The chill in the air is palpable. The Crypto Fear and Greed Index is flashing red, signaling extreme fear. Even institutional investors are hitting the brakes, with Crypto ETF outflows on the rise. Launching a new token into this environment is akin to launching a ship into a hurricane.
Historically, companies often postpone IPOs when the broader stock market is under pressure. The logic is simple: why risk launching when investor sentiment is low and valuations are depressed? Monad is betting it can buck this trend, but the odds are stacked against it.
Unfortunately for Monad, history isn’t on its side. Recent token launches have often been followed by significant price drops. Remember Keeta, another project promising lightning-fast speeds and EVM compatibility? Its price has crashed to $0.30, down a staggering 85% from its post-airdrop high.
And it’s not just Keeta. World Liberty Financial (WLFI) token is down 54% from its peak, and Somnia has erased millions in value after initially surging. These examples highlight a worrying trend: the post-airdrop pump is often followed by a painful dump.
Why the Crash?
Several factors contribute to this phenomenon. Early investors and insiders often take profits immediately after the token launch, flooding the market with supply and driving down the price. Furthermore, the crypto space is becoming increasingly crowded with layer-1 and layer-2 solutions, making it difficult for any single project to stand out.
Despite the proliferation of new blockchains, Ethereum continues to dominate the landscape, maintaining a substantial market share across various sectors. Beating Ethereum is a tall order.
Another red flag for Monad is its token distribution. A significant portion of the MON tokens are allocated to insiders, raising concerns about potential manipulation and lack of decentralization. According to its tokenomics, the team receives 27% of the allocation, while investors get 20%, and Category Labs Treasury (controlled by insiders) receives 4%.
That leaves a mere 7.5% for the public airdrop. Projects with such a high concentration of tokens held by insiders often struggle to maintain long-term price stability. Just look at the Trump Meme Coin and WLFI token – both examples of airdrops with concentrated insider ownership that didn’t end well for retail investors.
The Monad mainnet launch is undoubtedly a significant event, but the project faces considerable headwinds. The confluence of a broader market downturn, the historical performance of recent token launches, and a token distribution skewed towards insiders paints a concerning picture. Whether Monad can overcome these challenges remains to be seen, but investors should proceed with caution. This could be a case of “buy the rumor, sell the news” on steroids.
