Original author: Biteye core contributor @viee7227

There was a time when the rules of the primary market were relatively clear: VCs provided the money, KOLs voiced their opinions, and retail investors provided liquidity.

But today, this system seems to be being broken.

VC endorsements are no longer a panacea; project teams are starting to redesign the rules of the game around "influence." And KOLs are no longer just simple traffic drivers. They hold the chips, step into the game, and can even determine the life or death of a project.

To some extent, the KOL round is a token distribution method that emerged under the narrative of "influence is paramount" after VCs withdrew and retail investors fell silent. In the past 7 days, XHunt statistics show that there were as many as 3,860 tweets mentioning "KOL" in the crypto community, while there were 3,078 mentioning "VC". A covert battle for influence has quietly begun.

This article doesn't delve into grand theories; it simply tells the real stories behind the KOL boom—where it comes from, who's laughing, who's crying, who's counting their money behind the scenes, and who's suffering from insomnia in the dead of night.

How did KOLs gradually step into the spotlight?

Let's go back to the end of 2022.

The crypto venture capital winter has arrived. Primary market valuations are inflated, exit cycles are lengthening, and the secondary market is struggling to absorb the supply. Large institutions are hesitant to invest, while smaller projects are unable to raise funds.

Meanwhile, retail investors have quietly returned. Blast, ZKsync, Friend.tech... every liquidity surge is a signal of retail investors returning.

What most easily influences these people is not institutional research reports, but KOLs who seem "knowledgeable" but are actually "selling products".

The project team realized that while VCs might not be able to help them break into the mainstream, KOLs could. Instead of spending money on advertising, they decided to invest in KOLs at low cost, letting them tweet and create buzz.

Thus, a new way to play was born:

• Project teams sometimes offer KOLs funding at prices lower than venture capital (VC) rates.
• KOLs were aggressively promoting their services in front of TGE, creating FOMO (Fear of Missing Out).
• The moment it was unlocked, traffic exploded, and KOLs cashed out and left.

The KOL round arrived just like that. You can think of it as a "private equity fund with a mission." Low price, fast unlocking, and even a "guaranteed return clause."

The project team had a clear plan: give the tokens to people with followers and influence, and after the tokens are listed, they will naturally bring people to drive up the price.

KOLs also felt it was a good deal: getting the coins at a low price, bringing some traffic, and unlocking a portion upon launch to sell—it sounded like a sure-fire way to make money.

But is that really the case in reality?

II. The Truth Behind the KOL Round: Some Get Rich Quick, Some Go Home Zero

2.1 Revenue from both ends of the KOL round

The profitability of KOL-driven funding rounds varies greatly depending on the project and market environment.

In a bull market, KOL-driven investment is often seen as a "win-win-win" situation: projects secure funding, KOLs buy in early at low prices, and retail investors can make some money by following the upward trend. But in a bear market, the script changes completely.

With declining liquidity, it's become common for stocks to plummet immediately after listing, and KOLs (Key Opinion Leaders) are vulnerable to significant losses due to their locked-up tokens and inability to sell in time. KOL @realChainDoctor frankly admitted that he invested in over ten KOL funding rounds last year, none of which were profitable, and some didn't even issue any tokens. Pang Jiaozhu (@kiki520_eth) believes that KOL funding rounds have certain systemic pitfalls, such as the possibility of not receiving tokens, or the tokens rising in price or even the rules changing.

Top KOL @jason_chen998 stated that his most profitable investments were in Aster and Mira. He secured low valuations when the market was down and no one was interested, and the project teams were reliable. He also mentioned that TGE (Tencent's Investing in the Global Market) coincided with a bull market. Therefore, the key to making money in KOL funding rounds is to buy during bear markets and leverage connections to acquire projects. However, he also admitted that most KOL funding rounds are essentially high-yield investments. If you're lucky, you might get some returns; if you're unlucky, you end up paying to work for the project, being pressured by the project team to create content, having your tokens withheld, and not being able to unlock them, ultimately leading to unpleasant outcomes.

We reviewed some recent KOL-led funding rounds, and some projects did indeed generate high returns, such as:

• Aster: When the price broke through $1.79, the KOL round saw a maximum unrealized profit of over 70 times. If we only consider the 30% already unlocked at the opening, the profit would be 21 times, equivalent to a profit of 1.05 million USDT for an initial investment of 50,000 USDT.
• Holoworld AI: Lookonchain detected on-chain address 0x3723, suspected to be a KOL investor, who received approximately 10.24 million HOLO tokens in September at a cost of only $0.088. Subsequently, they cashed out at an average price of around $0.6, accumulating over 4.71 million USDT in cash, achieving a single-round return of over 444%, netting over 4 million USDT.
• WalletConnect: After the tokens were unlocked, ICO and KOL round investors only received about 1.5x returns.

