Kaito AI airdrop sparks tokenomics, early selling concerns

Kaito AI, a crypto intelligence platform, has allocated nearly 20% of its token supply to future airdrops and incentives, fueling enthusiasm among early adopters while raising concerns over tokenomics.

The platform, which brands itself as the “ultimate Web3 information platform,” is preparing for its first airdrop, allocating 10% of its total token supply to its early community members and ecosystem participants.

“For the Initial Community and Ecosystem Claim – 10%. This allocation includes the initial Kaito Yapper community, Genesis NFT holders, and ecosystem yappers and partners,” Kaito AI wrote in a Feb. 20 X post.

According to the platform, 56.6% of the total supply will be distributed to the community and ecosystem, with 19.5% specifically designated for initial and long-term airdrops and incentives.

The platform is introducing new dynamics for the crypto marketing industry, according to Marcin Kazmierczak, co-founder and chief operating officer of RedStone, a blockchain oracle solution firm.

“Currently, I do not know a single serious marketer that wouldn’t use Kaito stack,” he told Cointelegraph, adding:

“Kaito has changed the way crypto marketing operates. Previously, it was mainly about views and impressions, however, Kaito introduced a new metric, Smart Followers. It allows one to measure how many respected or active crypto accounts interacted with or followed a specific account.”

Despite the platform’s innovation, some analysts have expressed concerns over its tokenomics, particularly regarding the allocation to insiders, which could create selling pressure after the airdrop.

Related: CZ admits Binance token listing process is flawed, needs reform

Kaito tokenomics spark allocation, selling concerns

Similar events are often riddled with airdrop squatters, or professional airdrop hunters, who farm protocols with an incoming airdrop in hopes of financial gain. In 2023, the Arbitrum (ARB) airdrop saw airdrop hunters consolidate $3.3 million worth of tokens.

Kazmierczak said Kaito’s airdrop structure is designed to prevent farming.

“Today’s airdrop allocation will be defined by the number of Yaps collected, which were very hard to bot, and Kaito genesis NFTs held at the snapshot.”

Related: Pig butchering scams stole $5.5B from crypto investors in 2024 — Cyvers

Still, onchain analysts have pointed out that a significant portion of the token supply is allocated to insiders. According to onchain investigator RunnerXBT, 43.3% of Kaito’s total supply is designated for insiders, including 35% for the team and 8.3% for early investors.

Some analysts have warned of a potential sell-off following the airdrop, particularly given the current market downturn.

Anndy Lian, an intergovernmental blockchain expert and author, suggested that Kaito’s token could follow a familiar pattern of hype-driven spikes followed by sharp declines:

“As for Kaito itself, I see a classic pattern: big hype, big spike, then a massive sell-off. Even if [the initial supply] is vested (which seems likely with allocations for liquidity and early backers), a lot of folks — especially those who farmed points just before with hyped airdrops: starts high, ends low.”

Crypto investor interest in airdrops saw an uptick on Jan. 15, after the total value of the Hyperliquid (HYPE) token airdrop soared to $7.5 billion, Cointelegraph reported.

Magazine: MegaETH launch could save Ethereum… but at what cost?