Rug-pull hunters hit a dead end—Monad: “The logic behind the testnet rug-pull arbitrage race has collapsed.”

Author: Hu Tao, ChainCatcher

Yesterday, the highly anticipated Layer 1 public chain Monad token MON officially launched. It once even dipped below the public-sale users’ cost basis. As of now, FDV still hovers in the $3–$3.5 billion range. This is not only lower than the $8 billion mainstream market cap predicted on Polymarket, but also far below the $15 billion valuation of the earliest Pre-TGE market.

This is not only a hard blow to the Layer 1 narrative, but also a “tragic” milestone for the mercenary air-drop (grab-and-moo) crowd.

Previously, Monad—valued at $3 billion—became the highest-valued unissued Layer 1 in the market, raising strong expectations among the grab-and-moo community. Its testnet cumulative interaction addresses exceeded 300 million. Many studios used millions of addresses to register Monad addresses. At the end of October, Monad officially opened airdrop claim queries, but unexpectedly excluded all testnet interaction addresses from the airdrop scope.

The logic of the grab-and-moo crowd is that “sunshine is for everyone,” which is a common practice for many project teams. As long as they maintain a relatively high frequency of interactions, they may obtain token rewards ranging from a few dollars to dozens of dollars. Even when tokens are accumulated across multiple addresses, the total value can still be significant. However, Monad’s official team did not deliver what the huge grab-and-moo crowd hoped for; it excluded all testnet addresses from the airdrop scope.

“Every single testnet interaction address is anti-mooed, and participating in all kinds of NFTs basically has no use. The only ones getting the Monad airdrop are some old addresses that never interacted with Monad, but traded on Hyperliquid,” said A Du (a pseudonym), head of a grab-and-moo studio in Hangzhou, to ChainCatcher.

For a time, Monad became the target of fierce attacks by a large number of grab-and-moo users, but Modad’s official team remained unmoved. In the view of well-known KOL Fengmi, Monad’s approach this time was to bundle people who had made contributions, had an identity, and had potential into Monad—building around identity plus contribution. For example: Monad ecosystem developers, heavy DeFi users, high-quality NFT holders, and so on.

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 history, but because he served as a Mod for the Monad community for 3 years and established a Monad Chinese community. This was considered by Monad’s official team to be a meaningful, substantive contribution—also the kind of target that most project teams air-drop to.

For project teams, the significance of airdrops is twofold. On one hand, they reward long-term supporters and demonstrate the project’s importance to community users. On the other hand, they reward active participants and influencers in the surrounding ecosystem, using the token incentives to attract them into the project’s own ecosystem. From the earliest Uniswap to later projects like Gitcoin, Arbitrum, Scroll, Berachain, Aster, and thousands of other initiatives, airdrops have long been regarded as a must-have route for attracting users.

During this period, airdrop standards have also been continuously branching and evolving. Some projects emphasize everyone gets a fair share—happy for all—and are generous toward grab-and-moo participants. Some projects, however, set strict rules for testnet/mainnet interactions, and carry out rigorous “witch” filtering based on a scoring system. But this time, Monad completely abandoned users who only interacted on the testnet—put another way, retail participants.

“If a network ignores retail investors for a long time, it will make the network too ‘elite’ at an early stage and lose a broad base of community people. In the early days of Bitcoin, Ethereum, Solana, and Bsc, it was a group of seemingly insignificant small retail investors. They brought network effects and community vitality,” Fengmi said on X. He believes Monad should give grassroots retail investors a space to grow gradually—any amount, even a little—so that more people can truly become part of the MON network’s community.

Zhuifeng believes that the grab-and-moo crowd provides projects not only with transaction fees, data, and traffic, but also with good publicity effects. “In my view, those people need to be given some incentives.” Monad’s handling, however, was “too inconsiderate,” and what it undermines is the entire industry’s trust foundation. “Bingwa is also saying so on Twitter.

But from the project’s perspective, they need to develop an airdrop strategy starting from the project’s long-term development needs. “Grab-and-moo people have no loyalty. Once they receive an airdrop, they sell, then run to the next project to grab-and-moo again. For projects, that only creates sell pressure and no long-term benefit. Is it necessary to send tokens to them?” An anonymous KOL described grab-and-moo as “parasites” in the crypto ecosystem.

Dramatically, Australian master brother also believes the industry’s airdrop logic is changing. “In the past, when CEXs examined a project’s fundamentals, they paid a lot of attention to how lively the on-chain data was and the active user metrics. During cold starts, projects need momentum and people. So for a long time, project teams tacitly permitted it, even reached an understanding with the grab-and-moo army: you come grab-and-moo here, help me get listed on major exchanges, and I’ll give you airdrops in return—everyone shares the profits. But now, CEX listings no longer look at on-chain data and users, because everyone knows these numbers are heavily inflated,” Australian master brother wrote on Twitter.

Business logic is cold. As on-chain data bubbles become ever more severe, and the sell pressure from the grab-and-moo crowd brings negative effects to many projects’ token price trends, Monad’s choice has its rationale. But it is certain that this will not become the choice for most projects. Monad is a public chain project with capital re-commitment, and it still has many moves it can make. Its technical strength and potential for an explosive wave of ecosystem applications could bring it a large number of community users. However, for most projects, they are essentially marketing-focused projects, and they must use airdrops to win attention and market hype.

In the long run, airdrops are still one of the important value sources in the crypto industry, but the logic and targets of airdrops are undergoing profound changes. “Monad’s airdrop results basically declare the collapse of the testnet slave-interaction grab-and-moo track. In the future, it’s very likely that no one will keep刷ing testnets anymore,” Australian master brother said.

In fact, many KOLs had already anticipated Monad’s “flip the table” move. Like Australian master brother, Bingwa, Zhuifeng, and many other KOLs, they stated early on that they would not participate in Monad interactions. It’s understood that top KOLs will devote more effort to “mouth grab-and-moo,” arbitrage, and other more diverse market activities, while also focusing on curating quality projects such as Polymarket to build premium accounts.

In addition, multiple interviewed studios also said their earnings were not as good as last year, and not as expected. “The key is to find areas where we have advantages—whether that’s low labor costs, advanced technology, advanced investment research that can spot early projects, or influential KOLs for mouth grab-and-moo. It’s becoming quite difficult to achieve fairly substantial returns just by following the crowd and grabbing-and-moo opportunistically,” A Du said.

As the market capitalization of first-tier projects such as Monad falls far below market expectations—and even many projects lock the user portions of their airdrops for longer periods after TGE—the grab-and-moo crowd’s position in the project’s benefit distribution ecosystem keeps declining further and further, and the value of the tokens they receive continues to shrink. The grab-and-moo logic of “winning by volume” is already hard to sustain.

“So, the time for new retail investors to rely on providing labor to enter the primary market and enjoy cheap-dividend windfalls has really ended. The door has long been closing—Monad’s airdrop just shut the last thread of a gap,” Australian master brother lamented.