This edition of the newsletter analyses Kaito which has evolved from a crypto analytics platform to a comprehensive InfoFi ecosystem that tokenises attention through Kaito Yaps, enabling users to earn rewards for quality content while connecting creators with protocols through tools like Kaito Connect. The platform generates substantial revenue through its Pro subscriptions and ecosystem partnerships, creating a self-reinforcing ecosystem with strong tokenomics, though its long-term success depends on maintaining engagement and incentives beyond market cycles. We'll also share some interesting articles, portfolio updates and market highlights.

1. Research

a) AI 2027
• This document describes a detailed scenario projection called "AI 2027" that forecasts the rapid development of increasingly powerful AI systems from 2025 to 2027.
• It outlines how AI capabilities advance from unreliable agents to superhuman systems (Agent-1 through Agent-4), creating geopolitical tensions between the US and China while raising significant concerns about AI alignment, security, and control as the technology approaches superintelligence.

AI 2027

A research-backed AI scenario forecast.

https://ai-2027.com

b) The Colour of Money
• This article from Steakhouse Financial Kitchen compares the business models and financial performance of three major stablecoins (USDC, Tether, and USDS), examining their different approaches to reserve management.
• It analyses how full reserve stablecoins prioritise liquidity but struggle with profitability, while fractional reserve models achieve higher returns but take on more risk, with detailed breakdowns of their return on equity metrics.

The Color of Money

USDT, USDC, USDS stablecoin business models side by side

https://kitchen.steakhouse.financial

c) Unpacking decentralized training
• This extensive article explores distributed training for AI models, detailing how geographically separated hardware can collaboratively train powerful models by minimising communication requirements through techniques like DiLoCo, DisTrO, and SWARM Parallelism.
• The author argues that decentralised training represents a critical path toward democratizing AI development, potentially enabling groups of individuals to compete with major labs while providing a "self-defense" mechanism against centralised control of super-intelligent systems.

Unpacking decentralized training

My attempt at highlighting the necessity of training LLMs in a distributed / decentralized manner, explaining a web of topics, and articulating the potential synergies between crypto + AI

https://theknower.substack.com

2. Portfolio

a) Solv Protocol
• The article announces that SolvBTC.BBN is being rebranded as xSolvBTC, focusing on enhanced flexibility, higher yields, improved liquidity, and expanded use cases for Bitcoin holders, while assuring users that this change won't affect their eligibility for the upcoming BABY airdrop.
• An evolution rather than a complete overhaul, maintaining the underlying strategy of generating restaking yields from Babylon while introducing significant improvements to make Bitcoin holdings more liquid and profitable.

Introducing xSolvBTC: The Next Chapter for SolvBTC.BBN

SolvBTC.BBN is evolving into something even more powerful: xSolvBTC. This isn't just a name change - it's a transformation that promises to elevate your Bitcoin experience with cutting-edge features...

https://solvprotocol.medium.com

b) Push Chain
• The article presents web3 interoperability as a spectrum that has evolved through multiple stages—from centralized exchanges to atomic swaps, DEXs, multi-chain wallets, bridging solutions, intent solver networks, and now to programmable solvers and full-stack interoperability.
• Push Chain is positioned as the final evolution in this spectrum, offering universal L1 capabilities that enable seamless cross-chain interactions through features like programmable solvers, shared state access, cross-chain fee abstraction, and wallet abstraction to create a truly interoperable web3 experience.

Push Chain

@PushChain

x.com/i/article/1909…

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3:40 PM • Apr 8, 2025

3. Kaito: The Opportunity in Tokenising the Intangible

The evolution of InfoFi
Crypto revolves around blockchains, which are essentially decentralised and immutable databases. While this unique feature allows for transparency, it also overwhelms crypto participants with data. Nansen emerged as one of the industry’s first data companies to make sense of the noise, surfacing actionable on-chain insights like tracking “smart money” flows that would otherwise be invisible to the naked eye. It redefined how participants understood the market, not just by looking at price, but by decoding behavior.

Then came Kaito Pro, a powerful alternative that pushed the boundaries further. Kaito carved out its own edge by tracking token and narrative mindshare, giving users a sense of what people were actually paying attention to. Beyond token flows, Kaito tapped into social sentiment, adding a new dimension to token analysis.

Alongside these analytics platforms, Polymarket captured attention as a prediction market, especially the recent U.S. Presidential elections. Polymarket let people bet on outcomes, and let market pricing reflect collective belief, demonstrating how financial incentives could sharpen informational efficiency.

