After Monad's TGE, can the chain turn hype into long-term conversion?

Source: Blockworks Original Title: After Monad’s TGE, can the chain turn hype into long-term conversion? Original Link: https://blockworks.co/news/after-monad-tge

Market Overview

Markets continued to recover from Monday’s losses, with BTC, the S&P 500, and the Nasdaq up 2.52%, 0.22%, and 0.05%, respectively. Risk appetite improved as even safe haven gold gave back some gains, down -0.12% on the day.

The uptick followed a surprise decline in private sector employment. Private employers shed 32,000 jobs in November, compared with expectations for job growth, pushing the odds of a rate cut to 85%, up from 80% a week ago. Microsoft dragged on the Nasdaq, falling more than -2% after reports that the company lowered AI software sales quotas due to softer than expected demand.

Crypto Sector Performance

Across crypto sectors, most indices finished in the green except Gaming, which fell -1.65%. Gaming has been one of the weakest performers this year and is down -77% year to date. Memes, typically the most reflexive sector during market rebounds, also lagged with a modest 1.24% gain, weighed down by certain tokens falling -2.54% and -1.80% respectively.

On the upside, the AI sector led the market with a 7.46% gain. TAO continues to drive the index higher and climbed 7.6% ahead of its halving next week. Layer 1 blockchains followed with a 6.45% move, powered by ETH and BNB, which make up 63% of the index and were up 6.6% and 5.2%, respectively.

ETF Flows

Flows tell a more cautious story. After five days of inflows, BTC ETF flows turned negative again with a modest -$14.9 million in outflows. ETH ETFs, however, saw a strong rebound with $140.2 million of inflows after two days of declines earlier in the week. Even so, flows have yet to show real conviction when set against the -$4.4 billion in net outflows seen across November.

Market Update: Monad

About one and a half weeks past the Monad TGE, it’s a good moment to assess how the chain is performing post-launch. After a strong initial rally, MON has cooled off and is down -28% on the week, leaving it up a modest 16% from its ICO price. On the ecosystem side, DeFi TVL continues to climb and now sits at $277.5 million.

A large portion of that TVL is concentrated in stablecoins. Around $144 million of the $277.5 million sits inside a stablecoin protocol, which is being farmed across various protocols to earn ecosystem incentives. Various platforms are deploying these assets across DeFi protocols such as Morpho, certain DEXs, and Euler. Morpho currently offers 4.5% APY on the stablecoin and 5.98% on USDC, with most of the yield coming from MON incentives rather than organic borrow demand. Incentives are an acceptable way to jumpstart early liquidity, but the real test will be whether Monad can attract DeFi applications that generate sustainable, organic yield once the incentive fire hose tapers off.

Looking at native apps, Monad’s native memecoin launchpad has been the breakout leader in both accounts and transactions since day one. However, its staying power is not guaranteed. Only two tokens launched there have crossed the $1 million market cap mark. Even the chain’s first community token is down more than 65% from its highs and sits at $4.5 million today. Not exactly the early momentum you would want for a vibrant meme ecosystem.

Other homegrown projects are gaining traction. An LST protocol has become the primary option on Monad. A new DEX is emerging as an alternative. An MMORPG has quietly put up strong usage numbers and ranked third by accounts and second by transactions.

On-Chain Activity

On the chain level, activity looks promising for a network this early. Monad generated $100,000 in fees over the last seven days, placing it ahead of chains like Avalanche and Ton. Daily transactions and active addresses have been hovering around 2.2 million and 117,000, respectively. These are respectable metrics for a chain that just came out of the gate.

But one data point stands out. Cross-chain bridge data shows that 75% of the assets bridged into Monad have already flowed back out to other chains. That is an early sign that users may be farming and rotating rather than sticking around.

Conclusion

For Monad, the next phase is all about conversion. Can the chain turn early speculative inflows into sticky liquidity and real economic activity? The metrics above are the ones worth watching closely to see whether this ecosystem can turn early hype into lasting traction.