Kaito Kickstarter Tokens Crash After TGE, FDVs Plunge

Four blockchain projects launched through Kaito Kickstarter have suffered massive valuation collapses following their token generation events. Fully diluted valuations have dropped by as much as 98% from initial figures, according to CoinGecko data cited in market reports.

Several projects backed by Kaito Kickstarter saw significant post-TGE drawdowns. Play AI, launched at a $50m, now has an FDV of only $2.1m; Hana Network, launched at a $40m valuation, now has an FDV of $10.5m; Novastro, launched at a $50m valuation, now has an FDV of $1.05m; and…

— Wu Blockchain (@WuBlockchain) December 18, 2025

Play AI‘s FDV crashed from $50 million to approximately $2.1 million. Novastro experienced similar devastation, plummeting to $1.05 million from its initial $50 million valuation. Hana Network fell from $40 million to $10.5 million, while Bitdealer declined to $2.8 million from $35 million.

Out of five projects launched through the Kaito program, four have experienced substantial post-TGE valuation declines. One project has yet to undergo its token generation event. These collapses highlight the severe volatility and risk embedded in early-stage crypto investments.

Secondary Market Trading Exposes Kaito Token Fragility

Analysts attribute the dramatic FDV drops to structural repricing when tokens reach secondary markets. FDV calculations multiply a token’s total supply by its current market price, creating figures that can shift rapidly under real trading conditions.

Pre-TGE valuations often rely on private sale pricing or speculative demand rather than actual market liquidity. When tokens become tradable, genuine price discovery reflects authentic buying and selling pressure from market participants.

Early holders frequently choose to sell after listing while buyer demand remains limited. This imbalance causes prices to fall rapidly, pulling down FDV figures in turn. A blockchain economist noted that actual supply meeting real demand drives prices far below pre-TGE expectations.

Market observers point to high immediate token unlocks as a common characteristic of recent TGEs. When combined with thin exchange liquidity, even modest selling walls can significantly depress prices in the first hours and days of trading.

InfoFi Platforms Face Growing Backlash

The Kaito ecosystem has drawn criticism beyond token performance issues. Blockchain investigator ZachXBT launched a $5,000 bounty campaign in December to scrape user data from InfoFi platforms including Kaito Yaps, Galxe, Layer3, Cookie, Wallchain, and Xeet.

ZachXBT accused these platforms of incentivizing AI-driven posting behavior that floods feeds with low-value submissions. He claimed even donation threads for open-source developers were being overrun with automated content.

Opposition to InfoFi influencers has intensified throughout 2024. More community members have complained about engagement-driven scoring systems that reward volume over meaningful contributions. Critics say the model creates cycles where projects must constantly manufacture hype.

Ubee, a former Vertex Protocol support team member, called InfoFi platforms the “most widely promoted scams” in this crypto cycle. The crypto trader argued that communities evaporate after TGE events, leaving projects to reset toward zero.

InfoFi applications emerged to reward users for producing analysis, predictions, and market commentary. Their systems rely on AI models, token rewards, and community moderation to determine contribution value. Proponents claim the model transforms information into tradable assets.

However, critics argue these incentives are exploited by automated bots and coordinated groups seeking to maximize token earnings. Commentator Azel noted that algorithms reward activity and engagement, causing user bases to stop thinking and start executing tasks.

Some users claim InfoFi platforms have begun extracting value from their own communities. Contributors report feeling “farmed” alongside the data they produce. One NFT enthusiast complained about promoting projects only to receive minimal returns for their time investment.

ZachXBT posted updates confirming progress on his bounty campaign. Data scraping for Xeet, covering 144,000 X accounts, was completed within hours of the announcement. The investigator offered separate rewards for datasets from each targeted InfoFi platform.

The combination of token crashes and platform criticism creates mounting pressure on the Kaito ecosystem. Industry participants warn that high FDV figures do not guarantee post-listing performance. Valuation resets after TGE events remain common in speculative token markets.