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, briefly falling below the cost basis for public sale participants. Currently, the FDV remains in the $3 billion to $3.5 billion range, which is not only lower than the $8 billion mainstream market cap on Polymarket but also far below the $15 billion valuation of the early Pre-TGE market.

This not only delivers a heavy blow to the Layer 1 narrative but also marks a “tragedy” for the “whale farming” community.

Previously, Monad was valued at $3 billion, making it the highest-valued unissued Layer 1 token in the market, and was highly anticipated by whale farmers. 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 among whale farmers is that “sunshine and rain” are common practices for many projects. As long as they maintain frequent interactions, they can potentially earn a few dollars to dozens of dollars in token rewards. The accumulated value across multiple addresses can still be significant. However, Monad’s official stance did not align with the whale farmers’ expectations, excluding all testnet addresses from the airdrop.

A杭州 whale farming studio head, A Du (pseudonym), told ChainCatcher, “All testnet interaction addresses are anti-farmed, 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.”

For a time, Monad became the target of fierce criticism from many whale farmers, but Monad’s official stance remained unchanged. According to well-known KOL Fengmi, the approach of this airdrop was to bind contributors, identity holders, and potential users to Monad—focusing on identity and 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 history but because he served as a moderator in the Monad community for three years and established the Monad Chinese community. Monad’s official 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 the project’s value for community users; on the other hand, to incentivize active participants and influencers in the surrounding ecosystem, attracting them into their 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.

During this period, the standards for airdrops have continuously forked and evolved. Some projects emphasize fairness and generosity, being quite accommodating to whale farmers who participate in interactions. Others impose strict rules on testnet/mainnet interactions, implementing rigorous vetting based on a point system. This time, Monad completely abandoned testnet interaction users, or retail investors.

“If a network neglects retail investors 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 investors a gradual growth space, even if small, to truly turn more people into part of the MON network community.

Chasing the trend, whale farmers contribute not only fees, data, and traffic but also serve as effective promoters. Some believe these participants should be incentivized. “Monad’s approach is too thoughtless, shaking the trust foundation of the entire industry,” said Ice Frog on Twitter.

From the project perspective, long-term development needs should guide airdrop strategies. “Whale farmers 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 whale farmers as “parasites” in the crypto ecosystem.

Australian veteran Master Brother also believes the industry’s airdrop logic is changing. “In the past, CEXs focused 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 whale armies: you farm here, help me get listed, and I’ll airdrop to you. But now, CEX listings no longer consider on-chain data or user metrics because everyone knows these numbers are heavily inflated,” he tweeted.

Business logic is ruthless. As on-chain data bubbles grow and whale farmers’ selling pressure negatively impacts token prices, Monad’s approach is reasonable. However, this will likely not 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 explosion could bring a large community of users. But for most projects, which are essentially marketing efforts, 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 essentially mark the collapse of the testnet whale farming race. In the future, testnet farming will probably disappear,” said Master Brother.

In fact, many KOLs anticipated this “table-flip” by Monad. Early on, influencers like Master Brother, Ice Frog, and Fengmi openly stated they did not participate in Monad interactions. It is understood that top KOLs will focus more on “mouth farming,” 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 are now 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 farming. Simply following the crowd to farm tokens is no longer highly profitable,” said A Du.

As the market capitalization of top projects like Monad significantly falls below expectations, and many projects lock user airdrop shares for extended periods post-TGE, whale farmers’ position in the project ecosystem continues to decline, with token values shrinking. The whale farming logic based on volume is becoming unsustainable.

“So, retail investors relying on labor to enter the primary market for cheap gains have already lost their window. The door has been closing for a long time; Monad’s airdrop just sealed the last crack,” sighed Master Brother.