English EduSeries: Global Edition #4

Monad ($MON) — Promising Parallel Innovation, Yet the Shadow of Dilution Still Looms
$MON
Monad has finally landed on exchanges as one of the most anticipated projects. With its "EVM on Steroids" narrative, the project carries high expectations for the future of blockchain scalability. However, now that the initial hype has settled, it's important for us to cool our heads and analyze the fundamental data behind the curtain.

Technical Innovation Worth Examining

Monad's main selling point lies in its technical foundation. In the Parallel EVM space, Monad attempts to solve Ethereum's classic problem: sequential transaction execution—like a single queue prone to congestion. By redesigning the lowest layers, from the consensus mechanism to the database (MonadDB), Monad enables thousands of transactions to be processed in parallel simultaneously. The result is a claimed theoretical throughput of up to 10,000 transactions per second (TPS) with finality under 1 second. For developers, this is a solid proposition: porting applications from Ethereum to Monad requires no significant code rewriting.

Tokenomics: Between Valuation and Reality

While the technology is ambitious, investment analysis is often determined more by supply structure. Let's look at the numbers as of today:

Live Price
Trading around $0.0309

Circulating Supply
Approximately 11.82 billion MON, or about 11.83% of the total planned supply

Market Cap
~ $365 million

Fully Diluted Valuation (FDV)
Surpasses $3 billion

Note
This FDV is higher than at the Coinbase listing price of $0.025 per token, which reflected an FDV of $2.5 billion

The fact that the current market cap has only reached $365 million while the FDV already exceeds $3 billion signals a significant mismatch. In other words, the market is already pricing Monad fully at a very high valuation—comparable to the valuation of highly mature layer-1 protocols—despite over 88% of its supply still being locked.

Who holds that locked supply? The distribution includes 27% for the team, 19.7% for early investors, and 38.5% for ecosystem development. The vesting schedule for these allocations is set to begin gradually in the second half of 2026, with the next significant unlocks in November.

This is a classic picture of dilution overhang. As retail investors, we are essentially buying tokens at a price that already factors in the project's full success, while waiting for 88% of additional supply that could potentially depress prices when unlocks occur.

The On-Chain Metrics Paradox: Between TVL and Real Activity

Interestingly, amid this valuation discussion, Monad's Total Value Locked (TVL) metric shows quite impressive performance. Within approximately four months of its November 2025 mainnet launch, Monad's TVL managed to surpass $355 million. This makes it one of the fastest-growing layer-1s by TVL in recent years.

However, if we dig deeper, an anomaly worth watching emerges: extremely low daily transaction fees. On-chain data shows that Monad's average fee revenue is under $3,000 per day.

Consider the contrast: TVL reaches $355 million, yet annual fee revenue may not even reach $1 million. This results in a very low fee-to-TVL ratio. This indication often points to one conclusion: the majority of capital parked in Monad's ecosystem at present is most likely mercenary capital—funds entering to chase token incentives or yield farming, not because of strong organic utility and demand for the network's block space.

Summary for Investors

Monad fundamentally offers an architectural breakthrough that could attract many developers and liquidity going forward.

However, investing at this stage requires strong conviction that ecosystem growth (real demand) will be able to outpace the incoming supply inflation. The market is already pricing a premium for that potential. If the dApp ecosystem and on-chain activity do not grow exponentially to offset the aggressive unlock schedule, selling pressure from the team and investors could become a stronger headwind than the technology narrative itself.

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