Monad investors are celebrating as the value of the blockchain’s token trades above the price it was sold for during its initial coin offering, netting those who participated millions of dollars in profits.
Between November 17 and 22, Monad sold 7.5 billion MON tokens directly to the public for $0.025 each — giving the blockchain an implied valuation of $2.5 billion.
When the Monad blockchain and its MON token launched on Monday, more investors piled in, pushing MON up 78% to almost a $4 billion valuation.
The surging price highlights the excitement surrounding the Monad blockchain, which was in development for over three years — a long time compared to rival projects.
It also comes as the crypto market bounces back after Bitcoin and other crypto assets suffered a multiweek drawdown kicked off by a market-wide leverage wipeout on October 10.
With the top crypto recovering around 5% from its lows, smaller assets like MON are benefitting from the bullish impulse.
Strong start
Monad is a new Ethereum-compatible blockchain that aims to offer fast, low cost transactions.
The project was co-founded by former Jump Trading employees Keone Hon and James Hunsaker. Investors, including Paradigm, Coinbase Ventures, and Dragonfly Capital, have piled $248 million into Monad over multiple funding rounds.
And it appears to be off to a strong start.
Aside from its soaring token, the Monad blockchain has already processed over three million transactions from 140,000 addresses, and developers have deployed over 18,000 smart contracts to the blockchain, per Nansen data.
Yet this year, several other highly-anticipated blockchain projects have also done well initially only to flounder months down the line.
In September, Bitfinex’s Plasma blockchain launched with similar fanfare. Its token soared to a $3 billion dollar valuation while investors poured almost $10 billion into DeFi protocols on the blockchain, per DefiLlama data.
Two months later, Plasma’s XPL token has crashed 87% and deposits have halved to around $4.7 billion.
Plasma isn’t alone. Earlier this year, another highly-anticipated project called Berachain suffered a similar fate. DeFi protocols on the blockchain now hold less than $300 million of deposits after initially securing $3.4 billion. The project’s BERA token is also down 92% from its all-time high.
A condition in Monad’s token sale, conducted through US crypto exchange Coinbase, may be helping to buoy its value.
Most investors who purchased the token during the sale were able to sell it immediately after the blockchain launched. However, Coinbase said those who do will find it harder to receive allocations in future tokens sales, disincentivising early selling.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
