The influence economy of encryption KOLs: Are millions becoming a part of the 100 KOLs 'Play'?

The influence pyramid in the crypto market is even more controlling than traditional media.

Written by: rosie

Compiled by: AididiaoJP, Foresight News

We usually consider Twitter to be the most decentralized information network in the encryption field. Anyone can share alpha, build communities, and become a leader on Twitter. Users' rights can be fully protected and will not be restricted by the platform.

Then, the chilling fact is that only 100 Twitter KOLs can control the views of millions of people on encryption, such as which projects are being highlighted and where the funds are flowing. The crypto market, with Twitter as its core information network, has the highest level of centralized influence economy. Behind the seemingly egalitarian community, it is tightly controlled by a pyramid-like transmission network.

Moreover, the intricate influence pyramid in the crypto market is even more controlling than traditional media.

The Core KOL Circle on Twitter Promoting the Development of the Crypto Market

In the crypto field, Twitter is not a place for open and free communication; it is more like a series of concentric circles, where influence radiates disproportionately from the center outward.

Pyramid Level 1: KOL Leaders (5-10 accounts)

These accounts not only have fans, but also possess the network effects of being at the forefront. When they tweet, hundreds of accounts retweet and comment within minutes. KOL leaders can casually tweet, which may drive the growth of relevant tokens; in other words, their criticism can destroy projects, while support can instantly make a project the focus of the market.

This is similar to when NBA star Kobe tweets about a certain project; it not only attracts public participation but also draws the attention of institutions, interest from venture capital, and changes in market preferences.

Pyramid Level 2: Influence Amplifier (20-30 accounts)

These accounts turn the leaders' tweets into trends. They ensure that information reaches specific communities and covers venture capital firms, outstanding builders, and ecosystem leaders by quoting tweets, adding comments, and so on.

Pyramid Level 3: Echo Chamber (70-75 accounts)

Mid-level influencers who repeat the views of the first and second layers of the pyramid to the public. They rarely present new ideas but are crucial for expanding the narrative. Their job is to make the opinions of the leaders become the consensus of the community.

Others: The public consumes and reacts to the discussions about the selection of 100 Twitter KOLs in the pyramid.

How encryption narratives spread on Twitter?

The dissemination of narratives is not random, but predictable:

Step 1: Sowing

KOL leaders first share their views, insights, or new discoveries, which may be genuine alpha or marketing.

Step 2: Zoom In

Level 2 accounts reference tweets within 1-3 hours and add their own opinions, creating the illusion of independent discovery.

Step 3: Verification

Level 3 accounts continuously provide evidence to support a false consensus that is accepted by "all smart people" in the market.

Step 4: Mass Communication

Public accounts begin to share narrative snippets, which usually contain key nuances, but the core message remains unchanged.

Step 5: Institutionalization

Crypto media began citing "crypto Twitter sentiment" in articles, describing it as a widely accepted market consensus.

The entire cycle takes 24-48 hours, and when most people see the "trending" encryption trends, it is actually the influence economy that has determined its dissemination trajectory.

Business Model of Influencer Economics:

The influence transmission of KOL leaders is a complex business model:

Tokenization of Influence:

1. Disguise paid promotions as your unique viewpoints
2. Serve as a "consultant" for the project and promote it.
3. Obtain funding for meetings and events
4. Obtain sponsorship for the project and submissions of high-quality content from the community

Indirect value acquisition:

• Get project information and tokens in advance
• Favorable allocation in financing rounds
• Connect with top venture capital funds and founders
• Opportunity to obtain board positions and equity

Portfolio siphoning: Many top accounts are angel investors or advisors for crypto projects.

Systemic Bias in Crypto Influence

The centralization of influence by Twitter encryption KOLs has caused systemic bias:

• Geographical bias: Most tier-one accounts are located in the United States, creating a U.S.-centric global technology narrative.
• Network bias: Projects that are already connected with influential KOL leaders will receive a certain level of attention regardless of their technical advantages.
• Wealth Preference: Whale accounts can participate in exclusive trades, creating compounded advantages.
• Language bias: Systematic underrepresentation of non-English projects and communities.
• Professional bias: Financial engineering receives more attention than technological innovation because finance professionals are better at self-promotion.

Which content is promoted and which content is ignored

Analyzing cryptocurrency Twitter trends can reveal clear patterns that amplify economic choices of influence.

Vigorously Promote:

• New L1 blockchain (especially EVM compatible)
• DeFi protocol with a novel token mechanism
• Any project marked with "infrastructure" or "expansion"
• Infrastructure projects "built for developers"

Systematically ignore:

• Projects without token or venture capital support
• Non-financial speculative technological innovation
• Focus on technology rather than marketing projects
• Non-US domestic projects

Developers in the encryption field have started to focus too much on narratives and technologies that are fabricated or exaggerated by the community on Twitter, rather than on the factors that actually drive technological advancement, leading the industry into a vicious cycle.

The Illusion of Decentralization

KOL leaders on Twitter brand themselves as completely different from traditional media, but their influence and the way it is transmitted are surprisingly similar:

• Traditional media: A small number of editors decide which news to report, journalists further amplify the impact of these decisions, and the audience consumes the selected information.
• Twitter KOLs: A few KOL leaders decide which projects receive attention, while secondary/tertiary accounts amplify these decisions, and the audience consumes the selected information.

The main difference between the two is that the influence economy of crypto leaders on Twitter is less transparent in terms of power structure and financial incentives.

Downstream Effects

The concentration of influence among encryption KOL leaders will result in the following consequences:

• Capital allocation: Venture capitalists pay attention to the crypto market sentiment on Twitter when making investment decisions. Projects supported by crypto leaders receive the attention of venture capital, while those without support are ignored.
• Developer Focus: Developers will choose research directions based on the content that appears in the social information flow.
• Mass investment behavior: Millions of people make financial decisions based on narratives from 100 undisclosed and conflict-of-interest crypto KOL leaders.
• Media reports: Crypto journalists use Twitter sentiment as an indicator of importance, further accelerating the transmission of influence economy.

Break the Cycle

In order to cope with this situation, we need to remain vigilant at all times:

• For builders: without a marketing strategy, even the most outstanding technology means remaining unnoticed. Builders must either learn to play the game of influence or find allies who are willing to play the game of influence.
• For investors: Twitter's crypto sentiment is a lagging indicator of tier one account opinions, not a true reflection of market sentiment. When you see something trending on Twitter, the trend has actually already ended.
• For users: Pay attention to those crypto leaders who consistently share opposing views and technical depth, rather than just KOLs who focus on marketing and making money.
• Regarding the ecosystem: Recognizing that the excessive concentration of Twitter's encryption influence has undermined the decentralized system we originally aimed to build.

Bottom line

The encryption industry operates entirely according to market rules on Twitter. The issue is not whether influence networks exist (they always do) — but rather that not all crypto leaders on Twitter are valuable parts of the decentralized economy. In fact, there is a complex influence economy in the encryption industry, where crypto KOL leaders often act maliciously due to overly concentrated power and undisclosed economic incentives.