This is a segment from the 0xResearch newsletter. To read full editions, subscribe.
Crypto is a volatile industry for primarily two reasons: 1) it’s permissionless (anyone can make a token) and 2) it’s still largely looking for product-market fit.
What does this mean to a short-term trader looking to flip a quick buck? If you’re trying to frontrun the market, you’d want to know when a certain narrative is falling in (and out of) favor.
You can then spend absurd hours doomscrolling Twitter and Telegram groups — or you can use Kaito, a Web3-focused search engine that scrapes troves of data across social media to generate quantifiable sentiment analysis for you.
If you’ve spent time on CT in the last year, you’ve likely seen many of these useful Kaito dashboards around.
Source: @sandraaleow
But people are excited about Kaito today because of its token airdrop, not its core analytical product.
Wait, a data analytics platform needs a token?
Yes it does, because you can apparently tokenize anything in crypto. In Kaito’s case, it’s tokenizing the attention economy of Crypto Twitter.
Everyone has a shot — you can connect your X account to Kaito, and tweet a lot to earn “Yap” points, which entitle you to a larger KAITO airdrop.
To deter mindless spam, the team weights Twitter posts by relevance (proof-of-work), originality (proof-of-insight) and engagement based on “reputation” (proof-of-exchange).
This entire idea is based on a familiar sales pitch: Big Tech sucks because they monopolize the value created by content creators. Kaito lets the people retain some of that value.
It also opens up a very interesting business model for Web3 marketing.
The users who’ve signed up to “yap” away on Twitter provide Kaito with quality data around crypto trends and KOLs that can be sold to major ecosystem projects.
Source: Kaito
“Essentially Kaito does all the hard work that marketing teams would otherwise need to spec out to determine how and where to develop and spend on social marketing campaigns in terms of selecting the right set of KOLs, targeting the proper audience and so forth,” Blockworks’ Danny Knettel told me.
Now back to the points. Maybe you think this is another pointless “SocialFi” game we’ve seen with BitClout or friend.tech, but Kaito’s points are actually shaping up to be valuable.
Based on @Ren_gmi’s estimates, YAP points are worth anything between $20 to $140 per point.
Kaito hasn’t released details around its tokenomics just yet, but Binance’s announcement page of the KAITO token listing states about 24% of its total token supply on launch.
It’s unclear how Kaito’s token product ties into its core analytics product, and it’s still too early to speculate on there being any kind of value accrual between the two.
Assuming an annual price of $833 and 1000 paid seats, Kaito generates annualized revenues of $833k.
One could value KAITO at a conservative 20x P/S multiple of $833k, which would place the token’s value at a $52.5 million market cap ($0.219 per token and assuming a 24% token supply airdrop).
On Aevo’s pre-launch market, KAITO is presently trading at a $320 million market cap/$1.3 billion FDV.