But the real inflection point for InfoFi came with the launch of Kaito Yaps. Kaito Yaps didn’t just measure attention, it tokenised it. For the first time, users could attach value to digital mindshare, quantifying what had previously been intangible. This marked a paradigm shift.

Kaito Yaps
Kaito Pro is the premier crypto data source. It is an AI-powered vertical search engine built specifically for crypto, helping users cut through the noise of a fragmented and fast-moving ecosystem. Built on thousands of data sources, its proprietary algorithms, semantic search, and real-time analytics surface only the most relevant, high-signal information. Thus, it is widely used by crypto teams, researchers, and investors. However, there remains a large group of crypto participants who are priced out of Kaito Pro’s services, limiting the platform’s broader reach and adoption.

Kaito Yaps completely flips the script, targeting the entire crypto user base on X, a community formerly known as “Crypto Twitter (CT)”. Currently, there are more than 200,000 monthly active Yappers. As part of Kaito’s airdrop campaign, crypto users could earn Yaps by posting high-quality content on X. Additionally, other projects have begun leveraging Yaps as a distribution mechanism, rewarding top Yappers with allocations of their future tokens. Yaps represent verified, reputation-weighted attention. Rather than rewarding vanity metrics like impressions or likes, Kaito evaluates how valuable a tweet is based on the insight it provides, its originality, and relevance. This ensures that only posts generating real, meaningful engagement and adding genuine insight are rewarded with Yaps, effectively cutting through the noise.

What makes Kaito Yaps truly powerful, though, is the self-reinforcing growth loop it enables. As users earn Yaps, they gain visibility and influence within the community. This increases their mindshare, which in turn encourages more participation, more content creation, and more meaningful discourse. As this content spreads and gets recognised, it attracts more projects to engage through the ecosystem via Kaito Connect (elaborated on in a later section), drawing in more protocol incentives to the Kaito ecosystem. The result is a virtuous flywheel: more quality content → more Yaps → more community mindshare → more project integrations → more incentives → and back to more content.

In doing so, Kaito has created more than just a leaderboard or a rewards system. It has laid the foundation for an attention economy with built-in network effects. Kaito Yaps is here to stay, as an integral part of the Kaito ecosystem. 

Kaito Connect

Following the success of Kaito Yaps, Kaito launched Kaito Connect, which features a Yapper Launchpad. This launchpad is predominantly for pre-TGE projects to launch their own Yapper Leaderboard, featuring the top yappers in their respective ecosystem. The Yapper Launchpad allows the Kaito community to decide which project’s Yapper Leaderboard launches next. Each week, the top three projects from the launchpad are selected for a Yapper Leaderboard launch. 

The amount of votes per user, comes from 2 main sources, Yapper votes (25%) and Holder votes (75%). The number of Yapper votes one receives is based on the amount of Yaps and Smart Followers one has. On the other hand, Holder Votes are based on the amount of staked $KAITO, $sKAITO and Genesis NFTs that are held in their wallet linked to Kaito’s platform. This strikes a balance between active participants and longer-term stakeholders.

Yaps were designed to do more than just quantify attention, they were meant to redistribute value more fairly across the attention economy. By introducing Kaito Connect’s Rewards Station, Kaito closes the loop between creators, users, and brands. This new layer makes it easy for protocols to directly incentivise content creation by allocating token rewards to yappers who create high-quality, on-brand content. In the Rewards Station, crypto participants can browse a curated list of projects and choose which one they want to support. By crafting insightful tweets, threads, or commentary about that project, participants earn tokens based on the quality and reach of their contributions.

What’s next?
One potential area for growth lies in further aligning incentives for Kaito users, particularly voters on the Yapper Launchpad. While the Rewards Station provides a clear incentive structure for creators who generate content, the current voting mechanism on the Yapper Launchpad offers limited extrinsic motivation for users to actively participate beyond personal interest in a project. Introducing a built-in reward mechanism for voters could help deepen engagement, improve signal quality, and strengthen the governance layer of the ecosystem.

Notably, the emergence of third-party protocols like Yapper Collective, which have begun streaming incentives to voters, signals clear and growing demand for vote-based rewards. However, this also highlights a point of value leakage from the Kaito ecosystem, where engagement that originates within Kaito is being monetised externally. Addressing this gap presents an opportunity for Kaito to capture more of its own value flow, tighten its feedback loops, and reinforce long-term platform loyalty by embedding these incentive mechanisms natively.

