Analyzing Kaito: A Combination of Information Flow and Capital Flow

Flipping through the history of cryptocurrency, every page seems to be filled with the "dream of getting rich." Upon closer examination, however, one discovers that hidden between the lines are the words "retail investors."

Crypto Twitter(CT) has become an important front for Chinese crypto community. As a technology and data practitioner, I focus more on the project itself than on hot topics. However, there is a growing trend of "verbal hype" on CT, and the Kaito project is a prime example of combining KOL marketing with the concept of "wool picking".

Kaito has successfully built a communication platform between project parties and KOLs, similar to internet products like Meituan, becoming another project that can continue to operate after issuing tokens, following StepN. Although not completely original, Kaito has gathered the essence of Chinese information flow from the past decade.

! [Deconstructing Kaito: Twitter's InfoFi "Standard Piece"?] ](https://img-cdn.gateio.im/webp-social/moments-4f26510b0fc842a7134483480f5a4fcb.webp)

Group Chat Era: 2018-2021

In 2018, the rise of the "Three O'Clock Community" marked the beginning of the KOL era of professional content production. WeChat groups and AMAs became mainstream marketing methods, with founders communicating directly with potential "community members". The participation of well-known investors, just like the purchase of BAYC NFTs by well-known investors many years later, marks the recognition of niche public opinion by the mainstream.

Although there is a first generation of KOLs, the "Thousand Media Wars" are still dominated by traditional media forms. The market recognizes the combination of traditional media people + brands, and a number of crypto media have risen and obtained financing. Among them, the performance of a well-known media is particularly outstanding.

The period before May 19, 2017, was the best time in the cryptocurrency industry, worth remembering forever.

The Brief Glory of Twitterscan: 2022

The regulatory policies on May 19, 2021, forced the cryptocurrency industry to go overseas, and Chinese media lost their information advantage. The overseas cryptocurrency market is gradually becoming mainstream, and Chinese media need to reposition themselves.

The rise of KOL trends has seen the emergence of technology and investment research KOLs first. In-depth research represented by Pan Zhixiong and Blue Fox Notes has become mainstream. However, with events such as the bankruptcy of FTX and the collapse of Luna-UST, the market has entered a trough, and the narrative around technology has gradually collapsed.

Twitterscan raised $4.56 million in funding in September 2022, attempting to help users discover market trends by organizing crypto users and content on Twitter. However, its business model is difficult to close the loop, and it cannot persuade users to pay for publicly available information a second time.

! [Deconstructing Kaito: Twitter's InfoFi "Standard Piece"?] ](https://img-cdn.gateio.im/webp-social/moments-94b53db5345240408d029ceee23a8e18.webp)

Friend Tech: An Attempt at Capital Entrepreneurship (2023)

In 2023, Friend Tech(FT) conducted its first stress test on the monetization capabilities of KOLs. FT encourages KOLs to trade their "influence" and even to create false influence among each other to stimulate trading volume. As the first blockbuster application on the Base chain, FT's daily active users once exceeded 100,000.

However, the popularity of FT came quickly and went just as fast. From August 10 to September 1, daily income dropped from 1165 tokens to almost none. The failure of FT proves that the content itself struggles to directly bear the impact of trading, and the SocialFi model is difficult to sustain.

! [Deconstructing Kaito: Twitter's InfoFi "Standard Piece"?] ](https://img-cdn.gateio.im/webp-social/moments-19a1600a9f9df03539f7e486cea2b2f5.webp)

Kaito: Fusion and Innovation(2024-2025)

Kaito initially focused on AI search, then shifted to KOL ranking. Its success lies in:

1. Separate information flow and capital flow, and KOLs focus on improving rankings.
2. Introduce Yap non-tokenized charts to control sentiment and popularity.
3. Become a standardized agency that connects project parties, exchanges, and KOLs.

Kaito promotes the involution of the KOL industry and occupies an important position in the market. However, $LOUD events show that streaming platforms still face challenges when it comes to tokenization.

In the future, Kaito needs to explore products that can directly convert information flow into transactions. This is both simple and complex: simple in that the direction is clear, complex in that the recognition of the value of information flow by encrypted users is still not high.

! [Deconstructing Kaito: Twitter's InfoFi "Standard Piece"?] ](https://img-cdn.gateio.im/webp-social/moments-ea0458f6ece4130d1d723c06adb0b08e.webp)