Ahead of Monad Crypto Launch, Expert Warns of Worst-Case Scenario

Monad is one of those crypto projects everyone has heard about by now. It is a Layer 2 (L2), an Ethereum Virtual Machine (EVM) chain and another so-called Ethereum (ETH) killer. The project expanded quickly throughout 2025, and some believe Monad has real potential, while others expect it to follow the usual L2 pattern of early hype, rapid growth, and a slow decline.

Matas Čepulis, Founder and CEO of LuvKaizen, told Cryptonews that Monad reminds him of projects like Sei (SEI), Sui (SUI), and Avalanche (AVAX). Each of them raised serious money at launch, but the results were not impressive in the long term:

$250 million raised or something, but it all ends at some point with minimum TVL and no revenue. This happened similarly already to SEI, SUI, AVAX, they all raised $100 million to $300 million, ended with F1 sponsorship and dead traction.

‘Why Would I Need Another Layer 2?’

Token performance does not work in their favour either. According to CoinPaprika, most L2 tokens are down around 90% from their all-time highs (ATH) or even lower. In the crypto community, this drop is usually called death. A few projects stand out, such as Mantle (MNT) and Zora (ZORA).

Compared to others, they are down 67% and 64% from ATH. It is worth noting that both are fairly new. Mantle is supported by Bybit, which keeps adding various passive-income options. Zora is more speculative, but the project created a lot of hype at launch and still attracts attention from time to time.

The bigger problem is simple: there are too many L2s. When Ethereum and its ecosystem were developing, L2s were genuinely needed. But the boom in DeFi and Web3 created an environment where chains appeared faster than anyone could track, and most of them were not offering anything new. It is similar to what is happening with AI right now.

Monad may run into the same wall. Čepulis adds:

I do not see much innovation there and everything they say they have. Ethereum or Solana have already been solved. Why would I need another Layer 2?

Will the Monad Launch Change Anything?

Monad ended up in an unusual position. The project became extremely popular and widely discussed. Some users see a big future for it, especially around its NFTs and trading cards, which generated plenty of attention even though the NFT sector has struggled for years.

Monad also has backing from major players. Coinbase became the exclusive platform for the Monad ICO, and U.S. users are allowed to participate, which is rare because of regulatory limitations. This alone gives the project more liquidity and visibility than most new chains receive at launch.

Right now, the community seems more interested in the Monad token than in the technology behind it. This is not surprising. During market corrections traders look for new opportunities, and with Monad gaining attention, it naturally fits certain speculative strategies.

One realistic scenario is a quick sell-off shortly after the Monad crypto launch. There could be a brief spike followed by early investors securing profits. This behaviour has been common in 2025. The classic hold strategy stopped working in many cases, and traders entered aggressively and exited quickly, like what happened with the recent Uniswap (UNI) rally.

The issue is that retail traders do not see what happens behind the scenes. They usually notice growth after it has already taken place.

The Big Nuance

Despite the successful Monad ICO, there are concerns around the MON token. One of them is that a large portion of the supply goes to the team and investors. Čepulis comments:

I see some flaws and pain points in the tokenomics where it is allocated more than 50% of the supply for the team, insiders, etc.

This allocation may also mean that investors, especially those in the insider category, capture most of the upside. Čepulis also noted that many people who had been farming Monad for months may end up receiving very little:

Yappers and KOLs maybe got their part, but I feel really sorry for small accounts who were pushing daily and got really nothing out of it.

On X, there are plenty of accounts actively promoting Monad, which raises questions about how the supply will circulate once trading begins. It is still unclear what will happen to users who receive tokens through the ICO rather than farming.

Monad enters the market with strong visibility, Coinbase backing, and a community that is currently more focused on the MON token than on the underlying technology. But with more than half of the supply allocated to the team and investors, the token may face heavy selling shortly after the Monad crypto launch. Traders in the current market often prioritise quick profit-taking over long-term utility, which increases this risk.

The outcome may resemble the Pump.Fun pattern, with an initial drop followed by recovery if the project continues to build, or the more typical L2 path of early hype and gradual cooldown if Monad does not offer meaningful innovation beyond Ethereum or Solana.

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