Keone Hon, founder of Monad Labs, issued a direct response to BitMEX co-founder Arthur Hayes after the crypto veteran predicted a 99 percent crash for the recently launched blockchain's native token. The exchange highlights growing skepticism around high-valuation token launches and raises questions about which layer-1 blockchains will survive the current market cycle.
Hayes appeared on the Altcoin Daily podcast on November 28, describing Monad as "another high-FDV, low-float piece of VC lint" and questioning its long-term viability. The BitMEX co-founder argued that projects with large gaps between fully diluted valuation and circulating supply typically experience brief speculative pumps followed by steep declines when tokens unlock for founders and venture capitalists.
Hon's response came as the network entered its sixth day on mainnet following a Coinbase token sale that raised $269 million from 85,820 participants across more than 70 countries. The Monad founder acknowledged Hayes' industry contributions but characterized the criticism as missing the project's technical innovations.
MON began trading on November 24 at a sale price of $0.025 per token, briefly dipping below that level before recovering. The token has since experienced significant volatility, with Hayes and other market observers citing the token structure as a fundamental weakness.
What Happened
Hayes laid out a bearish thesis during his podcast appearance, predicting that "pretty much every other L1 besides Ethereum or Solana is a zero and they're not going to do very well." He described Monad as "another bear chain" and stated his expectation that the token would decline 99 percent from current levels.
The BitMEX co-founder acknowledged purchasing a small allocation of MON tokens but maintained his skeptical stance. Hayes explained that projects with high fully diluted valuations relative to circulating supply create artificial scarcity that attracts retail traders before insider token unlocks trigger selloffs.
Hon responded via Twitter on November 29, beginning his statement with respect for Hayes' contributions to crypto derivatives markets. The Monad CEO then [pivoted]((https://forklog.com/en/monads-founder-outlines-blockchains-technical-edge-to-arthur-hayes/) to what he termed "FUD similar to what you faced during the early days of BitMEX" and outlined the network's technical differentiators.
The founder emphasized transaction speed as a key advantage, noting that withdrawals from Coinbase appear in user wallets within one to two seconds. This performance occurs across 170 globally distributed validators rather than the single sequencer model used by many competing blockchains, according to Hon.
Hon highlighted MonadBFT as a frontier consensus mechanism that solves tail forking problems. The system allows for pipelining the block creation process without the risk of chain reorganization and maximal extractable value attacks, the founder stated.
Additional technical components distinguish Monad from standard Ethereum Virtual Machine implementations, Hon argued. These include a just-in-time compiler that translates EVM bytecode to native code, MonadDb as the custom database, and RaptorCast for block propagation. The network code is written from scratch in C++ and Rust, with all code fully open and audited.
Hon also addressed the token distribution, noting that MON became the first asset on Coinbase's token sale platform. The team employed a "fill from the bottom" allocation model designed to prevent whales from capturing the entire issuance. The founder concluded by offering to send Hayes MON tokens to test the network firsthand.
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Why It Matters
The Hayes-Hon exchange crystallizes a broader debate over token economics that extends beyond Monad to the entire layer-1 blockchain sector. Hayes named only Bitcoin, Ethereum, Solana and Zcash as likely survivors of the next market cycle, suggesting most new networks will fail regardless of their technical capabilities.
The discussion highlights conflicting views on what drives blockchain value. Hayes argued that technology is secondary to token structure and market dynamics, stating explicitly that he does not care about the technical innovations Hon outlined. The BitMEX co-founder called on Monad to unlock all tokens immediately to allow true price discovery under bullish market conditions.
Hon countered that the current vesting model is necessary to build infrastructure capable of competing with traditional finance over the long term. The founder rejected what he characterized as a short-term trading perspective that ignores the technical performance required for sustainable blockchain adoption.
Monad raised $225 million from venture capital firm Paradigm last year before its November 24 mainnet launch. The Coinbase token sale was oversubscribed 1.43 times, with 99 percent of participants receiving their full requested allocation. About 50.6 percent of the total supply remains locked until vesting begins in the second half of 2026, continuing through 2029.
The token structure that Hayes criticized reflects broader patterns in recent blockchain launches. High fully diluted valuations combined with low initial circulating supply have become standard practice for venture-backed networks, [creating](https://www.coindesk.com/business/2025/11/24/monad-s-mon-token-stumbles-out-of-the-gate-in-trading-debut-after-slow-token-sale0 what critics describe as structural risks for retail investors.
Hayes maintained a bullish outlook on the broader cryptocurrency market despite his skepticism about specific projects. He predicted renewed monetary expansion will drive the next bull cycle, with privacy technologies and zero-knowledge systems emerging as dominant themes. The BitMEX co-founder recently disclosed that Zcash has become the second-largest holding in his family office Maelstrom, trailing only Bitcoin.
For Monad, the immediate challenge involves demonstrating that technical performance can generate organic demand sufficient to justify its valuation as token unlocks approach. The network's ability to attract developers and users will determine whether Hon's technical defense proves prescient or whether Hayes' bearish prediction materializes. The outcome will influence how investors evaluate future high-valuation layer-1 launches and could reshape expectations around token distribution models across the blockchain industry.
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