Monad Protocol triggered backlash from cryptocurrency traders after opening its MON token airdrop portal with eligibility criteria that excluded many who expected to qualify, including users of the Hyperliquid exchange and HypurrNFT holders. The controversy centers on a distribution plan that grants access to just 5,500 wallets from Monad's community while allocating tokens to 225,000 external addresses, raising questions about how the layer-1 blockchain values its early supporters.
What to Know:
- Monad's airdrop excludes most Hyperliquid traders and HypurrNFT holders despite earlier indications they would qualify for the MON token distribution ending November 3.
- Only 5,500 wallets from Monad's community meet eligibility requirements, representing 0.74% of the project's Discord members.
- The protocol plans to distribute tokens to 225,000 addresses outside its core community, many of whom researchers say may not know about Monad or the claim deadline.
Eligibility Gap Frustrates Active Traders
Monad announced the airdrop portal would remain open through November 3, but the eligibility requirements immediately drew criticism from traders who believed they qualified. Users on X reported that substantial trading activity failed to meet the threshold. Some Hyperliquid traders with volumes exceeding $200 million on perpetual futures contracts found themselves excluded.
The disconnect became apparent when HypurrNFT holders checked their eligibility status. Initial communications suggested these users would receive allocations, yet few actually qualified when the criteria were published.
One frustrated trader called the distribution "a joke," a sentiment echoed across social media platforms.
Monad outlined plans to distribute tokens to more than 235,500 users total. The eligibility framework includes community members active on social media, traders with high volumes on decentralized exchanges like Hyperliquid, and holders of established NFT collections such as CryptoPunks and Pudgy Penguins. DAO participants who voted on Ethereum platforms also made the list, along with ecosystem contributors and developers who built on Monad or participated in hackathons.
Research Community Questions Distribution Strategy
DeFi researcher Coin Metrika published a sharp critique of Monad's approach to the airdrop. The analysis highlighted that 225,000 recipients come from outside the project's existing community. Many of these addresses may not track Monad developments or realize they need to claim tokens before the deadline, according to Metrika's assessment.
The researcher summarized the eligibility criteria in a sarcastic post. "If you haven't figured it out yet, here's a summary of #MonadAirdrop criteria: You have roles in Discord that are difficult to obtain—thank you, we're not interested in you because you're poor! You participated in our testnet—thank you for helping us test the product for free, which we sold to investors for a lot of money," Metrika wrote.
The commentary continued with biting observations about promotional efforts. "Dressed up in clown costumes and shot viral videos to promote the @monad brand—thank you, we laughed out loud at you. You have money that you've shown on the blockchain—let's be friends, here's your airdrop!"
The post captured frustration building within the Hyperliquid and HypurrNFT communities.
The criticism centers on a perceived misalignment between Monad's stated values and its distribution choices. Projects typically use airdrops to reward early supporters and active users, but the current structure appears to favor external addresses over community members who engaged with the protocol during development.
Understanding Key Terms
Layer-1 blockchains operate as independent networks that process and validate transactions without relying on another blockchain. Monad falls into this category, competing with networks like Ethereum and Solana. Airdrops distribute tokens to wallet addresses, usually to build user bases or reward early participation.
Perpetual futures contracts, often shortened to "perps," allow traders to speculate on cryptocurrency prices without expiration dates. Decentralized exchanges facilitate these trades without centralized intermediaries.
Trading volume measures the total value of transactions, with higher volumes typically indicating more committed users.
NFTs represent unique digital assets verified on blockchain networks. Collections like CryptoPunks and Pudgy Penguins have established track records in the space. DAOs, or decentralized autonomous organizations, use token-based voting to make governance decisions.
Market Impact and Community Response
The airdrop controversy coincided with price pressure on Hyperliquid's native token. HYPE traded at $39 at the time of the announcement, marking a 13% decline over the previous week. The drop reflects broader frustration with how the Monad situation unfolded, though market conditions and other factors also influence price movements.
The distribution strategy raises questions about how blockchain projects should balance rewarding active communities against expanding user bases. Monad chose to cast a wide net, but the approach alienated traders and NFT holders who viewed themselves as core supporters.
This tension between growth and loyalty has emerged as a recurring theme in cryptocurrency project launches.
Closing Thoughts
Monad Protocol's airdrop distribution plan sparked significant criticism for excluding active community members while allocating tokens to hundreds of thousands of external addresses. The controversy highlights ongoing debates about how blockchain projects should structure token distributions and value different types of user engagement. With the November 3 deadline approaching, the situation serves as a case study in the challenges of balancing community loyalty with ecosystem expansion.