However, there have been many cases where KOL-funded projects have experienced price collapses or project-related issues after their launch.

A prime example is SatoshiVM in early 2024. The project's token, $SAVM, initially surged to over $11 thanks to extensive hype from key opinion leaders (KOLs) during its initial offering. However, news soon emerged that these KOLs were cashing out at the peak, triggering a crisis of confidence, and the project gradually faded away. KOLs and retail investors who didn't sell likely failed to profit, and $SAVM has now fallen to approximately $0.075.

Another example is ZKasino. After KOLs participated in fundraising and promotion, the project team unilaterally changed the rules and absconded with the assets after users completed their asset lock-up. In this case, the KOLs who participated in fundraising and promotion were condemned by their fans as accomplices, suffering not only financial losses but also immense public pressure.

Eclipse, which launched its token a few months ago, had a valuation of $600 million in its KOL round and $1 billion in its Series A round. However, its actual circulating market capitalization after launch was only about $380 million, far lower than the rumored $600 million valuation. Investment research KOL @_FORAB stated that some of Eclipse's KOL round allocation was also distributed to media and the community, and ultimately it wasn't even listed on Binance futures.

In response, well-known KOL @yuyue_chris tweeted that the real problem with KOL rounds is not losing money, but that project teams and intermediaries use KOL rounds under the guise of promotion to lure people into taking over their investments, making KOLs use their fans to redeem their principal. This kind of scam that preys on acquaintances is the most irresponsible approach.

2.2 Behind the Profits: A Triangular Game Between Projects, KOLs, and Retail Investors

As mentioned earlier, the KOL round reflects the changes in the power structure of the entire primary market.

In the past, project owners relied on venture capitalists (VCs) to secure funding, and VCs used their influence to screen projects. Now, project owners have discovered that KOLs (Key Opinion Leaders) are cheaper, faster, and more effective at generating buzz.

VCs are unhappy: they invested millions of dollars, only to have a bunch of Twitter users come in at a low price and have even more influence than them... so some VCs are choosing to "exit".

Retail investors are even more upset: they bought tokens on the secondary market that were being sold off after being unlocked by KOLs, and on the day of the listing, they saw KOLs promoting the tokens, but in reality, they were dumping them.

The project team may not be happy either: because KOLs' hype is mostly a short-term behavior, and the volume, liquidity and high opening price on the day of launch do not represent the long-term trend of the project.

Thus, a tense triangular relationship was formed on the stage of KOLs.

• KOLs are calculating: How can they safely exit the investment of money and reputation?
• The project team is wondering: Will the allocated amount be enough to generate the expected buzz and price increase?
• Retail investors are asking: Is this copy trading an opportunity or a trap?

The interests of these three parties are like three forces acting in different directions, pulling at each other. Unless the project itself is strong enough to hold these three forces together like a magnet, any excessive force from any party could cause the triangle to collapse completely.

III. The "Middleman" You Can't Ignore—The Agency

In the KOL round, project teams often do not directly connect with KOLs, but instead use third-party agencies for distribution and management.

They are the "resource allocators" in this game. They help project teams design KOL round terms (price, quota, unlocking); screen and invite suitable KOLs; monitor progress and ensure content delivery. Some reliable agencies also design mechanisms such as guaranteed returns, promotional rewards, or principal refunds to help KOLs reduce risks.

They are the "intermediaries" in the entire KOL funding round system, controlling both traffic and resources. So if you are a newly established KOL and want to participate in the KOL funding round, the first thing to do is not to find projects, but to find the right agency.

You may have heard of the following agencies:

