Monad just cranked up the yield farm dial to $75,000 a week for its AUSD stablecoin pool. On the surface, it‘s a bullish signal for the upcoming L1—more TVL, more liquidity, more hype. But if you’ve been through the 2021 DeFi summer, you know the pattern: high incentives mask deep structural fragility. Code is only as strong as the trust it protects, and trust built on subsidies is trust built on sand.
I remember sitting in a cramped library at Zhejiang University in 2017, organizing a blockchain literacy circle for non-technical peers. We’d spend hours dissecting ICO whitepapers, and the pattern was always the same: projects that offered the highest “bonuses” were the ones that collapsed fastest when the hype faded. Fast forward to 2025, and the lesson hasn‘t changed. Monad’s decision to boost Agora AUSD incentives to $75k per week is a textbook liquidity mining play, and as an open source evangelist who has watched this movie too many times, I feel a familiar unease.
Let‘s break down what’s really going on. Monad is a parallel EVM L1 designed to scale Ethereum efficiently. Its team, backed by heavyweights like Paradigm and Dragonfly, has a strong technical reputation. The project is still in testnet phase, with mainnet expected later this year. Agora is a stablecoin issuer, and AUSD is their dollar-pegged token. The incentive plan: offer $75,000 weekly to liquidity providers who supply AUSD to a dedicated pool—likely on a DEX like Uniswap or a Monad-native AMM. The goal is to bootstrap liquidity depth so that when mainnet goes live, there’s already a robust stablecoin market.
It‘s a classic “build it and they will come” approach, but with a twist: the “they” are mercenary capital. In my years auditing tokenomics for DAOs and advising DeFi protocols during the bear market, I’ve seen this story end poorly more often than not. The core issue is sustainability. $75k weekly for a testnet with zero organic users is a massive burn rate. Where does that money come from? Likely from Monad‘s treasury or from future governance token allocations. If it’s the latter, that‘s a ticking time bomb—every dollar of incentive today is a dollar of sell pressure tomorrow.
Let’s run the numbers. Assume the pool targets a total liquidity of $100 million. That‘s a weekly yield of 0.075%, which annualizes to roughly 3.9% APR. Not spectacular for a stablecoin, but if the pool is smaller—say $10 million—the APR jumps to 39%. That’s juicy enough to attract yield farmers. But here‘s the catch: those farmers are loyal to the yield, not to the network. The moment the incentive pauses or a better opportunity appears elsewhere, they pull their liquidity. I’ve seen pools lose 80% of their TVL within 48 hours after incentive cuts. The result is a false signal of ecosystem health.
During the 2022 bear, I launched a weekly webinar series called “DeFi for Humans” to help anxious community members navigate smart contract risks. One recurring lesson was that liquidity mining programs are often Trojan horses for unsustainable tokenomics. Monad might be different, but the pattern is so ingrained that I feel obligated to cry foul. The project is essentially paying users to use a stablecoin that has no proven demand. It‘s not building trust; it’s renting attention.
The Contrarian Angle
You might argue that all new L1s use incentives to bootstrap liquidity—Solana did, Avalanche did, and even Ethereum had its liquidity mining phases. That’s true, but those incentives were paired with real utility. Solana had a vibrant NFT ecosystem and low transaction costs. Avalanche had subnets and gaming. Monad‘s mainnet is not even live, so the $75k is essentially a pre-launch marketing expense. The risk is that this expense creates an illusion of traction, leading the team to make premature decisions based on inflated metrics.
Another counter-intuitive point: the very act of boosting incentives could undermine Agora AUSD’s credibility. Stablecoins derive their value from trust in the issuer‘s ability to maintain the peg. If Agora relies on artificial incentives to generate demand, it suggests the peg can’t stand on its own. Compare that to USDC, which has deep institutional integration. Circle can freeze any address within 24 hours—a compliance-first strategy that I believe is its biggest risk—but at least there‘s real-world utility behind it. Agora has neither the compliance network nor the organic demand. It’s a stablecoin that exists solely because someone is paying you to use it.
The Sustainability Trap
Let’s be blunt: Monad‘s incentive plan is a short-term crutch. If the team intends to run this program for more than three months, the treasury burn becomes a serious concern. $75k per week equals $3.9 million per year. That's not trivial for a project that hasn't yet generated any protocol revenue. Even with a $1 billion valuation, that's a 0.39% dilution per year—manageable but not negligible. The real issue is what happens when the incentive stops. Will AUSD have enough organic demand from lending protocols, margin trading, or payments?
In my experience bridging the NFT community gap in Hangzhou, I learned that sustainable ecosystems are built on shared values and utility, not on subsidies. The NFT DAO I worked with used on-chain reputation to reward contributors, not just liquidity. That's why Soulbound Tokens (SBT) have remained a concept for three years—no one wants their credit record permanently on-chain, but also because people want earned status, not bought status. Similarly, liquidity that is bought will be sold at the first sign of trouble.
What the Market Hides
In a bull market, euphoria masks technical flaws. Readers are FOMOing into every new L1 announcement, and Monad’s brand is strong. The $75k number sounds impressive, but it‘s a distraction from the fundamental question: Does the Monad ecosystem have a real need for a new stablecoin? Could Agora AUSD be replaced by a bridged USDC once mainnet goes live? If so, the incentive is just an expensive way to test infrastructure, not to build a moat.
Looking Forward
The true test won’t come with the first week of high APR. It will come when the incentive program ends, and the community votes on whether to extend it. If the decision is made transparently through a governance proposal, with clear metrics for success, that‘s a positive sign. If it’s extended indefinitely because the team fears losing TVL, that‘s a red flag. Monad’s team is strong, but strong teams can still fall into the trap of vanity metrics.
Takeaway
Bridges aren‘t built with subsidies, they’re forged with trust. Monad has the talent and the backing to become a major L1, but this $75k weekly incentive is a test of its values. Will the team prioritize sustainable, authentic growth, or will it chase the mirage of inflated TVL? I choose to believe in the former, but I‘ll be watching the on-chain data closely. Trust isn’t compiled, verified, and shared—it's earned over time. For now, the $75k question remains unanswered.
