MON Protocol - Primed for IP Expansion

Introduction

Gaming tokens have been in a brutal downtrend, with many projects struggling to sustain momentum amid weak market conditions. However, periods of max fear often present the best opportunities, especially for projects with strong fundamentals and enough funding to sustain market downturns. Despite its price decline, MON Protocol stands out with its large treasury, proven team, softening vesting schedule, and continued, transparent progress over the last 18 months.

After launching with massive hype at a $400M FDV, the MON token proceeded to drop to $25M FDV over the following 10 months. During this time, the team has drastically narrowed its focus, choosing to prioritize the development of its flagship game, Warden’s Ascent, driving value across the MON Protocol and testing the mini-game waters with two outsourced projects. Backed by a $35M+ cash treasury and a burn rate low enough to sustain them past 2028, they have the luxury of being able to prioritize Web2 growth over the much more niche Web3 total addressable market (TAM) that comes with additional baggage and expectation debt.

In this report, we’ll explore the current state of the IP, Warden’s Ascent’s progress, MON Protocol’s broader ambitions to expand its IP beyond gaming and Web3, and why MON ultimately looks compelling at these levels.

A Bet Across Gaming

MON Staking Mechanism

MON Protocol has one of the most unique staking mechanisms in Web3 gaming. The team leveraged its early questing platform to secure token allocations – typically between 0.1% and 0.5% at TGE – from over 100 projects in exchange for user engagement. Currently, 11.5% of MON’s supply is staked, translating to approximately $3.3M at today’s prices. So far, over $7M in rewards have been distributed to stakers via 36 projects, with 65+ partners yet to TGE, setting up a continuous stream of TGE’s driving value to stakers.

Consequently, at current prices and staking participation, rewards from 36 partner projects have already generated a 210% return. However, it is important to note that the average staker’s entry price remains – sometimes significantly – higher than the current 25M FDV, as MON is down roughly 90% from its peak.

This model allows MON holders to gain exposure to a wide range of exciting gaming projects, such as Project O, KGen, and Avalon. As more of these games launch, MON’s staking ecosystem could increasingly serve as a proxy bet on the broader gaming sector.

Liquid Tokens are Increasingly Attractive

Interest in Web3 gaming peaked in early 2024 and has been steadily declining since. While investors previously had to chase exposure through overly expensive pre-TGE rounds or inflated liquid token valuations, the landscape has now shifted.

A handful of well-capitalized teams like Ronin, Mythical, Open Loot, and MON Protocol have now had their tokens live for months, re