The Evolution of Information Flow in the Crypto Assets World: From WeChat Groups to Kaito

The history of Crypto Assets is full of ups and downs. Each page seems to tell the dream of "getting rich quick," but upon closer inspection, we find that what it contains more is the shadow of "speculators."

Crypto Twitter (CT) is not a medical device, but rather an abbreviation for Crypto Twitter. As an industry observer, I often focus more on protocols and data rather than trending topics or gossip. However, I have noticed that "verbal hype" on CT has become a significant feature of the Chinese Crypto Twitter community.

The Kaito project has piqued my interest as it cleverly combines the marketing strategy of key opinion leaders (KOL) with the concept of "sheep shearing". Kaito has successfully built a communication platform between the project team and KOLs, similar to certain well-known internet products, becoming another project that can continue to operate after issuing a coin, following a certain running-to-earn project.

Kaito is not a completely original concept product. From media year frames to promoting competition among KOLs, Kaito is essentially a culmination of the development of Chinese information flow over the past decade.

Era of Group Chats: 2018-2021

The now mainstream Crypto Assets ETFs, stablecoins, and DeFi may seem unfamiliar to many early participants. At that time, the Crypto Assets world was much simpler, centered around Bitcoin and mining. Although it lacked diversity, people firmly believed that Bitcoin would eventually appreciate in value.

Although the origin of professional content production (i.e., KOLs primarily based on user-generated content) can be traced back further, the industry generally considers a certain community in 2018 as the official start of this trend. Since then, various instant messaging groups and online Q&A activities have become the main marketing methods for several years, with founders engaging in face-to-face online communication with potential "community members."

The participation of a well-known investor has become a symbolic event that marks the recognition of this niche public opinion feast by the masses, similar to another investment tycoon purchasing a well-known NFT project years later.

If described using terminology commonly used in the Crypto Assets industry, online Q&A is a method of issuing information assets, instant messaging groups are launch pads, and a certain community is equivalent to a well-known trading platform at that time, collectively forming the collective memory of Bitcoin's first real bull market after 2017.

Although early KOLs had emerged at that time, the "Battle of Thousands of Media" was still dominated by traditional media for two main reasons: first, the market's recognition of KOLs' distribution capabilities was not high; second, it was the tail end of the entrepreneurial peak period in the self-media industry triggered by a certain instant messaging platform's public account.

In other words, the market recognizes the combination of traditional media personnel and media brands more. Several crypto media outlets have either gone independent or secured financing, among which a particular media outlet has performed exceptionally well, being one of the best crypto media outlets during the same period, having been founded in 2017.

The period before May 19, 2017, can be said to be the most glorious era of Crypto Assets, worthy of eternal remembrance.

The Brief Prosperity of Twitterscan: 2022

On May 19, 2021, a ban forced the migration of the encryption industry. In practice, entrepreneurs and mining machines went overseas; in spirit, the crypto community experienced a transition from a certain Weibo platform to Twitter, which completely shattered the information advantage of Chinese media.

Prior to this, the founder of a well-known exchange secretly invested in a certain media outlet, the founder of a public blockchain personally flew to Shanghai, and the founder of a public blockchain learned to use a certain instant messaging tool. Under this structure, Chinese media even holds an advantageous position, possessing the world's largest computing power market and consumer market, and there is no need to publish content on Twitter.

However, after May 19, the situation changed dramatically. Crypto Assets gradually became mainstream overseas, with Silicon Valley and Wall Street gradually controlling every link from venture capital to listing coins, and Chinese media had to learn to lower their stance to deal with overseas project parties.

A key variable is that a certain high-quality media also disappeared with the ban, and the top content producers and disseminators vanished after becoming wealthy, leaving bewildered Twitter Chinese crypto users.

The KOL trend has just begun, and KOLs oriented towards technology and investment research are the first group of successful individuals. At that time, certain well-known figures were the main force in content output, and in-depth research represented by certain analysts became mainstream.

KOLs who work as KOLs are just getting started, but everything changed starting in 2022.

1. A certain exchange went bankrupt, a certain stablecoin collapsed, and regulations on centralized exchanges became stricter, leading the market into an absolute low point, making it difficult for even the best project analysis to justify itself.

2. The technical narrative is gradually collapsing, and the gap between the ultra-high financing amounts and the actual delivery results is becoming increasingly larger, which will completely explode only in 2024.

The dual collapse of research and technology has finally brought the KOLs, who make a living as KOLs, to their moment of glory, represented by Twitterscan. In September 2022, Twitterscan completed a financing round of 4.56 million dollars, and the participation of a well-known investment institution has won it widespread recognition.

The product concept of Twitterscan is not complicated. By organizing crypto users and content on Twitter, it helps users discover market trends. However, Twitterscan faces a fatal problem: how to complete the business closed loop?

Referring to the monetization methods of certain data analysis platforms, profits can only be obtained through paid APIs, tiered users, and other means. Clearly, Twitterscan finds it difficult to persuade users to pay again for Twitter information that is already public.

