pulling track has collapsed."

Author: Hu Tao, ChainCatcher

Yesterday, the Layer1 public chain Monad's token MON officially launched, briefly falling below the public offering user cost price. Currently, the FDV still hovers in the range of $3-3.5 billion, which is not only lower than the mainstream predicted 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 "tragedy" for the profit-seeking community.

Previously, Monad became the highest-valued unlaunched Layer1 in the market with a valuation of $3 billion, and the profit-seeking community had high hopes for it. Its testnet accumulated over 300 million interactive addresses, with many studios using millions of addresses to register Monad addresses. At the end of October, Monad officially opened airdrop queries but unexpectedly excluded all testnet interactive addresses from the airdrop scope.

The logic of the profit-seeking community is that "sunshine is the usual practice of many project parties." As long as they maintain a high frequency of interaction, they may receive token rewards ranging from a few dollars to several tens of dollars. The cumulative token value from multiple addresses remains considerable. However, Monad's official team did not respond as the large profit-seeking community wished, excluding all testnet addresses from the airdrop.

"All testnet interactive addresses are completely excluded from the airdrop, and participating in various NFTs is basically useless. The only ones who received the Monad airdrop were some old addresses that had never interacted with Monad but had traded on Hyperliquid," said Adu (pseudonym), head of a profit-seeking studio in Hangzhou, to ChainCatcher.

In an instant, Monad became the target of intense criticism from many profit-seeking users, but the Monad official team remained unmoved. According to well-known KOL Feng Mi, Monad's airdrop strategy aims to bundle contributors, identities, and potential individuals into Monad, focusing on identity + contribution, such as Monad ecosystem developers, heavy DeFi users, and quality NFT holders.

Famous 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 moderator for the Monad community for three years and established the Monad Chinese community. This was considered a substantial contribution by the Monad official team, which is also a key target for most project airdrops.

For project parties, the significance of airdrops lies in rewarding long-term supporters of the project, reflecting their emphasis on community users, while also rewarding active participants and influencers in the surrounding ecosystem, using airdrop rewards to attract them into their ecosystem. From the earliest Uniswap to subsequent projects like Gitcoin, Arbitrum, Scroll, Berachain, Aster, and thousands of others, airdrops have been seen as a necessary path for project parties to attract users.

During this period, the standards for airdrops have continuously diverged and evolved. Some projects emphasize equal distribution and generosity towards participating profit-seekers, while others set strict rules for testnet/mainnet interactions, implementing rigorous witch hunts based on a points system. This time, Monad completely abandoned testnet interactive users, or rather, 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. Bitcoin, Ethereum, Solana, and BSC all relied on a group of seemingly insignificant small retail investors in their early days, who brought network effects and community vitality," Feng Mi stated on X. He believes Monad should provide grassroots retail investors with a space to grow gradually, even if just a little, allowing more people to truly become part of the MON network community.

Chasing Wind believes that profit-seekers contribute not only transaction fees, data, and traffic to project parties but also play a significant promotional role. "Monad's operation is indeed too thoughtless, shaking the trust foundation of the entire industry," Ice Frog also stated on Twitter.

However, from the project party's perspective, they need to formulate airdrop strategies based on the long-term development needs of the project. "Profit-seekers have no loyalty; they will sell off once they receive airdrops and then run to the next project to profit. For projects, this only creates selling pressure without long-term benefits. Is it necessary to issue airdrops to them?" An anonymous KOL described profit-seekers as "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 CEX assessed a project's fundamentals, they paid great attention to the activity level of on-chain data and active user metrics. Project parties needed popularity during cold starts. For a long time, project parties tacitly allowed or even reached an agreement with profit-seeking armies: you come here to profit, help me get listed, and I will airdrop to you later, sharing the rewards. But now, CEX listings no longer look at on-chain data and users because everyone knows these data are heavily inflated," Master Brother from Australia stated on Twitter.

The logic of business is ruthless. As the on-chain data bubble becomes increasingly severe and the selling pressure from profit-seekers negatively impacts the price trends of many projects, Monad's choice is reasonable. However, this is destined not to be the choice of most projects because Monad, as a heavily capital-backed public chain project, still has many cards to play. Its technical strength and potential explosive power of ecological applications could bring it a large number of community users. But for most projects, they essentially belong to the marketing category and 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 of testnet black slave interactive profit-seeking tracks. In the future, it is highly likely that no one will brush the testnet anymore," Master Brother from Australia said.

In fact, many KOLs had anticipated Monad's "table-turning" move, with figures like Master Brother from Australia, Ice Frog, and Chasing Wind openly stating that they did not participate in Monad interactions early on. It is understood that top KOLs will focus more on "mouth profit," arbitrage, and other more diverse markets, while also concentrating on high-quality projects like Polymarket to focus on creating premium accounts.

Moreover, several interviewed studios have stated that their earnings are not as good as last year and do not meet expectations. "The key is still to find areas where you have advantages, whether it's low labor costs, advanced technology, or keen research capabilities to discover early projects, or influential KOLs to mouth profit. It's quite difficult to achieve substantial returns by simply following the crowd to profit-seek," Adu stated.

As the market capitalization of first-tier projects like Monad significantly falls below market expectations, and many projects lock user airdrop shares for extended periods after TGE, the status of profit-seekers in the project party's interest distribution ecosystem continues to decline, and the value of tokens received keeps shrinking. The logic of winning by volume has become increasingly unsustainable.

"So, the era when retail investors could enter the primary market to take advantage of cheap dividends by providing labor has indeed ended. The door has actually been closing for a long time; Monad's airdrop is just the final closure of the last gap," Master Brother from Australia lamented.