Monad Offers $60 Million Buyback to Investors, Few Accept

MarketsMonad, a competitor to Ethereum, presented an opportunity for early investors to cash out their investments, offering up to $60 million in total. However, nearly all investors declined the offer.

This buyback initiative was launched just three months ahead of the scheduled unlocking for investors, while MON is trading below its initial public-sale price and a significant portion of its token supply remains uncirculated.

By Shaurya Malwa 42 min ago 2 min read Make preferred on

The Monad Foundation announced that it had concluded a program aimed at purchasing locked MON tokens from select early investors at a discounted rate but reported that very few opted to sell.

Any MON tokens that were repurchased in this program will remain locked according to their original vesting schedule, meaning the buyback will not accelerate the release of these tokens into the market.

Despite a surge in decentralized finance activity surrounding Monad, MON's price has been sluggish, and the Foundation indicated that the buyback was designed to provide liquidity for investors whose situations or strategies had changed, while maintaining alignment among long-term holders.

Monad offered its early backers a chance to liquidate their locked tokens ahead of the usual selling timeline. Almost all of those contacted chose to retain their investments.

The Foundation disclosed that it had set aside a budget of up to $60 million for this buyback program, although the exact price offered, the amount utilized from the budget, and the number of participating investors have not been revealed. CoinDesk has requested details on the specific discount extended to token holders.

This buyback served as a type of early exit strategy, allowing investors to receive cash immediately if they were willing to accept a lower price instead of waiting for their MON tokens to become tradable. Any tokens acquired by the Foundation will stay locked in line with their original vesting timeline, not releasing them to the market prematurely.

Monad is a newer blockchain platform designed to support applications that are compatible with Ethereum. The MON token is utilized for transaction fee payments and to enhance network security.

Approximately 19.7 billion MON tokens were allocated to investors, representing nearly 20% of the total initial supply. These tokens were locked at the time of Monad's public network launch last November and will start to unlock after a year, followed by monthly releases over a four-year period.

This means that November marks the first opportunity for early investors to sell their tokens freely.

As of Tuesday, MON was trading around $0.021, which is approximately 16% lower than the $0.025 price from last year's public sale. Currently, about 11.8 billion MON tokens are in circulation, giving the token a market capitalization of nearly $250 million, compared to a fully diluted valuation of about $2.1 billion.

Despite the growth in network activity, the token price has struggled to gain traction.

Data from DeFiLlama shows that the total value locked in Monad-based decentralized finance applications has surged to around $895 million, up from about $360 million on July 2, marking an increase of nearly 150% in just six weeks. The value of stablecoins on Monad is approximately $707 million, while decentralized exchanges on the platform have processed roughly $79 million in trading volume over the past day.

The reasons behind the investors' rejection of the Foundation's offer remain unclear. Without information on the discount they were presented, the lack of sellers cannot be interpreted solely as a bullish sentiment toward MON.

The Foundation emphasized that the buyback initiative aimed to offer liquidity to early investors whose needs or investment strategies had shifted while ensuring that the remaining holders remained aligned for the long haul.