• LFG Labs (@dubailfg): Founded by @snow949494 (XHunt Chinese ranking 134), focusing on China, Japan, South Korea and the Middle East, mainly connecting with top projects, and specializing in integrating KOL resources, content dissemination and KOL round financing linkage.
• JE Labs (@JELabs2024): Founded in 2024 by @0xEvieYang (XHunt Chinese ranking 244), it primarily builds brands and communities for early-stage high-potential projects, connects them with Chinese audiences, and helps projects grow from 0 to N.
• BlockFocus (@BlockFocus11): Founder "Ergou" @CryptoErgou (XHunt Chinese ranking 469) was among the first in the Chinese-speaking world to develop the agency business. BlockFocus emphasizes the accumulation of project value and medium- to long-term operation.
• Shard (@ShardDXB): Founded by @ciaobelindazhou (XHunt Chinese-language ranking 784), it is a marketing agency incubated by a crypto investment fund, focusing on providing strategic narratives and global growth services for Web3 infrastructure projects, covering key markets in multiple languages including Chinese, English, Korean, Japanese, and Russian.
• XDO: Led by @mscryptojiayi (XHunt Chinese ranking 213), a primary investor with years of market experience from a major firm, XDO prefers to work on "few but high-quality" projects, handling everything from mechanism design, strategic consulting, market narrative shaping to execution.
• Mango Labs (@MangoLabs_): Founded by @dov_wo (ranked 112th in XHunt Chinese-language search), it focuses on marketing and KOL placement in the Chinese-speaking world, providing projects with a complete service from narrative creation to community operation.
• Cipher Dance (@Cipher_Dance): Founder @Jeffmindfulness (XHunt Chinese ranking 2178) focuses on content marketing in the Pre-TGE stage, and is good at amplifying project narratives in a creative way, and multilingual KOL placement.
• 4XLabs: "Strategic Consultants + KOL Matrix," helping global projects achieve growth from 0 to 1 in the Chinese market. Team members include @jason_chen998 (XHunt Chinese Ranking 34); @Bitwux (XHunt Chinese Ranking 24); @Phyrex_Ni (XHunt Chinese Ranking 8); and @KuiGas (XHunt Chinese Ranking 31).

IV. How to get the attention of the project owner/agency?

Typically, the project team or agency will allocate quotas based on the KOL's influence metrics (such as number of followers, past tweet popularity, etc.) and specify the content production and unlocking requirements.

To secure KOL funding opportunities, the key is to improve both "content" and "data," and build a trustworthy personal brand.

• Continuously produce professional content: We insist on publishing valuable content such as market analysis, on-chain data insights, and project evaluations.
• Actively engage on Twitter: Interact with project teams and other KOLs, participate in AMAs, live streams, and tweet discussions to increase activity within the industry.
• Optimize data with tools: Use analytics tools to improve account visibility. For example, use @xhunt_ai to view your account's influence ranking, capability model, and follower count, and precisely adjust content output. XHunt has also launched a scoring system such as the "Soul Index," which has become an important reference for many project teams and agencies to evaluate KOLs.
• Establish connections through multiple channels: In addition to online promotion, you can also participate in offline industry events or hackathons to get to know project teams.

V. How do KOLs select projects?

KOL funding rounds are not charity; every participant faces the pressure of recouping their investment. Choosing the wrong project not only results in losses but also damage to reputation and the interests of ordinary users. Therefore, it's best to conduct a systematic screening process before collaborating, similar to investing in private equity, focusing on the following key dimensions:

• Valuation and FDV: Is the overall valuation of the project reasonable? Is the price in the KOL round relatively discounted?
• Unlocking Design: Is the TGE unlocking ratio and linear cycle healthy? Is there a risk of concentrated selling pressure?
• Capital background: Check whether there are top-tier VCs investing and whether the institutional lineup has an endorsement effect.
• Participating lineup: Which top KOLs have participated, and are there any signs of joint participation by organizations and individuals?
• Agency Source: To understand whether the agency responsible for matchmaking is professional, what its past performance is, and whether it has participated in high-quality projects.
• Team Reputation: Does the founding team have past project experience or industry reputation, and is there any history of controversy?
• Terms and conditions require: Whether the promotional content needs to be reviewed in advance, and whether there are special arrangements such as guaranteed minimum or refund clauses.

In addition, you can use tools such as XHunt to analyze the reliability of a project, and use plugins to view financing information, team information, number of followers of Chinese and English KOLs and community public opinion, as well as the project's influence ranking.

VI. Conclusion: The KOL round is a narrow door that the primary market leaves for ordinary people.

From a higher perspective, KOL funding rounds are a financing tool that has naturally evolved in the crypto industry under the background of prioritizing traffic, emphasizing narrative, and being driven by community.

It lowers the funding threshold, spreads information faster, and has indeed helped some small projects stand out without VC support.

Of course, KOL funding rounds sometimes suffer from a lack of standards and unclear responsibilities. But from another perspective, this may also be one of the few opportunities for retail investors to "squeeze into the primary market." Compared to traditional private equity funds dominated by elite VCs and with high information barriers, KOL funding rounds at least have a certain degree of liquidity and openness. Any ordinary person, as long as they can consistently create content and have influence, has the potential to obtain funding and truly participate in the primary pricing game.

This isn't a perfect mechanism, but it's a "makeshift solution" for the current crypto-native capital market. With rules still in their formative stages and trust mechanisms still under construction, the KOL round, as a new market solution, still has its place.

Because in this era, influence itself is a new form of capital.