Zcash News Today: Hayes: Monad's VC Token a "Time Bomb" Awaits Unlocking

Arthur Hayes, the former CEO of BitMEX, has issued a stark warning about Monad, a newly launched layer-1 blockchain, predicting its native token, MON, could plummet by as much as 99%. The caution stems from the project's token structure, which Hayes labels a "high FDV, low-float VC coin"-a model he argues is inherently prone to volatility and collapse once early investor tokens unlock according to analysis. The former crypto exchange leader has become a vocal critic of projects relying on venture capital (VC) funding and speculative hype rather than real-world adoption, a category he places Monad in as reported by TradingView.

Monad's token, MON, surged 19% to $0.042 following a recent airdrop, but Hayes dismissed the rally as a short-lived "pump" driven by limited supply and VC-backed incentives. He emphasized that such projects often experience sharp corrections after initial price spikes, as insider tokens flood the market. The token's fully diluted value (FDV)-the market cap if all tokens were in circulation-far outstrips its current circulating supply, a structure Hayes says historically leads to bearish outcomes according to market analysis. "It's going to be another bear chain," he stated, noting that most new layer-1 networks fail to sustain relevance as the report notes.

Despite his skepticism about Monad, Hayes remains bullish on the broader crypto market, forecasting a new bull run fueled by global monetary expansion. He attributes past Bitcoin rallies not to halving cycles but to liquidity injections by governments, particularly the U.S. and China. With the Federal Reserve set to end quantitative tightening in December, Hayes anticipates increased liquidity that could drive risk-on assets higher according to financial analysis. He also highlighted privacy-focused technologies and zero-knowledge systems as potential growth areas, with Zcash (ZEC) holding a prominent spot in his family office's portfolio as cited in industry reports.

The warning comes as Monad faces scrutiny over its $225 million funding round led by Paradigm and its recent airdrop, which initially sent MON's price up 40%. However, Hayes' critique aligns with broader concerns about tokenomics in the crypto space, where high FDV projects often struggle to justify valuations without tangible utility. He reiterated that only a handful of layer-1 blockchains-Bitcoin, Ethereum, Solana, and Zcash-are likely to endure long-term as reported by multiple sources.

While the immediate future for MON remains uncertain, Hayes' comments underscore a growing debate about the sustainability of VC-backed blockchains. His call for caution contrasts with the optimism of some analysts who see potential in Monad's high-performance architecture. Nevertheless, the market will closely watch whether MON can maintain its gains amid skepticism from one of crypto's most prominent figures.