A subsequent project seems to have drawn some experience from Twitterscan - it must be commercialized and must introduce token economics.

Chip-oriented Friend Tech: 2023

A certain social finance project in 2023 is not far from now; it is the first stress test of KOL monetization capability, while a certain subsequent project is the second.

The project team has completely deviated from Twitterscan's information flow display direction, encouraging KOLs to trade their "influence" and even create false influence among each other. This is not surprising, as FOMO sentiment is a catalyst for trading volume.

This project is also the first blockbuster application launched after a well-known exchange introduced a new public chain, and it is, in my impression, the last large application successfully developed by anonymous developers. According to a certain data platform, the project's daily active users once exceeded 100,000.

Although the number of addresses does not equate to the number of users, I believe this data is relatively accurate. The English Twitter of a certain subsequent project may rank high, but its influence is obviously not comparable to that of the project. Globally, the Crypto Assets users come together, and there are about 100,000 active users.

From August 10 to September 1, the project fell from a peak daily income of 1165 coins of a certain Crypto Asset to a mere few. Although it saw several recoveries thereafter, even accepting investments from a well-known investment institution and planning to issue tokens in 2024, it was just a replay of the clichéd plot seen in some other projects.

This project helps us prove:

1. The content itself is not valuable; as a trading subject, it can only serve as an intermediary for the flow of information and capital, and cannot directly withstand the impact of transactions.

2. The social finance model has repeatedly failed: from certain early projects to some emerging platforms, the crypto assets space currently only has "asset issuance" as a replicable model.

Twitterscan indicates that pure information flow has no future, and the project tells us that pure capital flow can last at most two to three weeks, but they explore more information together:

1. Encrypting Twitter messages is very valuable, but it requires a method; it is best to separate the information flow from the capital flow.

2. The subsequent shift of entrepreneurship towards KOLs is an inevitable trend, as KOLs occupy the middle ground between exchanges, project parties, and retail investors.

Kaito: Advancing by Retreating: 2024-2025

There is a misconception that Kaito initially had little relationship with the KOL business.

Kaito is a product of the direct response from the Crypto Assets circle under a certain AI craze. In February 2023, a certain AI system shocked the world, and generative AI seems to have the momentum to take over everything. After experiencing internal turmoil in 2022 and the collapse of the metaverse bubble, the Crypto Assets sector is eager to leverage AI to rejuvenate itself.

Kaito's initial business model was AI search, but it was more focused on Crypto Assets content. There are similar projects, but Kaito seems to have realized that something was not quite right.

1. Traditional blockchain explorer tools have high research and development costs, poor profitability, and intense competition;

2. The information analysis tools are not very useful, especially when it comes to discovering information, and Twitter has not solved this problem.

During the early development of Kaito, the most notable aspect was the long-term internal testing, where invitation codes were once extremely scarce. It is meaningless to determine when Kaito shifted to KOL rankings, as a subsequent project's success prompted KOLs to actively participate in the competition.

Kaito relies on product strength rather than time advantages to attract KOLs. Before a certain project, encryption KOLs had been surrounded by bots and junk information for a long time since the specialization and commercialization in 2022, and Kaito was the first to give "real KOLs" an opportunity to stand out.

Boldly speculating, Kaito may not fully rely on algorithms to complete KOL ranking and points calculation; human factors may be more effective than AI. After all, there are not many crypto Twitter KOLs, and according to the 80/20 rule, within the statistical range of 1000-10000, human effort is still competent.

Therefore, Kaito completed the following three steps:

1. Separate the information flow from the capital flow; KOLs only need to improve their rankings, and a certain function will naturally emerge. Bots and fake follower accounts will be excluded, and project party marketing can identify KOLs through this function.

2. A certain feature does not involve tokens; it resembles a market fairness leaderboard. Although some may manipulate the rankings, it is mainly KOLs doing so, and the sentiment and popularity are controllable. At the same time, KOLs will attract the attention of project parties and exchanges, completing the most crucial step: directing the information flow towards the capital flow.

3. Kaito has ended the glorious era of traditional agencies. Kaito has actual business operations, which is fundamental to its ability to maintain its business model even after issuing tokens. Kaito itself is the largest and most standardized agency in the market.

However, a certain event proved that information flow platforms still face difficulties in exploring more tokenization attempts beyond airdrops, staking, and listing on exchanges. A certain project can continue to split small caps, but information flow platforms are still severely restricted.

As for information finance, certain new features, and other industries or business lines, they have not created new frontiers beyond the core functions, so there is no need to elaborate further on this.

In summary, Kaito has successfully promoted healthy competition among KOLs, occupying an indispensable role in the market. Even if a large exchange comes to seize the market, the effect may not be ideal. As the saying goes, the fair value of the market is difficult to measure, and the social functions of a certain exchange have not surpassed encryption Twitter, which is evident.

Conclusion

What is Kaito's next step?

In simple terms, it is a product that can bridge the flow of information and the flow of funds, directly generating transactions based on the flow of information.

But this is also very complex, because crypto users do not truly recognize the value of information flow; liquidity will only follow liquidity itself.