Analyzing the Evolution of Crypto Assets Market from a Historical Perspective

The history of the Crypto Assets market is full of ups and downs. Turning the pages of this history, we find that each page is imbued with the temptation of "quick riches." However, upon closer examination of the meanings behind these words, we discover that the real protagonists are actually the ordinary investors.

Crypto Assets social media ( CT ) has become an important part of this industry. As a practitioner focused on technology and data, I find myself paying more attention to the projects themselves rather than following trends.

Recently, a new marketing model has emerged on CT, combining key opinion leaders (KOL) with project promotion. This model has been standardized and systematized by certain platforms.

These platforms have successfully built a bridge between project parties and KOLs, similar to some successful cases in the traditional internet industry. They have maintained strong vitality even after the bull market of Crypto Assets.

This model is not completely original; rather, it gathers the essence of Chinese information flow from the past decade. It integrates multiple elements such as media timelines and KOL competition.

Era of Group Chats: 2018-2021

The now well-known Crypto Assets ETF, stablecoins, and DeFi may be quite unfamiliar to early participants. At that time, the crypto space was more straightforward, centered around Bitcoin and mining. Despite the lack of infrastructure, people firmly believed that Bitcoin would eventually rise.

Although Louis XVI lost his head, the KOL based on user-generated content (UGC) had a clear starting point.

It is widely believed in the industry that the 3 o'clock community in 2018 marked the beginning of this era. Since then, WeChat groups and AMAs have become mainstream marketing methods for founders to communicate directly with potential "community members."

The joining of a well-known investor symbolizes that this niche event has gained mainstream recognition, just like many years later when another investment tycoon purchased a well-known NFT project.

AMA can be seen as a way to issue information assets, with WeChat groups serving as its launch pad, and the 3 o'clock community being equivalent to the mainstream trading platforms of that time. This forms the core memory of the first real bull market for Bitcoin after 2017.

Although early KOLs had already emerged at that time, the "Battle of Thousands of Media" was still dominated by traditional media forms. This is mainly due to two reasons: first, the market had low recognition of KOL's distribution capabilities; second, it was just at the end of the peak period for entrepreneurship in the self-media industry.

In other words, the market recognizes the combination of traditional media professionals and media brands more. Several well-known Crypto Assets media have established themselves or received financing, among which one media's performance is particularly outstanding.

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

The Brief Prosperity of Twitterscan: 2022

On May 19, 2021, a policy led to a large-scale migration in the Crypto Assets industry. Since then, Chinese media has lost its information advantage.

Before this, international project teams had to actively communicate with Chinese media, as China has the largest computing power and consumer market in the world. However, after the policy changes, the situation reversed, and Chinese media had to lower their stance to deal with overseas project teams.

A key variable is that a top Chinese media outlet has also disappeared, leaving a confused group of Chinese Crypto Assets Twitter users.

The trend of KOLs only truly emerged, with those focusing on technology and investment research being the first to achieve success. At that time, certain well-known crypto figures were the main contributors of content, and in-depth research became mainstream.

KOLs who make a living as KOLs are just starting out, but since 2022, the situation has changed dramatically.

1. The occurrence of multiple major events has caused the market to fall into a trough, making it difficult for even the best project analyses to hold water.

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

The dual collapse of investment research and technology has created opportunities for professional KOLs. The financing of Twitterscan is a typical case.

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

Referring to the monetization methods of similar products, Twitterscan finds it difficult to convince users to pay for publicly available information that has been processed a second time.

Some later projects learned from the lessons of Twitterscan and realized that they must commercialize and introduce token economics.

Friend Tech: The Social Token Experiment of 2023

The Friend Tech of 2023 is still fresh in our memory; it was the first major test of the monetization ability of KOLs.

Unlike Twitterscan, Friend Tech encourages KOLs to trade their "influence" and even create false influence among each other. Although this practice is controversial, it has indeed stimulated trading volume.

