Kaito has launched his token with an airdrop today, and the market has witnessed significant volatility due to early sell-offs. Kaito's tokenomics have allocated 10% of the tokens to his dedicated community, which has caused some controversy.

However, this structured distribution may ultimately help strengthen the long-term sustainability of the token by limiting the ability to dump large quantities at once.

Kaito airdrop sparks mixed reactions

Kaito, an ambitious AI-powered social media tokenization project, has been generating a lot of attention recently. It has established a reputation as a Web3 information platform, but last week, it released a whitepaper for an even more ambitious project.

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

"Announcing KAITO's tokenomics! 56.67% is allocated to the Community & Ecosystem. Of this, 19.5% is for the initial and long-term community airdrop and incentives. For the Initial Community and Ecosystem Requests - this 10% Allocation includes the initial Kaito Yapper community, Genesis NFT holders, and partners and yappers in the ecosystem," the company stated.

While Kaito's airdrop has many motivations behind it, the community has had a mixed reaction to the token distribution. For example, the Binance BNB community received 2%, even though they only announced the Kaito listing yesterday.

Many users believe that the 10% allocation is quite low for a community that has supported the Kaito AI platform for a long time. However, many other users have expressed satisfaction, saying that the airdrop does not create sustainable value.

"If this doesn't create too much FUD, then optimistic as the selling pressure will be lower on the first day. I'm grateful for whatever I'll receive. I'm a big fan of what the Kaito team is doing and want them to succeed long-term. Even if I sell some KAITO, I'll continue to support and cheer for their success," wrote Ignas, a prominent DeFi influencer.

Kaito's airdrop has witnessed a trading pattern similar to recent projects. The token launched at $1.40, and airdrop recipients have sold, leading to a 30% decline.

However, these sell-offs are significantly lower than other airdrop projects like Berachain, which dropped more than 50% on the launch day.

Looking ahead, Kaito has some positive tailwinds to help recover the price after the airdrop. First, Coinbase has announced that they will list the token by the end of the day today.

The "Coinbase effect" has been clearly documented, causing token values to rise due to the exchange's influence. This effect has been demonstrated just yesterday, and Kaito is likely to benefit as well.

However, Kaito now has a bigger question. Its stated objective, using AI and tokens to incentivize good social media content, is extremely ambitious.

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