Kaito (KAITO) tokenomics

Kaito AI is a technology company that provides a Web3-focused information platform, often referred to as an "InfoFi" platform. It integrates the flow of information, attention, and capital by indexing and organizing data from diverse sources such as social media, governance forums, and research using large language models (LLMs). The token economics of the Kaito ecosystem are designed to quantify and reward crypto-related content creation while facilitating a market for attention.

Issuance and Allocation Mechanism

The Kaito ecosystem utilizes a points-based system known as YAPs (tokenized attention) to reward users before and during the transition to a formal tokenized economy. While YAPs do not currently have direct financial value, they serve as a reputation and discovery mechanism.

The primary issuance event for the native token is an anticipated airdrop, which is expected to be one of the most significant in the current quarter. The allocation of tokens is structured to support various stakeholders, including content creators, brands, and protocols.

Usage and Incentive Mechanism

Kaito operates through three main products that define its utility and incentive structure: Kaito Pro, Kaito YAPs, and Kaito Connect.

• Kaito YAPs (Tokenized Attention): This is the core incentive mechanism. Users earn YAPs by sharing crypto insights online. Kaito's AI analyzes this content and assigns points based on:
  • Volume: The amount of content produced.
  • Engagement: The strength of the creator's social graph and how influential followers interact with the content.
  • Semantics: The relevance and originality of the insights as determined by LLMs.
• Kaito Connect & Yapper Launchpad: This serves as a marketplace for attention.
  • Brands and Protocols: Submit bids to secure visibility for specific narratives.
  • Creators: Produce content that aligns with these bids to earn rewards.
  • Users: Engage by voting on which brands or narratives should receive the most attention.
• Kaito Pro: An AI-powered aggregator that organizes unstructured crypto data into searchable insights. It acts as the utility hub where the data generated by the incentive system is consumed by researchers and investors.

Locking Mechanism and Unlocking Time

The token unlock schedule for Kaito is designed to release the total supply of 1,000,000,000 tokens over a multi-year period, ending in early 2029. The schedule began with a significant initial release in February 2025.

Key Unlock Milestones:

• Initial Release (February 20, 2025): 220,000,000 tokens (22% of total allocation) were unlocked, likely corresponding to the initial airdrop and liquidity provision.
• Monthly Linear Unlocks: Following the initial release, the protocol enters a phase of smaller monthly unlocks (approximately 1,660,000 tokens) through late 2025.
• Accelerated Unlocks (2026 - 2029): Starting in February 2026, the unlock volume increases significantly to approximately 20,702,500 tokens per month, with periodic larger spikes of 25,652,500 tokens.
• Full Distribution: The final tokens are scheduled to be unlocked by January 20, 2029, at which point 100% of the 1 billion token supply will be in circulation.

Market Dynamics and Risks

The token economics face specific challenges related to the "Yap-to-Earn" model:

• Content Quality: There is a risk that direct financial incentives may lead to oversaturation and a degradation of content quality, as users may produce content for rewards rather than genuine conviction.
• Airdrop Volatility: High volatility is expected post-TGE (Token Generation Event) due to potential sell pressure from airdrop recipients and aggressive shorting by market participants.
• Platform Reliance: Unlike competitors that incentivize on-chain actions (like bridging), Kaito relies heavily on external platforms like X (formerly Twitter) for its distribution and data scraping, which introduces external platform risk.