Behind the KOL Incoding: Is the Kaito Yap model really sustainable?

Author: Nianqing, ChainCatcher

Have you noticed that when I was browsing X these days, many KOLs I have been paying attention to have started to yap. What are you all in Yap?

Yaps is a points system launched by Kaito, an AI-driven encrypted data analysis and social incentive platform. X users can earn Yap points by publishing high-quality encrypted content (tweets, interactions). Recently, Berachain airdrops to Yapper and Yapper. Today, Kaito also announced that it would open the ANIME token claim to Yapper and Kaito Genesis NFT holders of the top 1,000 ANIME (Azuki’s anime project Anime token) Yapper and Kaito Genesis NFT holders, plus Story Protocol, Movement Labs, MegaETH and other projects cooperated with Kaito, and the expectation of "projects on Yap Kaito can get airdrops" has once again pushed Kaito's popularity.

Similar to the flywheel trajectory of Web3 social networking, KOLs and celebrities who have accumulated influence are like fish in the Yaps points system. They enjoy outputting articles on X and forming a matrix with other ICTs (Inner Crypto Twitter). The advantage is that there are more developments in the discussions about encryption and popular projects, and foreseeable disadvantages are gradually emerging, such as the flood of low-quality content, excessive interactions have caused harassment to KOLs, and deeper levels such as influence monopoly, Kaito Recently, it has also announced that it will soon launch a shadow ban to improve the current chaos through technical means. But the controversy and doubts continue.

In 2024, fundamental analysis faces a full-scale collapse in the encryption field, and the current market is increasingly confirming the saying "Attention in crypto is everything". If Meme is some result of the attention economy, Kaito is more like an upstream business of the attention economy, i.e. how to manage and distribute attention. But the essence of attention-based economy is that the next one is better. As a product of this era, can Kaito itself overcome short-term behavior and become a sustainable and practical product?

This article will analyze Kaito in detail. Because of the existence of Yap, there are currently many short essays about Kaito on X, but I still recommend you to read this article.

What is Kaito?

Kaito is an AI-driven encrypted data analysis and social incentive platform. According to the RootData page, Kaito completed two rounds of financing in 2023, namely a seed round of financing of US$5.3 million and a Series A round of financing of US$5.5 million. Investors include Superscrypt, Spartan, Dragonfly, Sequoia China, Jane Street, etc.

Founder and CEO Yu Hu graduated from Cambridge University and has worked in traditional financial companies such as Citadel and Deutsche Bank. In a recent podcast, Yu Hu revealed that he went to study in the UK after growing up in China, and then started a business in the United States and Singapore. Yu Hu is not a technical gull. He is very good at trading and believes that trading is the closest way to the market. Yu Hu also revealed in the podcast that Kaito achieved profitability in June 2024 and achieved over a hundred times growth last year.

Its core functions include:

1. Encrypted social data analysis: By crawling social data from public domain platforms such as Twitter (X) (such as interaction, attention map, and content dissemination), a KOL influence scoring model is built to provide project parties with quantitative marketing decision support. Currently, some of Kaito's features are charged. Its official website shows that the annual payment price for Kaito Pro personal subscription is US$833/month and the monthly payment price is US$1,099/month. Why is the price so high? Simply put, the cost of using the commercial API of the X platform is very high. Coupled with the restrictions on the number of calls by regulations, Kaito restricts user access through price increases and ultimately chooses the ToB mode.

Related Reading: " In-depth Analysis Kaito: How did the Yap event detonate the social flywheel? 》

2. Yaps points system: Users earn Yap points by publishing high-quality encrypted content (tweets, interactions). Points may be redeemed for tokens or other incentives (such as airdrops, cooperative project rewards) in the future. Kaito official emphasized that to prevent witches and manipulation, Yap points earning is not easy and does not rely on quantity to win. Yaps allocates only 25,000 users per day, but its total number of users has exceeded 250,000 (January data). Its scarcity can be imagined. With the rapid increase of users, the difficulty of Yap to earn has increased exponentially, which is very important. roll.

Yaps' algorithm mechanism is destined to be in the core circle of influence, KOL/big Vs will "become stronger and stronger", and it will be difficult for novices to break yap zero in the short term. Because its evaluation mechanism relies on reputation-weighted influence rather than original impressions or engagement, points may not be awarded if the cumulative eligible social engagement of a tweet does not reach a specific threshold.

The core principles of Yap points distribution are:

- Quality > Quantity: Spam content (repeat, no analysis) will be filtered by the system and the points will be zeroed.

- Hotspot orientation: Provide in-depth analysis around Kaito panel recommendation projects (such as Berachain, Monad, Xion).

- High-quality interaction: Interacting with big Vs about the content of the tweet itself (comments, likes) is more efficient than simply posting.

The summary is that only content that is popular, high-quality, valuable, and can truly trigger discussions in the crypto industry have the opportunity to earn points. In addition, you will also receive points rewards, but the condition for giving points is that you will receive Yap points for the new user.

