Hayes Warns Monad's High FDV, Low-Float Design Could Lose 99% of Value

Arthur Hayes, the former BitMEX CEO and crypto market commentator, has issued a dire warning about Monad, a newly launched layer-1 blockchain, predicting it could lose up to 99% of its value as speculative hype fades. The altcoin, which rallied 30% in the week following its November 24 mainnet launch, has drawn scrutiny for its token design, which Hayes describes as a high FDV, low-float VC coin. The project, backed by a $225 million funding round led by Paradigm, has a fully diluted valuation (FDV) of $4.09 billion against a circulating supply of just 10.83 million tokens, creating a structure where small capital inflows or influencer sentiment can trigger extreme price swings. Hayes emphasized that such models often lead to short-lived price spikes, followed by steep declines as insiders unlock tokens and offload them.

The warning comes amid a volatile market for MON, the native token of Monad. Despite a 40% rally post-launch, the token has since retreated to $0.035, with analysts like Altcoin Sherpa advising holders to prepare for further declines. Hayes' skepticism extends to the broader layer-1 ecosystem, where he argues only a handful of protocols-Bitcoin, Ethereum, Solana, and Zcash-will survive future market cycles according to his analysis. His critique of Monad's token economics aligns with his broader criticism of low-float, high-FDV projects, which he views as structurally vulnerable to liquidity-driven collapses.

Monad founder Keone Hon responded to Hayes' remarks by highlighting the project's unique innovations, including its hybrid execution model and partnerships with platforms like Wormhole and Axelar for cross-chain interoperability. Hon invited Hayes to engage more deeply with the network, offering to provide MON tokens for firsthand experience. However, Hayes' recent actions have drawn attention: he publicly bought MON tokens, triggering a 30% intraday rally, only to reverse his position hours later, calling the asset "dogshit" and urging followers to "send it to zero". This abrupt reversal underscored the risks of influencer-driven volatility in low-liquidity markets and reignited debates about the sustainability of projects built on speculative token structures.

Despite his bearish stance on Monad, Hayes remains optimistic about the broader crypto market. He attributes the next bull cycle to global liquidity expansion rather than Bitcoin's halving schedule, citing synchronized credit growth in the U.S. and China as key drivers. He also highlighted the potential for privacy coins like Zcash to resurge as regulatory pressures mount, positioning them as a critical narrative for the next phase of adoption.

The MON token's immediate future remains uncertain, with structural selling pressure anticipated as early investors unlock tokens. Its 24-hour trading volume of $651 million against a limited circulating supply creates conditions where large trades or influential voices can disproportionately impact price movements. As the market grapples with these dynamics, Hayes' comments reinforce a broader industry skepticism toward layer-1 projects lacking clear use cases or durable adoption.