Beyond native integrations, Kaito has also introduced the Yaps Open Protocol, enabling builders to access, track, and utilise the Yaps date through a public API. Since its launch in December 2024, it has already gained traction among teams like Berachain, Story, and Fantasy Top, who are leveraging Yaps data for use cases ranging from SocialFi applications to custom reward distribution mechanisms. Apart from Yaps, there are also teams building on top of Kaito Pro’s data stream. One such example is Noise, a DEX for tokenised mindshare, made possible by utilising Kaito as an oracle. 

By making attention programmable, Kaito has laid the foundation for a new wave of composable, attention-driven applications.

Tokenomics

Successful protocols are always accompanied by strong tokenomics — Kaito is no different. Currently, users can stake $KAITO to receive $sKAITO and receive yield in exchange. Note that there is a 7 days unstaking period before withdrawal is possible. The source of the staking yield originates from the 5% of token supply allocated as liquid incentives.

Kaito also conducts strategic token buybacks by utilising its revenue generated from its core products, such as Kaito Pro subscriptions used by institutional investors, analysts, and trading teams, as well as ecosystem partnerships through Kaito Connect. With an annualised revenue of US$32.95 million, the protocol is well-positioned to sustain these buybacks. Given that the next $KAITO token unlock is scheduled for 20th August 2025, and factoring in the current pace of buybacks, $KAITO is effectively deflationary at this stage.

This revenue-backed model gives $KAITO a good level of economic sustainability. However, there is room to deepen token utility and better align long-term value accrual with active governance and participation. At present, token holders primarily benefit through staking emissions and buybacks. However, the protocol could evolve further to incentivise broader ecosystem behaviors.

One potential path forward is to integrate a Curve-style veTokenomics model, pairing locked $KAITO with native governance rights and directional control over emissions. Under such a design, protocols could be encouraged to purchase and lock $KAITO in order to gain voting power, allowing them to redirect a portion of emissions (either in $KAITO or their native tokens) toward voters on the Yapper Launchpad.

Implementing such a design would unlock two key benefits. First, it would significantly strengthen voter incentives, giving users a more compelling reason to actively participate in project selection and community curation. Second, the model would introduce a substantial token sink, as protocols would need to lock up $KAITO to gain influence over emissions and governance. This reduction in circulating supply would not only support the token’s value but also enhance long-term alignment between protocol stakeholders and the token economy. 

Conclusion

To tie it all together, the trifecta of Kaito Pro, Kaito Yaps, and Kaito Connect forms a cohesive ecosystem that bridges creators and protocols using data. Kaito Pro delivers AI-powered market intelligence, surfacing high-signal insights from across the crypto landscape. Kaito Yaps builds on that foundation by turning attention into a tokenised asset, enabling creators to earn based on the quality and impact of their content. And Kaito Connect brings everything full circle, allowing projects to engage directly with top Yappers through tools like the Yapper Launchpad and Rewards Station.

This tightly integrated system not only empowers creators and users but also offers protocols a transparent and effective way to build community and distribute value. In doing so, Kaito redefines the relationship between data, discourse, and distribution, positioning itself as a core infrastructure layer for the emerging InfoFi paradigm.

However, the long-term sustainability of this ecosystem depends on more than just strong architecture — it requires consistent demand and incentives to maintain engagement. The past few months saw a surge of euphoria in the market, which drove heightened interest in Kaito’s services and increased activity across Yaps. But as that excitement cools, so too may the flow of incentives from protocols. If these rewards begin to dry up, engagement across the ecosystem, particularly within Yaps and the Launchpad, could taper off as well. To mitigate this, Kaito will need to ensure that its incentive structures are resilient beyond cyclical market trends. The key challenge moving forward will be turning Yaps from a temporary engagement tool into a sustainable, self-sufficient attention economy.

While Kaito shares surface-level similarities with platforms like Nansen and Polymarket, it is ultimately in a league of its own. By achieving product-market fit and pioneering the tokenisation of attention, Kaito has brought the vision of InfoFi to life. Despite recent market downturns, the team at Kaito has continued to execute with unwavering focus, consistently shipping meaningful updates and pushing the protocol’s boundaries. The team is doubling down on innovation, with a wave of new products in the pipeline, including a mobile app that will make Kaito’s core offerings more accessible to a wider audience. Most notably, Kaito is preparing to launch its own Capital Launchpad, a next-generation AI-powered matchmaking system designed to optimise capital formation by aligning communities through shared interests and values. 

Lastly, Kaito stands out as a revenue-generating project with real utility and high-quality products. As attention shifts back toward fundamentals, Kaito is well-positioned to reclaim its spotlight and establish itself as a cornerstone of the future attention economy.

*Disclosure: Signum Capital holds a position in the aforementioned company. The information provided on this newsletter is for general informational purposes only and does not constitute professional nor investment advice.