3. KOL ratings and rankings: Dynamic ranking of KOLs is based on AI algorithms, forming "Yapper Leaderboard", and becoming a reference standard for project parties to screen cooperation partners.

Kaito did a good job of sifting out smart followers from the list of followers that may be flooded on the X platform, reducing the interference of the navy. This function essentially has strong commercialization capabilities, which largely solves the pain points of KOL marketing and provides quantitative standards for project parties through its own AI scoring mechanism. Based on the Yap points ranking list, high-scoring users are connected with the needs of the project party to form an "influence as a service" model. Project party can purchase the "influence" of users at the top of the list, which is more transparent than traditional KOL payments.

4. Yapper Launchpad: Yapper Launchpad is a platform launched by Kaito in January, aiming to decide on the launch project of the next Yapper ranking through community voting. Launchpad For projects that have not issued coins, users can participate in voting through Yaps, smart followers and upcoming on-chain assets to decide which projects will be included in the rankings. And yap around these listed projects to earn points.

Kaito 's explosive and attention economy

In 2024, fundamental analysis faces a complete defeat in the encryption field, and the current market is increasingly confirming the saying "Attention in crypto is everything".

If Meme is some result of the attention economy, Kaito is more like an upstream business of the attention economy, i.e. how to manage and distribute attention .

We can divide participants in the attention economy into:

Attention creators

Attention consumers

Attention distributors

Strictly speaking, Kaito is not a simple crypto data analysis platform, it is more like the role of an attention distributor, aiming to create a better network to efficiently allocate information, attention and capital. Kaito founder Yu Hu also made two judgments: 1. In the era of attention economy, personal brands will become more and more important; 2. In the era of AI, people will pay more attention to the connection between people.

Yap is the tokenization of "attention". The Yap to Earn model meets the strong demand for traffic and community participation in the crypto industry. This is also the biggest difference between Kaito and Friend.tech's "direct monetization of influence". Kaito's definition of influence should be more refined and sufficiently unity. As mentioned earlier, the scarcity of Yap points set at the beginning of the project directly determines the influence of the content in this space.

Of course, Kaito's popularity is also inseparable from the wealth effect. What is more important is that the events that constitute Kaito's wealth effect are not one-time or short-term behaviors. As an influence launch platform, Kaito's mechanism can greatly help to establish early-stage, unissued projects to expand consensus. Recently, Bear Link has issued airdrops to Kaito Yapper, as well as well-known projects such as Story Protocol, Movement Labs, Eclipse, and MegaETH have been launched on the Kaito launch platform, and has promised to include Yap points in the airdrop or incentive plan, thus attracting more users.

In addition, the valuation of Yap points is also given a higher valuation due to its scarcity and difficulty in obtaining it. Kaito doesn’t just reward creators with its own tokens. By participating in its ecosystem, you can also Farming multiple airdrop rewards from the top projects.

**But the essence of the attention economy is "next better", and Kaito

himself may not be able to escape the fixed number**

The other side of the wealth effect is speculation. Kaito's Yap competition does provide creative motivation for creators and content producers, but it also brings about the flood of low-quality content. Many KOLs complain that Twitter information flow is polluted by Yap, and even threatened to "see one block the other" . Although Kaito is about to launch a Shadow Ban to limit low-quality content, I think what Kaito should do more is community education and constantly emphasize the rules of Yap.

In addition, Kaito Yap's algorithm has a black box, and although the scoring criteria exist, they are very vague. In addition, the current algorithm is obviously tilted towards KOL, because the measurement mechanism of Smart Follower exists, and the core influence circle monopolizes most of the Yap points, and it is very difficult for novices to break zero. @Tang Huabanzhu once commented that Kaito is not a credible Twitter X evaluation system, it is at best a KOL matrix hair picking platform. The so-called screening of high-quality content has essentially become a popular project on Kaito if you want to get points." This also leads to excessive concentration of chips in the hands of Yapper at the head.

Yu Hu once mentioned in an interview that his goal is to financialize everything through Kaito, allowing market forces to decide, such as users voting to decide which project to go online to Launchpad. But is market power absolutely correct?

KOL @Bear Cookies.eth 's judgment on this is that Kaito's popularity will decline. He mentioned that because the voting mechanism of Kaito project gradually evolved into a queuing and launching, the lack of motivation for "bribery" without survival of the fittest has led to a tide of attention from Yap players on the Kaito Launchpad project. In addition, the current algorithm is not friendly to retail investors, Kaito may lack motivation for its long-term development.

The attention economy itself is destined to be a short-term behavior. Past history tells us that after losing fundamental support, the narrative of the crypto market will completely become the "next better". Kaito may become a sustainable business model, but what is its real significance to the crypto market? Is it aiding short-term hype or to promote greater interaction and consensus in the crypto market? As the wealth effect decreases and attention shifts, how should Kaito avoid following the old path of Web3 social interaction such as Friend.Tech?

Kaito founder Yu Hu has a great ideal. He hopes that Kaito's ultimate goal is to make users forget the existence of the Yaps system and make outputting opinions a habit. Perhaps this is the value of a product.