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Sleeping mons initially cost closer to 100 to wake up, but the longer they're asleep, the more you have to pay to wake them up? It's as if their HP continues ticking down even after they've fainted. You aren't making coin off them when they're asleep, so making it cost more and more sounds like a good way to run the risk of eventually not being able to afford anything.

That's correct, but it has a limit. The game offers more ways to earn money, and more are coming soon. You can sell furrymons on the global market, play minigames, etc.