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

Author: Hu Tao, ChainCatcher

Yesterday, Monad’s Layer1 blockchain token MON, which the market has been watching closely, was officially listed. It briefly fell below the public-sale users’ cost basis. At present, FDV is still hovering in the $3.0–$3.5 billion range. This is not only lower than Polymarket’s mainstream predicted market cap of $8.0 billion, but also far below the $15 billion valuation of the earliest Pre-TGE market.

And this isn’t just a blow to the Layer1 narrative—it’s also a “tragic milestone” for the airdrop-harvesting crowd.

Earlier, Monad was valued at $3 billion, making it the highest-valued unissued-token Layer1 in the market. The airdrop-harvesting crowd had high hopes for it. Its testnet cumulative interactive addresses exceeded 300 million. Many studios were using hundreds of thousands of addresses to register Monad addresses. In late October, Monad officially opened an airdrop lookup, but unexpectedly, it excluded all testnet interaction addresses from the airdrop.

The logic of the airdrop-harvesting crowd is that “sunshine for everyone” is a common approach for many project teams. As long as interactions are kept at a relatively high frequency, one might still receive token rewards ranging from a few dollars to several tens of dollars; even after aggregating across many addresses, the total token value can remain considerable. However, the Monad team did not take the move that the massive airdrop-harvesting crowd had hoped for—excluding all testnet addresses from the airdrop.

“All testnet interaction addresses are basically counter-airdropped, and participating in all sorts of NFTs also has basically no use. The only ones getting Monad airdrops are some old addresses that have never interacted with Monad, but have traded on Hyperliquid.” Adao (a pseudonym), the person in charge of a Hangzhou airdrop-harvesting studio, told ChainCatcher.

For a moment, Monad became a target of intense condemnation by a large number of airdrop-harvesting users. But Modad’s official position did not budge. In the view of the well-known KOL Feng Mi, the rationale behind Monad’s airdrop this time was to bundle people with contributions, identity, and potential into Monad—building around identity + contributions, such as Monad ecosystem developers, heavy DeFi users, high-quality NFT holders, and so on.

Well-known alpha blogger spark received rewards of 3 million MON in this airdrop, worth about $110,000. This is not because of his interaction history, but because he served as a Mod of the Monad community for 3 years and helped build a Chinese-language Monad community. Monad’s official team considers this a form of tangible contribution, and this is also the target object for airdrops by most projects.

For project teams, the meaning of an airdrop is twofold. On the one hand, it rewards long-term supporters of the project, demonstrating that they value community users. On the other hand, it rewards active participants and influential figures in the surrounding ecosystem. By using the airdrop rewards to draw them into the project’s own ecosystem, teams can attract users to it. From the earliest Uniswap to thousands of projects afterward—Gitcoin, Arbitrum, Scroll, Berachain, Aster, and more—airdrops have been regarded as the must-have road for project teams to attract users.

During this period, airdrop standards have also continuously branched out and evolved. Some projects emphasize “equal rain and dew for everyone,” spreading benefits widely and giving the airdrop-harvesting crowd that participated in interactions quite generously. Other projects set strict rules for interactions on testnets/mainnets, conducting rigorous Sybil filtering based on a points system. And this time, Monad completely abandoned testnet-interaction users—or, in other words, retail users.

“If a network has long ignored retail users, it will make the network overly elitist early on and lose the broad base of community people. In Bitcoin, Ethereum, Solana, Bsc’s early days, what they relied on was a batch of small retail users that seemed seemingly insignificant. They brought network effects and community vitality.” Feng Mi said on X. He believes Monad should give grassroots retail users space to grow gradually; even if it’s only a little bit, it can enable more people to truly become part of the MON network’s community.

Chasing the Wind believes that the airdrop-harvesting people give project teams not only transaction fees, data, and traffic, but also play a very good promotional role. “Personally, I think it’s necessary to give these people some incentive.” Monad’s actions are simply too inconsiderate—shaking the foundation of trust in the entire industry. “Ice Frog also said on Twitter.

But from the perspective of the project team, they need to formulate their airdrop strategy starting from the needs of the project’s long-term development. “The airdrop-harvesting people have no loyalty. Once they receive the airdrop, they will sell, and then run to the next project team to airdrop-harvest. For the project, this only causes sell pressure, with no long-term benefit. Is it necessary to send an airdrop to them?” An anonymous KOL described it, saying the airdrop-harvesting crowd is like “parasites” in the crypto ecosystem.

The land down under senior brother also believes that the industry’s airdrop logic is changing. “Back when CEXs evaluated a project’s fundamentals, they put a lot of emphasis on how lively on-chain data looked and on active user metrics. In the cold-start phase, project teams need some hype. So for a long period of time, project teams tacitly allowed it or even reached an understanding with the airdrop-harvesting army: you come to my place to airdrop-harvest and help boost activity, and I’ll give you an airdrop later—everyone splits the cut together. But nowadays, CEX Listings no longer look at on-chain data and user metrics, because everyone knows these data are severely inflated.” The land down under senior brother said in a post on Twitter.

Business logic is ruthless. After on-chain data bubbles become increasingly severe and the sell pressure from the airdrop-harvesting crowd brings negative effects to many projects’ token price trajectories, Monad’s choice has its reasonableness. But this is destined not to be the choice of most projects, because as a capital-backed re-investment public-chain project, Monad still has many cards to play. Its technical strength and the potential explosive power of its ecosystem applications could bring it large numbers of community users. However, for most projects, they essentially are marketing-driven projects, and they have to use airdrops to win attention and market buzz.

In the long run, airdrops are still one of the important sources of value in the crypto industry. But the logic and targets of airdrops are undergoing profound changes. “Monad’s airdrop outcome has basically declared the collapse of the testnet ‘black slave’ interaction airdrop-harvesting track logic. In the future, it’s likely that no one will spam the testnet anymore.” The land down under senior brother said.

In fact, this “flipping the table” move by Monad had already been anticipated by many KOLs. KOLs such as the land down under senior brother, Ice Frog, and Chasing the Wind—many KOLs had already been publicly clear early on that they did not participate in interacting with Monad. It’s understood that top KOLs will devote more effort to “talk-only engagement,” arbitrage, and other more diverse market activities. At the same time, they will also focus on carefully selected high-quality projects such as Polymarket to concentrate on building premium channels.

In addition, multiple interviewed studios said their returns were worse than last year and also below expectations. “The key is still to find areas where you have advantages—either low labor cost, advanced technology, sharp investment research that can spot early projects, or influential KOLs who can do talk-only engagement. It’s much harder to get relatively rich returns by simply following the crowd and doing airdrop-harvesting in a pretty ordinary way,” Adao said.

As the market caps of first-tier projects like Monad have fallen far below market expectations, and even many projects lock user airdrop allocations for a long time after TGE, the airdrop-harvesting crowd’s position in the project teams’ interest distribution ecosystem continues to decline. The value of the tokens they receive keeps shrinking. The airdrop-harvesting logic of winning by volume can no longer be sustained.

“So, the little white retail users who relied on providing labor to enter the primary market and capture cheap opportunity—the cheap-rent bonus period—has indeed already ended. The door was already closing a long time ago, and Monad’s airdrop just closes the last tiny gap.” The land down under senior brother lamented.