Monad's highly anticipated mainnet launch has generated impressive early metrics with total value locked approaching $200 million and transactions exceeding 14.7 million within the first week, but a closer examination reveals that the vast majority of activity remains concentrated in established DeFi protocols rather than native ecosystem applications.
The high-performance blockchain, which promises 10,000 transactions per second through parallel execution, officially launched its mainnet and MON token on November 24 following a three-and-a-half-year development cycle backed by $244 million in funding from Paradigm and Coinbase Ventures.
The launch distributed 3.3% of the 100 billion token supply through an airdrop to 230,500 users, with an additional 7.5% sold through Coinbase.
According to Nansen data, Monad's network activity has surged dramatically with transactions accelerating 637% in the first seven days. Active addresses climbed to over 404,000, while collected fees rocketed to more than $111,000 - higher than what popular networks including Aptos, Near Protocol, Stacks and Algorand generated during the same period.
What Happened
The total value locked in Monad has approached the $200 million metric, with DeFi Llama showing the network holding approximately $150-200 million across various protocols. However, the distribution reveals a concentration problem: roughly 90 percent of TVL sits in established protocols that deployed on Monad - Uniswap, Curve, Morpho and Upshift - rather than applications native to the ecosystem.
Uniswap leads with $28 million in locked assets, while Gearbox, a lending platform, holds $20 million. Morpho, Upshift and Curve Finance each maintain over $1.5 million. These protocols primarily provide yield opportunities for MON tokens or stablecoins but were not built specifically for Monad's infrastructure.
Meanwhile, native Monad applications lag significantly behind in total value locked. Kuru Exchange, a central limit order book DEX that leverages Monad's low latency for centralized exchange-like experience, has surpassed $1.5 million in TVL with 24-hour trading volume exceeding $11 million. FastLane, which offers liquid staking through its shMON token, holds approximately $5 million in TVL after its mainnet launch saw over 7.13 million MON staked across 800 unique addresses.
Kintsu maintains $1.5 million in locked value, while Clober holds $1.16 million. These figures pale in comparison to the established protocols, highlighting the challenge of bootstrapping a native ecosystem despite strong technical fundamentals.
The fee generation on Monad similarly reflects this concentration, with the majority of on-chain fees stemming from swapping MON tokens and adding liquidity to protocols rather than from diverse ecosystem activity. DEX volume on Monad reached $215 million in 24 hours, driven mostly by Uniswap, which handled $62 million in transactions during this period. Other top DEX protocols include LFJ, Curve Finance and Swyrl Finance.
The first week also saw the network process 8.9 million transactions with 24-hour transaction fees exceeding $109,000. However, these metrics - while impressive for a new blockchain - don't necessarily translate to sustained organic adoption if the activity remains concentrated in token speculation rather than diversified application usage.
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Why It Matters
The concentration of TVL in established protocols rather than native applications raises questions about ecosystem maturity and long-term sustainability. While strong early numbers provide marketing momentum, they don't necessarily indicate that Monad has achieved product-market fit or that developers are building compelling applications unique to its infrastructure.
This pattern mirrors challenges faced by other new Layer-1 blockchains that struggle to convert initial hype and liquidity into durable ecosystem growth. The 38.5% of total supply allocated to ecosystem incentives - 38.5 billion MON tokens - provides the foundation with substantial resources to attract developers and users, similar to how Optimism and Arbitrum achieved rapid TVL growth through large-scale ecosystem incentives.
However, if not deployed strategically, this allocation could become selling pressure rather than a growth catalyst. The key lies in whether the Monad Foundation uses these resources to precisely incentivize core projects or distributes them indiscriminately, which will determine whether the blockchain can build an ecosystem moat.
Monad's network growth is expected to accelerate as more companies deploy on its mainnet. Notable protocols preparing to launch include Axelar, HyperLane, LayerZero, Renzo Protocol, SushiSwap and deBridge. The ecosystem encompasses 304 protocols across DeFi, AI and prediction markets, with 78 unique to Monad.
The MON token initially rallied more than 70% above its Coinbase sale price, defying the steep post-airdrop declines that dominated 2025 launches. However, the token has faced pressure as early investors begin taking profits. BitMEX co-founder Arthur Hayes, who initially predicted MON could reach $10, later reversed his stance and recommended selling, tweeting "Send this dogshit to ZERO!"
The token's high fully diluted valuation near $3-4 billion with only around 10-11% of supply unlocked creates risks similar to other low-float, high-FDV launches. More than 50.6% of supply remains locked through 2029, covering team, investor and treasury allocations. Historical precedents including Pi Network and Somnia show how tokens can surge following mainnet launches before crashing as initial buyers take profits.
Monad's open interest has started declining from this month's high of $6.67 million to $4.29 million on November 28, according to CoinGlass data. The futures open interest separately jumped to $142 million from less than $50 million on launch day, creating potential liquidation risk if the token drops significantly.
The blockchain's technical capabilities remain strong, with bytecode-level equivalence to the Ethereum Virtual Machine allowing smart contracts to migrate without modifications. The platform uses pipelining and parallel transaction execution to achieve high throughput while maintaining relatively moderate hardware requirements for node operators, preventing only data centers or institutional actors from running nodes.
Monad's one-second block time and single-slot finality provide faster confirmations compared to traditional sequential blockchains. The network processed its first week without major technical incidents, though malicious actors began spoofing token transfers within 48 hours of launch, according to CTO James Hunsaker, who warned users that fake ERC-20 transfers could imitate legitimate transactions even when no wallet approval occurred.
The early metrics suggest Monad has successfully launched its technical infrastructure and attracted initial liquidity. The challenge now lies in converting that liquidity and activity into a thriving native ecosystem with applications that leverage Monad's unique capabilities rather than simply replicating what already exists on Ethereum and other chains.