Monad addresses Coinbase token sale slowdown as risk of undersubscription grows

With sales of Monad tokens slowing sharply after an initial burst on Coinbase, the public offering now appears at real risk of concluding undersubscribed.

Late on day one, buyers had taken up roughly 48% of the 7.5 billion MON tokens on offer — a stark contrast with the early surge that suggested the sale might wrap up within 24 hours. As of 5 p.m. ET on Tuesday, the subscription rate clocked in at just under 64%, indicating that day-two demand is running well below the first day’s pace.

Against the backdrop of Tuesday's reduced activity, Monad co-founder Keone Hon took to social media to explain, and perhaps defend, the project's strategy.

"The purpose of the MON token sale is to achieve the broadest distribution," Hon wrote in a post to X. "We chose Coinbase (and their allocation algorithm, which is democratic and transparent) because of their unique ability to reach an audience that we think is important to engage and re-activate. The world is a big place and it's so important to break out of the bubble."

On Monday, the much-anticipated public offering of Monad’s native token via Coinbase generated about $43 million within the first half hour. Monad seeks to raise about $187 million worth of USDC, with the maximum and minimum bid set at 100,000 USDC and 100 USDC, respectively.

Compared to another recent token sale, Monad's public offering is underperforming. Last month, MegaETH's public sale was so oversubscribed that despite aiming to raise about $50 million, investors committed over $1.39 billion.

Market watchers online have speculated that Coinbase's MON token sale being off limits to European traders may be playing a role in the lackluster sales numbers through Tuesday. Others suggested Monad's tokenomics and past raises may have turned off potential investors.

"In the MON token sale on Coinbase, users get 5 1/2 days to decide whether to commit, and once they commit, they're locked in," Hon also said on Tuesday. "That actually incentivizes people to wait until the last minute to evaluate, which is an interesting dynamic that might be revisited for future sales."

If the tokens on offer are not completely sold by the closing date this coming Saturday, "unsold tokens will be reallocated to Ecosystem Development," according to Monad.

Coinbase’s new token-sales platform, built after its $375 million Echo acquisition, comes amid what executives describe as the most favorable U.S. regulatory climate for ICOs in years.

With SEC guidance softening and Congress advancing new market-structure bills, the company sees a reopening of the door for compliant U.S. retail token launches.