Kaito (KAITO): A complete overview of the first attention market

What is Kaito?

Introduction to Kaito

Kaito AI is an AI-powered platform specializing in aggregating and analyzing cryptocurrency market data. Kaito's goal is to provide investors with access to key market information in real time.

Using advanced AI algorithms (including machine learning and natural language processing), Kaito retrieves, filters, and analyzes thousands of hard-to-access information sources beyond traditional search engines (Twitter, Discord, governance forums, podcasts, etc.), offering a concise and relevant summary of market trends.

Launched in 2022 by Yu Hu, a former analyst at Deutsche Bank and Citadel, Kaito has become an essential tool in the crypto ecosystem. The platform positions itself as the "Bloomberg of crypto," enabling users to visualize projects, sectors, and trends that capture the market’s attention.

In total, Kaito raised $10.8 million in 2023 through two funding rounds from major investment funds like Sequoia, Dragonfly, and Spartan Group, bringing the company’s valuation to $87.5 million.

Kaito’s Thesis

Kaito’s idea stemmed from the personal frustration of its founder, Yu Hu, who struggled to constantly search for and filter relevant information among the overwhelming data available on social media.

The fundamental observation is that information is the most valuable resource for an investor, particularly in the crypto market. However, fragmented sources, constant noise, and misinformation make accessing insights and making decisions difficult.

Kaito’s thesis is to provide a platform that solves this issue. By leveraging artificial intelligence, Kaito’s tool can process thousands of sources and terabytes of information to provide a real-time representation of current trends.

In a way, if the cryptocurrency market is a massive library where information is abundant but scattered everywhere, Kaito is the AI-powered librarian that helps users find exactly what they need.

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Kaito’s Features

Kaito Portal: The Bloomberg of Crypto

Kaito Portal is the core of the Kaito ecosystem, serving as an interface that brings together several analytical tools:

• Real-time data aggregation: Tens of thousands of Web3 sources, including governance proposals, discussion forums, conference transcripts, and niche research reports, are aggregated and condensed on the platform to provide a quick and accessible overview of key discussions.
• Mindshare and sentiment analysis: The mindshare (share of attention) of different projects or narratives, along with AI-driven sentiment analysis, is tracked and displayed on a leaderboard for quick interpretation. Users can customize the platform to follow specific tokens, projects, or narratives.
• API: An API is available for project teams, investment funds, and research teams, providing access to collected data, which can then be processed independently based on their needs.
• Metasearch: A specific search by crypto that allows combining keywords, important events, and tickers of different cryptocurrencies.
• Catalyst Calendar: A comprehensive list of all events related to various cryptocurrencies (unlocks, updates, implementations…).

Despite a high price ($833 per month), many hedge funds and professional traders already use Kaito to anticipate market movements. The product effectively addresses a real need: providing easy access to trending information in a market often characterized as an "attention market."

Yaps: Monetizing Attention

In December 2024, Kaito announced a "Yaps" program. In line with its core thesis of aggregating high-quality information, Yaps are points distributed daily to content creators or “Yappers” generating crypto mindshare from quality content.

Yaps reward content creation and value generation on social media. Additionally, Yaps help track the most relevant creators in the ecosystem without relying on often misleading metrics like follower count or impressions. Instead, Kaito’s reward system focuses on "Smart Followers"—reputable crypto ecosystem creators and developers detected by the algorithm and organized into a social graph.

Thus, Kaito does not strictly count followers or impressions when distributing rewards. For instance, a creator with hundreds of thousands of followers might receive very few Yaps if "Smart Followers" deem their content lacking real value.

Furthermore, Kaito has not publicly disclosed the algorithm supporting Yaps distribution, likely to prevent program gamification and point farming. However, it is evident that Kaito leverages advanced AI to ensure that rewarded content is engaging and original.

This content mapping enables Kaito to fuel what they call the attention market or attention economy. Thanks to this concept, projects can now target passionate, relevant influencers with strong developer and creator networks advancing the ecosystem.

Notably, Yaps have already served as a metric for token airdrops by projects looking to attract quality creators interested in discovering and discussing their work. Berachain and Story Protocol have already allocated portions of their airdrops to "Yappers," with more expected to follow.

Kaito Connect

Kaito Connect is another key feature, allowing users to track their "Smart Followers" progression and Yaps earned over time. It also displays a leaderboard of top "Yappers," offering unprecedented visibility for standout creators on the projects they specialize in.

The platform also features a Web3 Launchpad, primarily for pre-TGE projects. This enables tokenless projects that need to build a community and increase their mindshare to do so via Kaito.

Users can vote for their preferred projects, with the one receiving the most votes gaining a dedicated leaderboard on Kaito, tracking its top "Yappers" (influencers/builders earning Yaps) in real time.

Voting on the platform is possible through:

• Yaps earned over time for high-quality shared content.
• Smart Followers, accumulated when they follow a user on social media.
• sKAITO, the staked KAITO token, with voting power increasing based on quantity and staking duration, favoring long-term holders.
• Genesis NFTs, Kaito’s native NFT collection.

Votes are locked for seven days before they can be reused on the platform. This mechanism incentivizes KAITO token ownership, benefiting those looking to influence votes for potential airdrops from pre-TGE projects or projects themselves aiming for leaderboard exposure.

Simultaneously, content creators recognized as valuable by AI or "Smart Followers" also wield significant influence on the platform, highlighting their favorite projects.

Subnet 5 on Bittensor

One of the lesser-known but highly interesting aspects of Kaito is its recent integration into the Bittensor ecosystem through Subnet #5. This subnet is dedicated to developing AI models specialized in text embedding, allowing Kaito's algorithms to better process and understand textual data—also known as Natural Language Processing (NLP).

