Recent remarks from Arthur Hayes have sounded a stark warning for investors in the newly launched blockchain project Monad. Hayes called Monad a “high-risk VC coin” and suggested its token — MON — could plunge as much as 99%, citing structural issues in its tokenomics and high fully diluted valuation (FDV).
🚨 What Hayes Says — Why He Sees Danger
Hayes criticized Monad for being structured like a typical VC-backed launch: at launch, the circulating supply is small while most tokens remain locked under insider or institutional control. That creates a scenario where initial hype can trigger a sharp price spike — but once those locked tokens unlock, the flood of supply can trigger a deep crash.
Describing Monad as a “high FDV, low-float VC coin,” Hayes argued that the fundamentals don’t support long-term sustainability. He called it “another bear chain,” warning retail investors that those who bought early could face steep losses.
Hayes also reinforced the broader point that among Layer-1 blockchains, few are likely to survive cycles — naming just a handful of protocols (like BTC, ETH, SOL and ZEC) as statistically more likely to endure over time.
🔎 What Monad Has That Raises Red Flags
The reasons behind Hayes’ strong caution are directly tied to how Monad is structured: it raised major capital from VCs (reportedly about $225 million) before launch. That dose of early money doesn’t guarantee healthy decentralization or retail-friendly supply dynamics.
At launch, the circulating float was limited. That’s often how VC-driven projects work — insiders and backers hold substantial token allocations under lock-up clauses, with the promise of future unlocks once the project hits certain milestones. Hayes’ concern: when unlocks happen, it may trigger widespread sell-offs before the “real usage” ever materializes.
Given this design, even a healthy initial rally (like MON’s early surge) may not signal long-term viability or utility — but rather speculative hype that’s vulnerable to supply shocks.
⚠️ What This Means for Investors and What to Watch
For retail investors or speculators who have bought MON early, Hayes’ warnings may serve as a caution: if the unlock schedule for tokens begins soon, price may tank sharply. The risk is not just volatility — it’s structural.
If you’re considering investing, it’s worthwhile to check: how many tokens are locked, when they unlock, and who holds them. Projects with large insider holdings and a steep unlock schedule are always riskier — especially when usage, adoption, or real-world demand are unverified or minimal.
Despite the grim warning, Hayes remains bullish on broader crypto markets — but his bullishness excludes high-risk, high-FDV tokens like Monad. He expects any real gains to come from liquidity cycles, established chain users, or privacy/utility-focused networks — not speculative Layer-1 launches with weak tokenomics.
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