Kunal Doshi

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Markets continued to claw back losses from Monday’s selloff, with BTC, the S&amp;P 500, and the Nasdaq up 2.52%, 0.22%, and 0.05%, respectively, yesterday. Even safe haven gold has given back some gains and is down -0.12% on the day as risk appetite improves.



The uptick came after a surprise <a href="https://tradingeconomics.com/united-states/adp-employment-change">decline</a> in private sector employment. Private employers shed 32,000 jobs in November, compared with expectations for job growth. This pushed the <a href="https://www.investing.com/central-banks/fed-rate-monitor">odds</a> of a rate cut next week to 85%, up from 80% a week ago. Microsoft dragged on the Nasdaq, falling more than -2% after reports that the company has <a href="https://www.tradingview.com/news/gurufocus:6c14c4ac7094b:0-microsoft-stock-falls-amid-slow-corporate-adoption-of-ai-solutions/">lowered</a> AI software sales quotas due to softer than expected demand.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1174" height="628" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=1024&amp;h=1024" alt="" class="wp-image-110254" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=1174 1174w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=80 80w" sizes="auto, (max-width: 1174px) 100vw, 1174px" /></figure>



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. The index was weighed down by PUMP and PENGU, which fell -2.54% and -1.80%, respectively, on the day.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1169" height="625" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=1024&amp;h=1024" alt="" class="wp-image-110255" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=1169 1169w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=80 80w" sizes="auto, (max-width: 1169px) 100vw, 1169px" /></figure>



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. L1s 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.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="950" height="365" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png" alt="" class="wp-image-110251" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=950 950w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=80 80w" sizes="auto, (max-width: 950px) 100vw, 950px" /></figure>



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.



<h2 class="wp-block-heading">Market Update: Monad</h2>



Now that we are about one and a half weeks past the Monad TGE, it is a good moment to step back and assess how the chain is actually 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 <a href="https://defillama.com/chain/monad">$277.5 million</a>.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=1024&amp;h=1024" alt="" class="wp-image-110257" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



A large portion of that TVL is concentrated in AUSD. Around <a href="https://defillama.com/stablecoin/agora-dollar">$144 million</a> of the $277.5 million sits inside Agora’s stablecoin, which is being farmed across various protocols to earn ecosystem incentives. Upshift holds $73 million and is deploying AUSD across DeFi protocols such as Morpho, Uniswap and Euler. Morpho currently offers 4.5% APY on AUSD and 5.98% on USDC, with most of the yield coming from <a href="https://app.morpho.org/monad/earn">MON incentives</a> rather than organic borrow demand. Incentives are an acceptable way to jump start 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, Nad.fun has been the breakout leader in both accounts and transactions since day one. It is Monad’s native memecoin launchpad, but its staying power is not guaranteed. Only <a href="https://nad.fun/">two tokens</a> launched there have crossed the $1 million market cap mark. Even Chog, the chain’s first community token, is <a href="https://nad.fun/tokens/0x350035555E10d9AfAF1566AaebfCeD5BA6C27777">down</a> 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 <a href="https://monadvision.com/ecosystem?day=1D">gaining</a> traction. FastLane has become the primary LST on Monad. Pinot Finance is emerging as an alternative DEX to Uniswap. Lumiterra, an MMORPG, has quietly put up strong usage numbers and <a href="https://monadvision.com/ecosystem?day=1D">ranked</a> third by accounts and second by transactions yesterday.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1332" height="602" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=1024&amp;h=1024" alt="" class="wp-image-110253" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=1332 1332w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=80 80w" sizes="auto, (max-width: 1332px) 100vw, 1332px" /></figure>



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. <a href="https://monad.socialscan.io/charts/tx">Daily transactions</a> and <a href="https://monad.socialscan.io/charts/active-address">active addresses</a> 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.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1599" height="432" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=1024&amp;h=1024" alt="" class="wp-image-110252" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=1599 1599w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=80 80w" sizes="auto, (max-width: 1599px) 100vw, 1599px" /></figure>



But one data point stands out. WormholeScan 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.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="728" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=1024&amp;h=1024" alt="" class="wp-image-110256" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



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



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