A sober reflection on the $2.5 billion FDV: Monad's public offering document reveals the true face of "transparency with restraint"

With the launch of the Monad (MON) token on Coinbase, the project's 18-page disclosure document has become a market focal point.

This document, provided by Monad Foundation's subsidiary MF Services (BVI), Ltd., comprehensively reveals the full picture of Monad—from project architecture to financing, from token allocation to sales rules, as well as transparent market maker information and security risk warnings. It provides investors with the key information necessary to make informed decisions and reflects the project's commitment to transparent operations.

In addition to key data already widely cited by the media, such as "2.5 billions USD FDV," "unit price 0.025 USD," and "7.5% public sale ratio," the document also systematically discloses many other important details, including legal pricing, token release schedule, market making arrangements, and risk warnings.

Of particular note, the document devotes considerable space to systematically listing multidimensional risks related to token sales, the Monad Foundation, MON tokens, the Monad project, and its underlying technology. For users interested in investing in MONAD tokens, it is recommended to thoroughly read this document and make rational investment choices.

Legal Structure

• The Monad Foundation conducts sales on Coinbase through its subsidiary MF Services (BVI) Ltd.
• MF Services (BVI) Ltd. is a wholly owned subsidiary of the Monad Foundation registered in the British Virgin Islands and is the seller in this token sale.
• The Monad Foundation is the sole director of MF Services (BVI).

Core Development Entity and $262 Million Financing Details

• The core contributors to Monad are the Monad Foundation and Category Labs, Inc. (formerly Monad Labs, Inc.).
• The Monad Foundation is a Cayman Islands foundation company dedicated to supporting the development, decentralization, security, and application promotion of the Monad network by providing a range of services including community engagement, business development, developer and user education, and marketing services. Category Labs is headquartered in New York and provides core development services for the Monad client.
• Monad's three co-founders are James Hunsaker (CEO of Category Labs), Keone Hon, and Eunice Giarta. The latter two serve as co-GMs of the Monad Foundation.
• The Monad Foundation is overseen by a board of directors, consisting of Petrus Basson, Keone Hon, and Marc Piano.
• Financing timeline:

1. Pre-Seed: $19.6 million raised from June to December 2022;
2. Seed round: $22.6 million raised from January to March 2024;
3. Series A: $220.5 million raised from March to August 2024;

• In 2024, the Monad Foundation received a $90 million donation from Category Labs to cover operating expenses from 2024 to 2026. This donation is part of the $262 million raised by Monad Labs in various funding rounds.

Key Information on Sale Terms

• Token sale period: November 17, 2025, 22:00 to November 23, 10:00.
• Token sale ratio: up to 750 million MON (accounting for 7.5% of the initial total supply).
• Sale price: $0.025 per MON. If fully sold, $187.5 million will be raised.
• Minimum subscription $100, maximum $100,000 (Coinbase One members may enjoy higher limits according to platform terms).
• FDV: $2.5 billions
• “Bottom-up” oversubscription allocation: To ensure broad distribution and prevent whale monopolization, the document discloses a mechanism called "bottom-up fill." In the event of oversubscription, a bottom-up fill allocation mechanism will be used to maximize broad distribution among participants while limiting asset concentration among large buyers.
• Example: In a sale of 1,000 tokens, three users (small/medium/large) apply for 100/500/1,000 tokens, respectively. In the first round, each receives 100 tokens (700 remaining, low-tier users fully satisfied). In the second round, the remaining 700 tokens are split equally between the medium and large users, each getting 350. Final allocation: small 100, medium 450, large 450.

Token Allocation and Release

The MON tokenomics model is shown below:

The following chart shows the expected token release schedule:

Overall, on the first day of Monad mainnet public launch, about 4.94 billion MON tokens (49.4%) will be in an unlocked state. Of these, about 1.08 billion MON tokens (10.8% of initial total supply) are expected to enter public circulation through public sale and airdrop, while about 3.85 billion MON tokens (38.5%) will be allocated for ecosystem development. Although these tokens are unlocked, they will be managed by the Monad Foundation and will be used for grants or incentives at a strategic level over the coming years, and delegated according to the Foundation's validator delegation plan.

