Unveiling the KOL Round: A Wealth Experiment Driven by Traffic

Once upon a time, the rules of the primary market were relatively clear: VCs provided funding, KOLs amplified their voices, and retail investors provided liquidity.

But today, this system seems to be breaking down.

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, enter 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 after VCs withdrew and retail investors fell silent, under the narrative of "influence above all else."

To some extent, the KOL round is a token distribution method that arose under the narrative of "influence above all else" after VCs withdrew and retail investors fell silent.

Over 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 only tells the real story behind the KOL funding round—where it comes from, who's laughing, who's crying, who's counting their money behind the scenes, and who's suffering from sleepless nights. How did the KOL funding round gradually move to the center stage? Let's go back to the end of 2022. The crypto VC winter has arrived. Primary market valuations are inflated, exit cycles are lengthening, and the secondary market can't absorb the supply. Large institutions are hesitant to invest, and small projects are struggling to raise funds. Meanwhile, retail investors are quietly returning. Blast, ZKsync, Friend.tech… every liquidity surge signals the return of retail investors. What most easily influences these investors isn't institutional research reports, but rather KOLs who appear knowledgeable but are actually promoting their projects. Project teams have also realized: VCs may not be able to make them mainstream, but KOLs can. Instead of spending money on advertising, they're better off putting low-priced tokens into the hands of KOLs, letting them tweet and create buzz. Thus, a new strategy was born: Project teams offer KOLs (Key Opinion Leaders) funding, sometimes at prices lower than venture capital (VC) rates; KOLs aggressively promote their products and services before the TGE (Tencent's Investing Platform), creating FOMO (Fear of Missing Out); at the moment of unlocking, traffic explodes, and the KOLs cash out and leave. This is how the KOL funding round came about. You can think of it as a "private equity with a mission." Low prices, fast unlocking, and even "guaranteed returns." The project team has a clear calculation: give the tokens to people with followers and influence; after listing, they will naturally bring their own people to drive up the price. KOLs also feel it's a good deal: get the tokens at a low price, generate some traffic, unlock a portion after listing, and then sell—it sounds like a sure-fire profit. But is that really the case in reality? The Truth About KOL Funding: Some Get Rich Quick, Some Go to Zero. 2.1 The Two Ends of KOL Fund Returns. The profit and loss performance of KOL funds varies greatly depending on the project and market environment. In a bull market, KOL funds are often seen as a "win-win-win" situation: projects receive funding, KOLs invest early at low prices, and retail investors can make some money by following the price increase. However, in a bear market, the script changes completely. With declining liquidity, it has become common for stocks to plummet immediately after listing. KOLs, unable to sell their locked-up tokens in time, are prone to significant losses. KOL @realChainDoctor frankly admitted that he invested in over ten KOL funding rounds last year, none of which were profitable; 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 token price rising 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 (Taiwanese online investment platform) 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 coins deducted, and not unlocking them, ultimately leading to unpleasant outcomes. We reviewed some recent KOL (Key Opinion Leader) funding rounds for various projects, and some projects did indeed generate high returns. For example: Aster: When the price broke through $1.79, the highest unrealized profit from the KOL round exceeded 70 times. If we only consider the 30% already unlocked at the opening, the profit is 21 times, equivalent to a profit of 1.05 million USDT on an initial investment of 50,000 USDT. Holoworld AI: Lookonchain detected that on-chain address 0x3723 is suspected to be a KOL investor who received approximately 10.24 million HOLO tokens in September at a cost of only $0.088. Subsequently, these tokens were gradually 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 approximately 1.5x returns. However, many KOL-funded projects have previously experienced price collapses after launch, or faced problems with the project team. A typical example is SatoshiVM in early 2024. The project's token, $SAVM, initially surged to over $11 thanks to extensive KOL promotion, but soon after, news broke that KOLs were cashing out at the high price, triggering a crisis of confidence, and the project gradually cooled down. KOLs and retail investors who did not sell likely failed to profit; currently, $SAVM has 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 lock-up period. In this incident, 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. Another example is Eclipse, which launched its token a few months ago. Its KOL round valuation reached $600 million, and its Series A valuation reached $1 billion, but after launch, its actual circulating market capitalization was only about $380 million, far lower than the rumored $600 million valuation. Investment research KOL @_FORAB stated that some of the KOL round allocations for Eclipse were distributed to media and the community, ultimately failing to even be listed on Binance futures. In response, well-known KOL @yuyue_chris tweeted that the real problem with KOL rounds isn't losing money, but rather that project teams and intermediaries use KOL rounds under the guise of promotion to lure people into taking over their investments, forcing KOLs to use their followers to redeem their own principal. This kind of exploitative practice is the most irresponsible. 