Participants in this subnet (miners) train models that enable Kaito to optimize its indexing, ranking, and textual content analysis capabilities. This is particularly useful for detecting plagiarism and fairly rewarding creators. The subnet plays a crucial role in Kaito’s Yaps model, which aims to incentivize high-quality content across various platforms while preventing content theft and gaming of the system.

You can access the documentation for this subnet here. The models trained by Subnet #5 will be available via API for integration into various applications. It is also worth noting that OpenKaito’s text embedding models frequently surpass the capabilities of OpenAI’s models, further pushing the boundaries of AI performance.

Here is the latest improvement brought to Kaito by its subnet:

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The Information Finance (InfoFi) Narrative

Kaito is at the center of the Information Finance (InfoFi) narrative, also referred to as “information finance,” a sector aimed at incentivizing or monetizing information. The fundamental thesis of InfoFi is that information itself is a financial product.

One of the leading examples of this sector is Polymarket, a platform that enables users to place bets on predictive markets in a permissionless manner on the blockchain. This creates a free market where users are incentivized to provide the most accurate information possible.

In some cases, Polymarket has proven to be more accurate in predicting future events than polls or traditional studies, particularly during the U.S. election, despite being banned in some countries. The financial incentives for making the correct prediction have pushed well-informed participants to place bets, shifting the odds toward the most likely outcome.

Kaito fully embraces this InfoFi narrative, as the distribution of Yaps incentivizes high-quality content creation while providing a direct ranking of top creators. By extension, this enhances access to the most relevant information in the ecosystem.

The narrative has gained significant traction and has been prominently discussed by Vitalik Buterin in his blog. Interestingly, Buterin himself participated in Kaito’s experiment, accumulating Yaps through his posts on X.

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KAITO: The Native Token of Kaito

On February 20, 2025, Kaito officially launched its KAITO token through an airdrop of 10% of the total supply to the community. According to its documentation, the token serves multiple purposes, primarily influencing the distribution of attention within the ecosystem, enabling governance participation, and functioning as a means of payment on the platform.

The KAITO token can be staked to generate yield and participate in governance. Notably, if 75% of the KAITO received through the Yaps program is staked, users receive a “Hodler” badge, which signals their long-term commitment to the project and could potentially grant access to future rewards.

The distribution of KAITO tokenomics is as follows:

To put it simply, 10% of tokens were initially distributed to the community during the first airdrop (Yaps and NFT Kaito Genesis holders), 2% to Binance Hodlers, 25% to key contributors, 8.3% to initial backers (investors from the first financing rounds) and 10% to the Foundation (strategic budget for community development). For the remainder, 32.2% is reserved for ecosystem growth (via incentives, grants, marketing, etc.), while 7.5% will go to content creation incentives (initially on X, later elsewhere) and 5% for liquidity incentives.

According to the documentation, 56.67% of the total KAITO supply is designated for the ecosystem and community, with 19.5% allocated for both initial and long-term airdrops.

The KAITO buyback program also allows Kaito to purchase its tokens on the market thanks to the fees generated by the network (launchpads, Kaito connect, etc.). These tokens are then held in the protocol’s reserve. There is currently no metric allowing to evaluate the fees growth besides its founder Yu Hu’s tweets. According to his X account, Kaito has seen a 50% MoM growth in fees. In March Kaito purchased 13,333 KAITO tokens in the open market.

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The Limitations of Kaito

While Kaito has enabled many smaller creators to gain recognition and monetize their contributions, it has also introduced several challenges that need to be addressed.

One of the key issues is Yap farming, where some users exploit AI-generated responses via ChatGPT under the tweets of Smart Followers to maximize engagement. Certain creators, such as Andy, have been exposed for deliberately posting provocative takes that don’t reflect their actual opinions, purely to generate reactions and engagement to rank higher on Kaito’s leaderboard.

To combat this, the Kaito team regularly updates its AI algorithms to filter out low-value farming behavior. In extreme cases, the team has even considered introducing slashing penalties for users who attempt to game the system. However, the effectiveness of these anti-farming measures remains to be seen, and ensuring a fair distribution of Yaps is critical to maintaining the integrity of Kaito’s attention economy.

Additionally, rumors have emerged about the off-chain sale of votes (OTC trading). These concerns intensified when 0G Labs surpassed MegaETH on Kaito’s leaderboard, despite having a significantly lower mindshare. While this raises concerns about vote manipulation, corruption is inevitable in any system where incentives exist, and such practices could be seen as a natural part of Kaito’s growing attention economy.

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Conclusion

Kaito is a highly promising project that fits perfectly into the SocialFi and InfoFi narratives. It has rapidly established itself as a key player in the crypto information economy. The attention market concept has proven its effectiveness over recent months by accurately identifying emerging trends before they happen.

One of Kaito’s strongest advantages is that it had already built a functional product, an active community, and a solid product-market fit long before launching its token or expanding deeper into Web3.

However, the KAITO token launch and its tokenomics have sparked controversy, particularly regarding the large allocations to private investors and insiders compared to the relatively small airdrop given to the community.

Despite these concerns, Kaito’s core value proposition remains unique: it identifies and rewards the most valuable contributors in the ecosystem, while simultaneously giving them a say in shaping the future of Web3 by voting for the most deserving projects.

Ultimately, the success of Kaito depends on its ability to remain a focal point of attention and sustain an engaged community. Given that Kaito itself thrives on the attention it generates, ensuring continued user interaction and interest will be crucial for its long-term survival.

If you want to open a Kaito Portal account, you can use our referral link.