All tokens allocated to investors, team members, and the Category Labs treasury will be locked on the first day of Monad mainnet public launch, following a clear unlocking and release schedule. These tokens will be locked for at least one year. All locked tokens in the initial supply are expected to be fully unlocked before the fourth anniversary of the Monad mainnet launch (Q4 2029). Locked tokens cannot be staked.

It is worth mentioning that the document indicates that in the future, after the network launch, the Monad Foundation may continue to conduct airdrops to incentivize exploration and usage of applications and protocols within the Monad network and ecosystem.

Future Supply: 2% Annual Inflation + Fee Deflation

• Inflation: 25 MON newly minted per block as rewards for validators/stakers, with annualized inflation of about 200 million (2% of initial total supply), aimed at incentivizing network participants and ensuring network security.
• Deflation: All base transaction fees (Base Fee) are burned. This mechanism reduces circulating supply to offset some inflationary pressure.

Monad Market Making and Liquidity Arrangements

To ensure good liquidity after the token is listed and to achieve transparency, MF Services (BVI) Ltd. has disclosed in detail its market maker cooperation and liquidity support plans.

MF Services (BVI) Ltd. has signed loan agreements with five market makers: CyantArb, Auros, Galaxy, GSR, and Wintermute, lending a total of 160 million MON tokens. The loan term for CyantArb, Auros, Galaxy, and GSR is one month (renewable monthly); Wintermute's loan term is one year. At the same time, a third-party institution, Coinwatch, has been introduced to monitor the use of the lent tokens, ensuring the funds are used to enhance market liquidity and not for illicit operations.

In addition, MF Services (BVI) may deploy up to 0.2% of the initial MON token supply as initial liquidity for DEX pools.

How to View Monad's Market Making Arrangements?

Open and Transparent

In the Web3 space, the transparency and rationality of market making arrangements have always been a core concern of the market. Traditional projects often trigger investor trust crises due to undisclosed market maker information. The market making details disclosed by Monad this time, with transparency at its core, break industry convention.

Furthermore, monitoring by Coinwatch will maximize assurance that the loaned tokens are genuinely used for market making, demonstrating the project's emphasis on compliant operations.

Prudence in Structural Design

The four market makers have one-month loan terms with monthly renewals, while only Wintermute provides a one-year commitment. This structure reflects Monad's cautious approach:

• Flexibility: Short-term contracts allow the project to adjust market making arrangements flexibly according to market conditions. If a market maker underperforms, the contract can simply not be renewed at month-end.
• Risk Hedging: Wintermute's one-year commitment provides a stable long-term foundation for market liquidity.

This combination shows the project aims to ensure initial liquidity without over-relying on a single market maker or overcommitting to long-term arrangements.

Restraint in Market Making Loan Size

Relative to the total supply of 10 billion, the 160 million tokens loaned for market making account for only 0.16%. This very small proportion may be due to:

• Avoiding excessive market intervention
• Controlling token dilution
• Market-driven considerations: relying on real trading demand rather than excessive market making to maintain price stability.

Additionally, the Foundation will use up to 0.2% (200 million tokens) for initial DEX liquidity, further confirming this prudence.

Potential Risks

However, from the 18-page Monad document, it is clear that the project has struck a very conservative, even somewhat cautious, balance between "initial price discovery" and "long-term decentralization."

At the current pre-market price of $0.0517, these market making loans are worth only $8.27 million. Compared to many projects that allocate 2–3% for "market making quotas," this may not be enough to support liquidity in the face of significant selling pressure.

Moreover, the Foundation will use up to 0.2% (200 million tokens) for initial DEX liquidity, and it is stated as "may" rather than "must." This amount can only ensure there is no liquidity vacuum at launch, but cannot support sustained depth. The official document also highlights risks related to DEX and CEX liquidity, effectively disclaiming responsibility in advance.

For investors, this means that if there is not enough natural trading depth and organic buying support after launch, the MON token price may experience high volatility. Therefore, when participating in investment, in addition to focusing on the project's fundamentals and long-term vision, it is wise to remain vigilant about the initial market liquidity and price discovery mechanisms.