Kaito launched its token with an airdrop today, and the market saw notable volatility due to an early sell-off. Kaito’s tokenomics allocated 10% of tokens to its dedicated community, which rankled a few feathers.

However, this structured distribution could ultimately strengthen the token’s long-term sustainability by limiting the ability to offload large amounts at once.

Kaito Airdrop Triggers Mixed Reactions

Kaito, an ambitious AI social media tokenization project, has been generating a lot of buzz lately. It already established a reputation as a Web3 information platform, but last week, it released a whitepaper for a much more ambitious project.

Essentially, Kaito plans to use AI to incentivize meaningful content on social media platforms, and its airdrop began today.

“Announcing the KAITO tokenomics! 56.67% is devoted to Community & Ecosystem. Of that, 19.5% going towards initial and long term community airdrops and incentives. For the Initial Community and Ecosystem Claim – 10% This allocation includes the initial Kaito Yapper community, Genesis NFT holders, and ecosystem yappers and partners,” the firm claimed.

Although Kaito’s airdrop had a lot of momentum behind it, the community had a mixed response to this token distribution. For example, Binance’s BNB community received 2%, even though it only announced a Kaito listing yesterday.

Many users believe a 10% distribution is notably low for a community that has been supporting the Kaito AI platform for so long. Still, many other users expressed satisfaction, claiming that airdrops don’t create sustainable value.

“If this doesn’t generate too much FUD, then bullish as less selling pressure on day 1. I’m grateful for anything I will get. Big fan of what Kaito team is shipping and want them to succeed long term. Even if I sell some KAITO, will continue to support and root for them to suceed,” wrote Ignas, a popular Defi influencer.

The Kaito airdrop saw a similar trading pattern as other recent projects. The token launched at $1.40 and airdropped users cashed out, which triggered a 30% decline.

However, the sell-offs were considerably low compared to other airdrop projects like Berachain, which declined over 50% on launch day.

Looking forward, Kaito has a few bullish advantages to help regain price after the airdrop. First of all, Coinbase announced that it would list the token later today.

The “Coinbase Effect” is well-documented, causing tokens to jump in value thanks to the exchange’s influence. This effect proved influential just yesterday, and it’s very likely that Kaito will benefit too.

Now, however, Kaito has a bigger question. Its stated goal, using AI and tokens to incentivize good social media content, is extremely ambitious.

The airdrop has taken place, and Kaito’s ecosystem is live. Regardless of how much momentum the token has, the project will need to make real progress on its stated goals to maintain its relevance in the long term.