Arthur Hayes Intensifies Critique of Monad, Calling It a “High-FDV VC Coin”
Arthur Hayes, co-founder of BitMEX and Chief Investment Officer at Maelstrom, has intensified his public critique of the recently launched Layer-1 blockchain Monad, labeling the project a “high-FDV, low-float VC coin” and predicting its value could ultimately trend towards zero. Hayes’s warnings, prominently featured in interviews and social media posts throughout late November and ahead December 2025, have sparked a fierce public debate with Monad’s leadership, underscoring the deep ideological divide between veteran traders focused on token economics and developers focused on technical innovation.
The Trader’s Stance: Tokenomics Over Tech
Hayes’s central argument is purely economic and highly skeptical of Monad’s token distribution model. He contends that Monad, which raised $225 million in funding from venture capital firm Paradigm, exhibits a critical structural flaw common to many new Layer 1s: a massive disparity between its Fully Diluted Valuation (FDV) and its very small initial circulating supply, or “low float.” Hayes warns that this setup is designed to generate a sharp, ahead price surge based on scarcity and hype. He argues that this setup serves as a “VC trap,” allowing ahead investors and the project team to trade their vested tokens into the market at inflated prices once their lockups expire, leading to an inevitable, steep crash. Hayes has maintained his stance publicly, stating explicitly, “I don’t care what your technology does, I’m a trader,” and insists that only a handful of Layer 1s—naming BTC (BTC), ETH (ETH), Solana (SOL), and Zcash (ZEC)—have the network effects to survive long-term.
Monad’s Defense: Technical Innovation and Decentralization
The co-founder and CEO of Monad, Keone Hon, has issued a direct and robust rebuttal to Hayes’s claims. Hon acknowledges Hayes’s influence but defends Monad by pointing to its unique technical architecture and commitment to decentralization. Monad is built from scratch in C++ and Rust and features significant innovations, including parallel execution and MonadBFT consensus, which enables high-speed transaction finality in under one second without sacrificing decentralization. Hon argues that Monad is not just “another L1,” but a technically superior network that aims to challenge the assumption that high performance requires centralization. Furthermore, Hon countered the tokenomics criticism by stating that Monad’s annual inflation rate from staking rewards is a low 2% and that their public token sale was structured with a “bottom-up fill” approach to prevent whale monopolization, aiming for broad retail distribution. The core of Monad’s defense is that its technical advantages require time to mature and attract an ecosystem, and judging the project solely on short-term price flow ignores its long-term potential to solve critical scalability issues facing the entire industry.
This ongoing public spat highlights the fundamental tension in the crypto space: the debate over whether revolutionary technology can succeed if its economic model is perceived as primarily designed for insider profit.
