Key Takeaways
- Arthur Hayes criticizes Monad, calling it "another high market cap, low float VC coin."
- Keone Hon responds to Hayes's criticisms, defending Monad's innovative technology.
- Debate centers around the MON token's economics and its ability to withstand selling pressure.
- The disagreement highlights the tension between trader and developer perspectives in crypto.
Introduction
In late November, Arthur Hayes, co-founder of BitMEX, ignited a fiery debate in the crypto community when he slammed the newly launched blockchain project, Monad, just days after its mainnet went live. Hayes labeled Monad as "probably going to dump 99%," deeming it "another high market cap, low float VC coin." Keone Hon, co-founder of Monad, swiftly responded, leading to a public and engaging face-off.
The Showdown Unfolds
Keone Hon's Rebuttal
Hon began his message by acknowledging Hayes's accomplishments in the crypto space, recognizing his significant influence. He then proceeded to detail the unique aspects of Monad that set it apart from other Layer 1 (L1) projects. Hon highlighted the network's speed, noting transactions finalizing within seconds, and the decentralized validator network consisting of 170 globally distributed nodes. He emphasized that Monad challenges the prevailing notion that efficiency necessitates centralization, stressing the importance of decentralization and trust-neutrality.
Technological Innovations
Hon pointed out that Monad is built from scratch using C++ and Rust, incorporating numerous optimizations inspired by high-frequency trading. He also highlighted MonadBFT, an advanced consensus mechanism that addresses pipelined consensus tail-fork problems. Furthermore, asynchronous execution allows for even greater efficiency. Hon also mentioned a range of other innovations such as a full JIT compiler, the new database MonadDb, the block propagation mechanism RaptorCast, and parallel execution.
Arthur Hayes's Counter
Hayes remained unimpressed by Monad's technical features. He asserted that he doesn't care about the tech, but rather focuses on the MON token's economics. Hayes argued that the current token distribution virtually guarantees that the MON price will decline. He challenged Hon to explain how the chain can absorb 90% of the token supply being sold without crashing the price. He also questioned how much real usage is needed to generate organic demand that can soak up selling pressure from early investors and team members.
Economic Concerns
Hayes expressed concerns about the roughly 1% monthly inflation from staking rewards, questioning how that can sustain the price. He described MON as a "hot potato," warning that the overall trend would be downward due to supply and demand dynamics.
Keone Hon's Counter-Counter
Hon corrected Hayes's information, stating that the annual inflation rate is 2%, not monthly. He asserted that locked tokens cannot be staked, which is fairly unprecedented. He emphasized that the Coinbase token sale prioritized retail participation. Hon challenged Hayes to provide specific criticisms of Monad, asserting that the team isn't copying the same playbook as other projects.
Hayes's Challenge
Hayes challenged Hon to unlock all the tokens immediately, saying that would set Monad apart from other "ETH killer" projects. Hon countered with a question: What are your specific criticisms of Monad? He noted that other VC-backed companies also have locked tokens, and asked if Hayes thinks Monad could succeed.
Community Reactions
The showdown sparked widespread discussion within the crypto community. Many questioned Hayes's logic, with some pointing out that he never asked these questions of projects he's invested in. Others criticized Hayes's focus solely on price, dismissing the technology.
MON Price Analysis
Monad's mainnet launched on November 24, and MON trading commenced. MON's performance was initially muted, with the opening price dipping below the public sale price. However, the price slowly climbed afterward. Nearly a week after launch, the MON price has fallen from its peak of over $0.04 to around $0.03.
An Unequal Playing Field
One striking aspect of this showdown was that it occurred on different levels. Hayes focused on price and token economics, while Hon defended the project's technology and long-term vision. Critics often have an advantage in the court of public opinion, as their criticisms are easy to understand and can evoke emotion. Verifying technical merits takes time, and ecosystem flourishing requires developers to use the platform. This is an argument without an easy resolution. The next few years will decide whether developers actually use Monad to build something of value. As Hon put it, "It's a once-in-a-lifetime shot, worth taking."
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