I just set up xmonad because I was in the mood for change. Took about a week of tinkering a bit each day and I really like it. Afterwards, I was still in the mood for configs and looked at Wayland. There isn't much progress on Wayland xmonad, so guess that has to wait.
That's a common problem I've been hearing for almost 10 now - the software support isn't quite there yet.
I've never used xmonad but it looks like a generic tiling window manager based on a quick Google. There are tons of those for Wayland, with Sway and Hyprland seemingly leading the charge.
I don't think xmonad has the development power or the interest to rewrite their X11 window manager into a Wayland compositor. That doesn't mean there aren't any replacements that have been designed from the ground up to work with Wayland, though.
The main draw of xmonad is that you can modify pretty much everything, as the config itself is a Haskell file (the entire thing is written in Haskell). There are tonnes of modules to use, you can define your own window layouts and add whatever functions you can dream off - I haven't seen any other window manager offer this kind of freedom (with the added joy of learning Haskell!).
As for the second point, about half a year ago, they started doing exactly this. Rewriting xmonad for Wayland. Guess I'll sit this one out.