2.2 Behind the Returns: A Triangular Game Between Projects, KOLs, and Retail Investors As mentioned earlier, the KOL round reflects a shift in the power structure of the entire primary market. In the past, project teams relied on VCs for funding, and VCs used their influence to screen projects. Now, project teams have discovered that KOLs are cheaper, faster, and more effective at generating momentum. VCs are unhappy: they invested millions of dollars, only to have a group of Twitter users come in at a low price, with influence even greater than their own... so some VCs are choosing to "exit." Retail investors are even more unhappy: they bought tokens on the secondary market after KOLs unlocked them and then sold them off; on the day of listing, they saw KOLs promoting the tokens, but in reality, they were dumping them. The project team isn't necessarily happy either: because KOL hype is often short-term; the volume, liquidity, and high opening price on the day of listing don't represent the long-term trend of the project. Thus, a tense triangular relationship has formed on the KOL-driven market. KOLs are calculating: how can they safely exit with their invested money and reputation? The project team is thinking: Will the allocated funds bring the expected buzz and price increase? Retail investors are asking: Is this follow-up investment an opportunity or a trap? The interests of these three parties are like three opposing forces, 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 this triangle to collapse completely. The "Middleman" You Can't Ignore—The Agency In the KOL funding round, project teams often don't 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 funding terms (price, limits, 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 risk. They are the "intermediaries" in the entire KOL funding system, controlling both traffic and resources. So if you're a newly emerging KOL and want to participate in KOL funding rounds, the first thing you should do isn't find projects, but find the right agency. You might have heard of these agencies: LFG Labs (@dubailfg): Founded by @snow949494 (ranked 134th in XHunt Chinese-language search), focusing on China, Japan, South Korea, and the Middle East, primarily connecting with top projects, and specializing in integrating KOL resources, content dissemination, and KOL funding round coordination. JE Labs (@JELabs2024): Founded in 2024 by @0xEvieYang (XHunt Chinese ranking 244), primarily focuses on building brands and communities for early-stage high-potential projects, connecting them with Chinese audiences, and helping projects grow from 0 to N. BlockFocus (@BlockFocus11): Founded by "Ergou" @CryptoErgou (XHunt Chinese ranking 469), BlockFocus was among the earliest companies in the Chinese-speaking world to develop agency businesses. BlockFocus emphasizes project value accumulation and long-term operation. Shard (@ShardDXB): Founded by @ciaobelindazhou (XHunt Chinese ranking 784), 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 major firms, it prefers to work on "few but excellent" projects, handling everything from mechanism design, strategic consulting, market narrative shaping to execution. Mango Labs (@MangoLabs_): Founded by @dov_wo (XHunt Chinese ranking 112), focusing 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): Founded by @Jeffmindfulness (XHunt Chinese ranking 2178), focusing on content marketing in the Pre-TGE stage, specializing in amplifying project narratives creatively and multilingual KOL placement. 4XLabs: "Strategic Consulting + 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). How to get the attention of project teams/agencies? Typically, project teams or agencies allocate quotas based on KOLs' influence metrics (such as number of followers, past tweet popularity, etc.) and specify content production and unlocking requirements. To secure KOL funding opportunities, the core is to enhance "content + data" and build a trustworthy personal brand: Continuously produce professional content: Consistently publish insightful content such as market analysis, on-chain data insights, or 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: Utilize analytics tools to improve account visibility. For example, use @xhunt_ai to view your account's influence ranking, capability model, and follower count, allowing for precise adjustments to content production. XHunt has also launched a scoring system such as the "Soul Index," which has become an important reference for many projects and agencies in evaluating KOLs. Establish Connections Through Multiple Channels: In addition to online promotion, you can also participate in offline industry events or hackathons to connect with project teams. How Do KOLs Select Projects? KOL funding rounds are not charity; every participant faces pressure to recoup their investment. Choosing the wrong project not only leads to 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. Consider the following key dimensions: Valuation and FDV: Is the overall valuation of the project reasonable? Is the KOL funding round price relatively discounted? Unlocking Design: Are the TGE unlocking ratio and linear cycle healthy? Is there a risk of concentrated selling pressure? Capital Background: Check if there are top-tier VC investors and whether the institutional lineup provides endorsement. Participating Team: Which top KOLs have participated? Are there any signs of joint participation by agencies and individuals? Agency Source: Understand the professionalism of the agency responsible for matchmaking, its past performance, and whether it has participated in high-quality projects. Team Reputation: Does the founding team have past project experience or industry reputation? Does it have a history of controversies? Terms and Conditions: Does the promotional content require prior review? Are there any special arrangements such as guaranteed returns or refund clauses? In addition, tools like XHunt can be used to analyze the reliability of projects, and plugins can be used to view funding information, team information, the number of followers of Chinese and English KOLs and community sentiment, as well as the project's influence ranking. Conclusion: KOL funding is a narrow door left for ordinary people in the primary market. From a higher perspective, KOL funding is a funding tool that has naturally evolved in the crypto industry under the background of prioritizing traffic, narrative leadership, and community-driven development. It lowers the funding threshold, spreads faster, and has indeed helped some small projects stand out without VC support. Of course, KOL rounds sometimes suffer from a lack of standards and ambiguous responsibilities. However, from another perspective, this may be one of the few opportunities for retail investors to "squeeze into the primary market." Compared to traditional private equity dominated by elite VCs and with high information barriers, KOL rounds at least possess a certain degree of liquidity and openness. Any ordinary person, as long as they can consistently create content and have influence, can potentially obtain a quota and truly participate in the primary pricing game. This is not a perfect mechanism, but it is a "makeshift solution" in the current crypto-native capital market. In a stage where rules are not yet formed and trust mechanisms are still being built, KOL rounds, as a new market solution, still have significance. Because in this era, influence itself is a new form of capital.