Arthur Hayes warns that Monad could big dump 99%: overvalued with low Circulating Supply VC coin

The highly anticipated Layer 1 public chain Monad mainnet officially launched this week. However, Arthur Hayes warned that the VC-backed Monad may face a big dump due to high FDV and low circulating supply. (Background: Monad is officially launched! $MON Opening coin price performance, tokenomics, Coinbase public sale results… all sorted out) (Background information: Monad raised only 70% of its target in just 2 days of public sale! Coinbase Launchpad debut failure?) The newly launched L1 public chain Monad has attracted market attention with $225 million in funding from Paradigm and support from Coinbase's public sale. However, BitMEX founder Arthur Hayes expressed concerns earlier in an interview, warning that Monad could drop by 99%, deeming it a “high valuation trap” where venture capitalists shift risks onto retail investors. The high FDV risk masked by the influx of funds When the total supply of a token far exceeds its circulating supply, early prices can easily be inflated by a false sense of scarcity. Hayes pointed out that the vast majority of Monad's tokens are still held by insiders and VCs, and the market conditions do not reflect actual supply and demand. “These seemingly impressive valuations are just packaging liquidity illusions as innovative stories. When real supply is released, it is hard for prices not to collapse.” Token unlocking is a key node affecting prices. Once token unlocking takes effect, early holders can freely sell, and the market will face the dual challenge of slowing demand and surging supply. Investors should master the unlocking timetable and flow data to avoid the impact of short-term token dumping. Monad founder responds In response to Hayes' comments, Monad co-founder Keone Hon did not elaborate on the concerns over high FDV this morning but instead wrote a lengthy statement about Monad's technical advantages, avoiding escalating the war of words. Dear @CryptoHayes, I have great respect for everything you have built for this industry. Perpetual futures are an amazing innovation, and I believe they will continue to grow rapidly. Your impact on the crypto industry is profound. In the past few days, I have seen you comment on Monad a lot. While I believe some of your words may have been taken out of context, I think you might be interested in understanding Monad's real differences and why it is not just another L1. I know you faced a lot of FUD during your time at BitMEX, and your approach was to confront it directly and continue driving innovation. I want to respond in the same way. Here are the real differences between Monad and other chains: It is really fast. Funds arrive in 1-2 seconds from Coinbase withdrawals, that speed is almost magical. It is built on an entirely new tech stack, enabling this speed to be realized in a highly decentralized network. There are currently 170 globally distributed validators, and there will be more in the future. You can check the real-time network topology here: https://gmonads.com This is important. While everyone says that blockchain needs to be centralized, or become a data center chain or a single sequencer to achieve high performance, Monad proves the opposite possibility. What enterprises, asset issuers, and developers really want is decentralization and trusted neutrality—not letting a single sequencer decide their fate. Monad's code is fully open source, audited, and written from scratch in C++ and Rust, providing extensive HFT-level optimizations. The code is here: https://github.com/category-labs/monad Monad introduces MonadBFT—a groundbreaking consensus mechanism that solves the tail forking problem of pipelined consensus. This is crucial: BFT consensus essentially requires multiple rounds of communication, and pipelining is the only way to achieve fast block production. In the past, pipelining easily led to 1 block reorganization, enabling MEV attacks. Monad eliminates this problem. Monad introduces Async Execution, allowing consensus and execution to operate in parallel on different tracks, leading to higher efficiency. Ethereum is also trying to introduce a similar concept. It also has a whole set of technological innovations, such as: JIT compiling EVM bytecode into native code A brand new database (MonadDb) A new block propagation mechanism (RaptorCast) Parallel execution details can be found here: https://docs.monad.xyz/introduction/monad-for-developers The ecosystem has just started, but a group of young and eager developers have launched new apps. You can check them out: https://app.monad.xyz The Monad Foundation and Category Labs team are fully committed to ensuring the entire space continues to grow. Research in asynchronous execution, gas pricing, privacy, and other fields will continue to push boundaries. This is only Day 6 of the mainnet, and our team will keep moving forward in different ways. Finally, MON is the first token on the Coinbase Token Sales platform, aimed at allowing as many people as possible to acquire tokens before the public listing. This sale adopts a “fill from the bottom” approach to prevent large investors from sweeping the entire sale—something many other projects commonly do. If you'd like, I can transfer some MON to you for testing the network. Thanks again for your contributions to this industry, see you on-chain. Dear @CryptoHayes, I respect what you have built for the industry. Perps are an amazing innovation that I believe will continue to grow rapidly. You've had a big effect on our industry. I have seen you commenting on Monad a lot for the past few days. While I'm sure some… https://t.co/TpoC7M7KYP — Keone Hon (@keoneHD) November 29, 2025 Macroscopic view: Credit expansion drives the market up Despite being bearish on individual VC coins, Hayes maintains a long position on Bitcoin and mainstream assets. He emphasizes that the real driving force is the current global credit expansion. As the Trump administration plans to launch a new round of fiscal stimulus, market liquidity may continue to remain loose. He describes Bitcoin as the “final free market smoke alarm” for financial system pressure. On Hayes' survivor list, only Bitcoin (BTC), Ether…