Friend Tech is the first blockbuster application launched by a well-known public chain and also the last large-scale project successfully developed by anonymous developers. According to data, its daily active users once exceeded 100,000.

Although the number of addresses cannot equate to the actual number of users, considering the scale of active users in the entire Crypto Assets space, this data is still quite reliable.

The rise and fall of Friend Tech provides us with important insights:

1. The content itself is difficult to directly monetize; it is more suitable as an intermediary for information flow and capital flow.

2. Social finance ( SocialFi ) models have repeatedly failed, and currently, it seems that the "asset issuance" model is the only viable approach in the crypto space.

The experiences of Twitterscan and Friend Tech tell us:

1. The encryption of information on Twitter is very valuable, but it requires appropriate utilization methods; it is best to separate the information flow from the capital flow.

2. The future direction of entrepreneurship will inevitably shift towards KOLs, as KOLs are positioned in the middle ground between exchanges, project parties, and retail investors.

Kaito: Strategy Adjustment for 2024-2025

A common misconception is that Kaito initially had little to do with the KOL business.

Kaito is actually a product of the AI wave in the Crypto Assets field. In February 2023, the emergence of ChatGPT sparked a frenzy for AI in the Crypto Assets industry. After experiencing internal issues and the collapse of the metaverse bubble in 2022, the Crypto Assets industry urgently needed the support of AI.

Kaito's initial business model was AI search, but it was more focused on Crypto Assets content. However, Kaito seems to have realized the limitations of this path.

1. The development cost of traditional blockchain explorer tools is high, profitability is poor, and competition is fierce.

2. The practicality of the information analysis tools is not strong, especially in terms of information discovery capabilities, Twitter has not solved this problem.

Kaito underwent a long internal testing phase during its initial development, which was extremely rigorous. It no longer matters when Kaito shifted to KOL ranking, as the success of a similar project prompted KOLs to actively participate in the competition.

Kaito relies on product strength, rather than first-mover advantage, to attract KOLs. Before the previous projects emerged, Crypto Assets KOLs had been surrounded by bots and spam information for a long time since the professionalization and commercialization in 2022, and Kaito has given the "real KOLs" the opportunity to stand out for the first time.

Boldly speculating, Kaito's KOL ranking and points calculation may not be entirely dependent on algorithms; human factors might be more important than AI. After all, the number of KOLs on Crypto Twitter is limited, and according to the 80/20 rule, it is still feasible to statistically analyze and evaluate 1,000 to 10,000 accounts.

Therefore, Kaito has adopted the following three-step strategy:

1. Separate the information flow from the capital flow, KOLs only need to focus on improving their rankings, and certain ratings will naturally follow. Robot accounts and fake follower accounts will be excluded, and the marketing team of the project can identify truly influential KOLs through ratings.

2. The scoring system does not involve tokens and is more like a fair market ranking. Although there may be some human manipulation, the main competition is between KOLs, and the emotions and popularity are relatively controllable. At the same time, KOLs will attract the attention of project parties and exchanges, achieving the conversion of information flow into capital flow.

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

However, a certain incident proved that information flow platforms still face significant challenges in exploring more tokenization attempts beyond airdrops, staking, and listings. Some DeFi projects can continuously split small-cap tokens, but the options for information flow platforms remain very limited.

As for new industries or business lines such as InfoFi, Kaito Connect, and Kaito Pro, they have not created new boundaries beyond the existing rating system, and I will not elaborate further on this.

In summary, Kaito successfully promoted healthy competition among KOLs and occupies an indispensable role in the market. Even if some large exchanges attempt to enter this field, the results may not necessarily be good. As mentioned earlier, the fair value of the market is difficult to measure, and the social functions of a certain large exchange have not surpassed Crypto Assets Twitter, which is clear evidence.

Future Outlook

What is Kaito's next development direction?

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 it's not easy to achieve, as encryption users do not truly recognize the value of information flow; they are more concerned with the liquidity itself.