Smart contract vulnerabilities pose significant risk to Monad in 2025

As Monad establishes itself as a high-performance Layer 1 blockchain with 10,000 TPS capacity, its smart contract ecosystem faces critical security vulnerabilities that demand immediate attention. The 2025 threat landscape reveals three primary attack vectors that particularly threaten Monad's infrastructure: reentrancy attacks, denial of service exploits, and unchecked external calls.

Reentrancy vulnerabilities enable attackers to repeatedly call withdrawal functions before state updates complete, draining contract funds. Denial of service attacks consume excessive gas or exploit expensive operations, rendering contracts unusable to legitimate users. Unchecked external calls rank sixth in OWASP Smart Contract Top 10 for 2025, contributing to approximately 50% exploit rates among vulnerable contracts and generating $550.7K in documented losses.

Analysis of 149 security incidents across 2024 revealed over $1.42 billion in cumulative losses, with smart contract flaws accounting for $263 million or 8% of DeFi losses. However, audited contracts demonstrated 98% fewer exploits from logic vulnerabilities. For Monad's rapidly expanding ecosystem supporting trading platforms and gaming economies, rigorous security audits and proper implementation of checks-effects-interactions patterns remain essential safeguards against these evolving threats.

Monad's testnet experienced a fake MON transfer incident, highlighting network security concerns

Monad's testnet experienced a fake MON transfer incident, highlighting network security concerns

Monad's testnet recently faced a significant security challenge when users discovered fraudulent MON token transfers occurring within the network. This incident raised critical concerns about the robustness of Monad's security protocols and the integrity of its blockchain infrastructure during the testing phase.

The fake transfer incident revealed vulnerabilities in the network's transaction verification mechanisms. Specifically, unauthorized MON tokens were being transferred between addresses without proper authentication, suggesting gaps in the consensus validation process. This discovery prompted immediate investigation by Monad's development team to identify the root causes and prevent similar occurrences.

As a high-performance Layer 1 blockchain designed to process transactions 100 to 1,000 times faster than competitors, Monad faces unique security trade-offs. The pursuit of enhanced speed and scalability sometimes introduces complexities that can potentially compromise transaction security if not properly managed. The testnet incident underscored this delicate balance.

In response, Monad implemented comprehensive security audits and enhanced its validation protocols. The development team took swift action to address identified vulnerabilities before mainnet deployment. This proactive approach demonstrates Monad's commitment to maintaining network integrity while delivering high-performance blockchain capabilities for decentralized applications. The incident ultimately strengthened Monad's security infrastructure ahead of full production rollout.

Centralized exchange risks remain a key threat, with Arthur Hayes predicting a potential 99% crash

Arthur Hayes, the renowned BitMEX co-founder, has sounded a critical alarm regarding Monad's tokenomics structure. Hayes characterized MON as a "typical venture token with an inflated FDV," warning that the project could experience a devastating 99% price collapse. His concerns center on the stark disparity between the token's fully diluted valuation and its circulating supply.

The core issue Hayes identifies stems from MON's token distribution model, where approximately 90% of the total supply remains locked. This creates a precarious scenario where early investors and project insiders could eventually flood the market as these tokens unlock, triggering cascading selloffs. The recent volatility validates these concerns, as MON experienced a 40% decline within three days, causing over $6 million in liquidations on decentralized trading platforms.

Hayes' skepticism reflects a broader market anxiety about centralized blockchain projects that prioritize venture capital backing over genuine price discovery. He explicitly called for Monad to unlock all tokens immediately to reveal the token's true valuation under current market conditions. This structural vulnerability, combined with limited circulation relative to maximum supply, exposes MON to the same boom-and-bust cycles that have plagued previous layer-1 projects, making Hayes' 99% crash prediction a reflection of fundamental tokenomics risks rather than mere speculation.

FAQ

What is mon coin?

MON coin is the native token of MON Protocol, a blockchain gaming ecosystem that enables decentralized governance and supports publishing native IPs and games on a decentralized network.

What is Donald Trump's meme coin?

Donald Trump's meme coin is $TRUMP, an official cryptocurrency launched in January 2025 before his inauguration. It's an Ethereum-based token that combines meme culture with Trump's brand.

What is mon in crypto?

MON is a cryptocurrency of the MON Protocol, a blockchain gaming ecosystem focused on decentralized governance and publishing games on Ethereum.

What is Monad coin used for?

Monad coin facilitates transactions, enables decentralized applications, and drives community engagement in its ecosystem. Its value depends on investor confidence and adoption.