Ethereum News Today: Hayes Slams Monad as "VC Dump Scheme," Warns of 99% Collapse Risk

Arthur Hayes, co-founder of BitMEX, has cast a critical eye on Monad, a newly launched layer-1 blockchain, warning that its high fully diluted valuation (FDV) and limited circulating supply create a volatile environment for retail investors. Hayes labeled the project a "VC dump scheme," arguing that its structure favors venture capital backers and founders while exposing ordinary traders to sharp price swings. Despite briefly buying into MON, the token's native currency, Hayes later exited his position, calling it a "high FDV, low-float useless L1" and predicting a potential 99% collapse. His remarks have reignited debates about the sustainability of high-valuation crypto projects in a market still grappling with liquidity challenges.

Monad's token, MON, has seen significant price swings since its launch. The asset surged to $0.045 shortly after a public sale and airdrop, a 68% increase from its initial offering price of $0.025. However, Hayes noted that such rapid gains often precede steep declines, particularly when insider tokens unlock and early investors offload holdings. The project's circulating supply remains low, with only 10% of all MON tokens in circulation, exacerbating volatility. While some traders profited from the airdrop-such as a user who sold tokens at $0.031 for a $238 gain-others criticized the team for insufficient community engagement as reported.

The blockchain itself positions itself as a high-performance competitor to Ethereum and Solana, boasting 10,000 transactions per second (TPS) and 0.8-second finality. Backed by $225 million in funding led by Paradigm and Coinbase Ventures, Monad aims to combine Ethereum's smart contract ecosystem with Solana's speed. Yet Hayes dismissed its technical merits, arguing that the project lacks the fundamentals to rival established networks. "It has no chance against Ethereum-not even Solana," he stated, emphasizing token economics over infrastructure.

The market's mixed response to MON underscores the risks of high-FDV launches. While the token initially attracted $269 million in commitments during its Coinbase sale, volatility has persisted. Trading volume spiked to $400 million on South Korean exchange Upbit and $233 million on Coinbase, but prices have since retreated to around $0.035, down 4.16% in 24 hours. Hayes' abrupt reversal-from bullish to bearish-highlighted the unpredictable nature of such assets. After purchasing MON at $0.045, he sold hours later, sharing a chart of its decline and quipping, "I'm out. Send this dogshit to ZERO" as reported.

Hayes' broader market outlook remains bullish, though he emphasized that only a handful of projects will endure the next cycle. He cited Bitcoin, Ethereum, Solana, and privacy-focused Zcash as likely survivors, predicting renewed liquidity expansion from U.S. and Chinese monetary policies. Privacy coins, he argued, will gain traction as institutions seek secure, decentralized solutions. Meanwhile, Monad's future hinges on overcoming structural weaknesses and proving its utility beyond speculative hype.