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<h3>Fireline Report</h3>
<p>Novastro, Kaito Launchpad's first oversubscribed project, plummeted 74% on its opening day, with most public investors suffering losses, testing community trust. The recent increase in the rate of Kaito Launchpad projects falling below their initial offering price presents challenges for ecosystem expansion.</p>
<h3>Trading Guide</h3>
<p>Event-driven, short-term observation is recommended. If the closing price of subsequent projects (TGE) does not return above the public offering cost of 0.05, it is advisable to participate cautiously. The invalidation condition is that new projects continuously retrace to their previous lows.</p>
<p style="margin-top: 20px; text-align: left; opacity: 0.4; padding: 0 42px"><small>Updated at 10-30 17:38</small><br><small>AI-generated summary, not investment advice</small></p></div>

<h1>KAITO&#39;s ecosystem expansion faces a crisis of confidence: frequent underperformance of new projects raises questions.</h1><h2> TL;DR</h2><p> The KAITO ecosystem faced a severe test of trust between September and October 2025, with 80% of new projects experiencing significant drops in value after launch. Projects like Novastro saw their prices fall by 72% from their initial offering price, prompting the community to question the platform&#39;s project selection mechanisms and transparency, resulting in a significant decline in ecosystem participation.</p><h2> Core Analysis</h2><h3> The new project performed poorly.</h3><p> <strong>Statistics on projects that broke their issue price</strong> :</p><table><thead><tr><th> Project Name</th><th> Tokens</th><th> Issue price</th><th> Current Price</th><th> Decline</th><th> ATH decline</th></tr></thead><tbody><tr><td> Novastro</td><td> XNL</td><td> $0.05</td><td> $0.014</td><td> -72%</td><td> -59%</td></tr><tr><td> Everlyn</td><td> LYN</td><td> ~$0.10</td><td> $0.105</td><td> -13%</td><td> -83%</td></tr><tr><td> HANA Network</td><td> HANA</td><td> ~$0.04</td><td> $0.040</td><td> -3%</td><td> -84%</td></tr><tr><td> Boundless</td><td> ZKC</td><td> $0.29</td><td> $0.217</td><td> -25%</td><td> -88%</td></tr><tr><td> Limitless</td><td> LMTS</td><td> $0.05</td><td> $0.349</td><td> +598%</td><td> -27%</td></tr></tbody></table><p> <strong>Key issues</strong> :</p><ul><li> <strong>Immediate selling pressure</strong> : 4/5 of the projects experienced a drop of over 70% after TGE, mainly due to the supply shock caused by the unlocking of 100% or 50% of the tokens <a href="https://www.odaily.news/en/newsflash/454506">.</a></li><li> <strong>Post-hype consequences</strong> : Novastro was 235% oversubscribed, but its stock price plummeted 44% at the open, subsequently continuing to fall to -72%.</li><li> <strong>Sector rotation impact</strong> : The AI/RWA sector experienced an overall correction of 20-30% in October, exacerbating the selling pressure on individual projects.</li></ul><h3> On-chain data shows a decline in ecosystem activity.</h3><p> <strong>Deterioration in participation metrics</strong> :</p><ul><li> <strong>Transfer activity</strong> : down 34% in October compared to September (413,699 vs 624,410 transactions).</li><li> <strong>Number of traders</strong> : Daily active traders decreased by 6% (343 vs 363).</li><li> <strong>Staking Stagnation</strong> : sKAITO staking contracts saw zero net inflows, indicating low user engagement.</li></ul><p> <strong>Impact of the unlock event</strong> :</p><ul><li> Trading volume surged to $8.1 million between September 27 and 29, suspected to be related to the monthly unlocking event.</li><li> The high concentration of holdings, with the top two addresses controlling approximately 55% of the supply, amplifies the impact of sell-offs. <reference tool_id="call_79971797" category="heatmap" project="KAITO" description="KAITO OI USD and 24h change percent by exchange at 2025-10-30 08:55 UTC"/></li></ul><h3> Community trust crisis erupts</h3><p> <strong>Transparency Controversy</strong> :</p><ul><li> <strong>The MemeX incident</strong> : The promised $700,000 in token rewards failed to be delivered to English-language creators, and the funds were transferred to Chinese KOLs, leading the community to accuse it of &quot;fraud.&quot; <a href="https://x.com/hannaXbtc/status/1945776442702483527">x.com</a></li><li> <strong>Insider trading allegations</strong> : Multiple projects have been accused of insider selling; Novastro investors, after losing $11,500, publicly demand the platform be held accountable <a href="https://x.com/CryptoEgeHan/status/1983529271541780920">. (x.com)</a></li></ul><p> <strong>Flaws in the project screening mechanism</strong> :</p><ul><li> Three consecutive projects exhibiting a similar pattern of &quot;oversubscription - rapid unlocking - price crash&quot; raises questions about KAITO&#39;s prioritization of trading volume over sustainability.</li><li> Genesis NFT&#39;s price plummeted 75% immediately after the token snapshot, further damaging the platform&#39;s reputation <a href="https://x.com/andyyy/status/1891702816495882349">.</a></li></ul><h3> Technical indicators confirm bearish sentiment</h3><p> <strong>KAITO token performance</strong> :</p><ul><li> <strong>Current price</strong> : $1.05, down 64% from ATH $2.92</li><li> <strong>Technical indicators</strong> : RSI 43.4 (neutral to bearish), MACD negative, price has broken below all major moving averages.</li><li> <strong>Derivatives Market</strong> : Funding rates are negative (-0.009% to -0.026%), with long positions paying fees to short positions, reflecting bearish market sentiment.</li></ul><p> <strong>Unlocking pressure persists</strong> : Historical data shows that each unlocking event (such as the unlocking of 21.8M tokens in August) is accompanied by a 10-15% price pullback, and the unlocking of 8.35M tokens on October 20th continues to put pressure on <a href="https://coinmarketcap.com/cmc-ai/kaito/latest-updates/">coinmarketcap</a> .</p><h2> in conclusion</h2><p> The KAITO ecosystem, during its rapid expansion, has exposed problems such as lax project selection criteria, insufficient transparency, and flawed token economics design. The dismal performance of 80% of new projects has not only damaged investor confidence but also threatened the platform&#39;s long-term reputation. To rebuild trust, KAITO needs to strengthen project due diligence, improve distribution transparency, and optimize the unlocking schedule to reduce market shocks.</p>


KAITO's new projects are frequently experiencing price drops below their initial offering price, and its ecosystem expansion is facing a test of trust.

<strong>KAITO&#39;s</strong> new projects are frequently experiencing price drops below their initial offering price, and its ecosystem expansion is facing a test of trust.