How long can the "mouth-lifting" economy last? Where is the next stop for encryption marketing?

*Original author | Brain (@BrianAitch) *

Compiled | Odaily Planet Daily (@OdailyChina)

Translator | Ding Dang (@XiaMiPP)

Editor's Note: The "Zui Lu" economy is currently at the forefront of attention, becoming a hotbed for retail investors and project parties to compete. However, this "Zui Lu" craze is facing severe challenges: the proliferation of low-quality content, rampant volume manipulation, and users' increasing fatigue towards "reward-driven" tactics, leading to a continuous decline in conversion rates. Taking Loudio as an example, its market value plummeted from 98 million USD to 3,800 USD within 25 days, exposing the vulnerability of the "Zui Lu" economy's over-reliance on noise-based marketing. This article analyzes the pain points of the current "Zui Lu" economy, explores its impact on crypto project marketing, and reconsiders the fundamental limitations and areas for improvement in current crypto project marketing.

1. Low efficiency in marketing cost.

Most projects invest heavily in marketing partnerships similar to Kaito. Just to launch Kaito Earn, a prepayment of hundreds of thousands of dollars is required, and then a monthly investment of an equivalent amount in tokens or dollars must continue.

Kaito can indeed play a certain role in brand exposure and topic initiation; however, most of these interactions are driven by content creators with limited influence, resulting in overall low quality and signal strength.

What the project truly desires are high-quality dialogues that can resonate with the community, convey brand values, and ultimately achieve effective conversion. However, such dialogues are rare.

2. Evaluate marketing effectiveness from conversion rate data

Cryptocurrency projects typically have two main goals:

• Increase product user base
• Increase token price (i.e., more token buyers after TGE)

(Data source: Dune @hashed_official)

For example, Loudio:

• Among the participants in the first phase, the proportion of those who received additional quotas is approximately 1.54% (15/973)
• The second stage is 1.93% (/4102)
• In comparison, the conversion rate for Google Ads is approximately 4.29% ~ 6.96%

In other words, Loudio's overall conversion rate is much lower than that of traditional digital advertising.

3. The "noise" issue caused by a lack of substantial content.

Many brands allocate a large portion of their marketing budgets to create "hype" on X, heavily relying on the InfoFi platform. However, without substantial content, these marketing outputs ultimately become meaningless noise.

Citing the example from @Chilearmy 123: Even if Project K announces rewards of over $15,000 per month to Kaito users, what the public will ultimately remember is "Project K is very good at giving away money." If it launches a "mascot Meme coin" and adopts a distribution method similar to Loudio, people will naturally start discussing its significance, community culture, user experience, and other topics.

Therefore, instead of relying on platform tools, it is better to choose clear themes and specific incentive mechanisms, such as games, meme coins, or DApps. These topics are more likely to provoke active discussions and high-quality conversions from users.

If a project relies solely on incentive mechanisms to attract early users on the left side of the marketing curve, but lacks substantial content, then it will ultimately be difficult for these individuals to truly convert and move into the next stage.

4. Return to the fundamentals of products and teams

Borrowing @leonabboud's analogy:

The project is an instrument, marketing is a speaker or sound system.

Many teams try to cover up the "instruments that are not tuned well" (imperfect products) with a bigger "sound system" and the "technically challenged performers" (incompetent teams).

While this can increase exposure in a short period, if the project itself lacks fundamental skills, even popular tools like Kaito cannot achieve the desired results.

As the cryptocurrency industry matures and participants become more specialized, believing that "spending money to buy popularity" can bring real value underestimates the wisdom of the market and users.

5. The structural contradictions of InfoFi

The misalignment between the InfoFi platform and crypto projects in terms of incentive structures and goals is becoming increasingly apparent.

The InfoFi platform aims to attract more incentives (such as USDC, project tokens), collect fees, distribute rewards, and expand the user pool;

What the project team truly cares about is whether users will: actually use the product or continue to purchase tokens after the TGE.

Currently, most activities on InfoFi are still dominated by "contract-based" creators, whose influence is limited, leading to an overall conversion rate that is even lower than traditional advertising channels.

In my opinion, the platform that can win in this round of InfoFi competition needs to solve the following two core issues:

• Empower high-signal, high-quality creators to drive authentic community-driven dialogue;
• The platform incentive structure must align with the project's incentive goals, as the rewards provided by the project party are the fuel for InfoFi's operation.

We can already see early signs of this trend, indicating that InfoFi is moving towards a more sustainable and productive stage of development.

Case Study

Virtuals

Although Virtuals is not an InfoFi platform, the data shared by its co-founder @ethermage reflects the distribution platform's high focus on "conversion rates" and "incentive mechanisms:"

About 35% of Genesis participants made additional token purchases in the secondary market.

The team is optimizing the allocation mechanism, with a greater inclination to reward steadfast holders, especially those users who have doubled down on their beliefs.

This approach reflects the industry's gradual alignment towards the goal of "conversion-oriented + long-term value creation".

Kaito

Kaito is actively responding to community feedback and updated the algorithm on June 17, with the main changes including:

1) Quality vs Quantity: Posts that only mention rewards or rankings without providing valuable insights or project reviews will no longer receive attention;

2) Attention Distribution Mechanism: To prevent a single piece of content from excessively dominating the rankings, there is a cap on the total amount of attention that can be gained in each cycle, and a single tweet cannot hold an excessively high weight;

3) Anti-"Clique" Mechanism: The platform closely monitors internal interactions and has strong protective measures in place to curb behaviors such as interaction spamming and "group score boosting".

4) Loyalty Incentives: The platform encourages users to maintain long-term, value-oriented participation while avoiding punitive restrictions on widespread participation behaviors;

5) Team Control Rights: The project team can customize the maximum attention value contributed by tweets each week, enhancing platform flexibility.

Since the launch of Kaito Earn, it has always focused on user conversion. This is reflected in the data shared by @MagicNewton:

Currently, 33,699 agent accounts have been activated through Kaito, accounting for about 30% of Newton's total activity. These agents continuously bring fee income to Newton by purchasing BTC, KAITO, and other assets. The number of activated agents is still steadily increasing.

To fully assess Kaito's performance in the "conversion engine", attention should be focused on the following key indicators:

• TGE After-Agent Account Retention Rate
• The fee yield from Kaito Earn relative to platform expenditures
• Among the users participating in Kaito Earn, how many have made additional purchases of tokens on the secondary market?

Although more time and data are needed to draw a final conclusion, it is clear that: Kaito has a clear understanding of the importance of conversion rates and is continuously optimizing its algorithm mechanism based on community feedback.

Clout

Kaito is not the only InfoFi project adjusting algorithms to improve conversion efficiency. On June 25, 2025, @fantasy_top_ launched Clout Pro and collaborated with @monstersdotfun to kick off Week 0 activities.

Clout Pro is an API and SDK for engagement tracking, helping project teams quickly build leaderboards and identify the most active users.

Key features include:

• Anti-Manipulation Protocol: Built-in mechanisms to prevent刷量, farming, and false interactions;
• Customizable Analysis Tools: Support for sentiment filtering, keyword recognition, anti-farm mechanisms, etc.

After issuing tokens and points, the platform will focus on monitoring the proportion of users who make additional token purchases. This mechanism is more complex than Loudio, as it is influenced by multiple factors such as NFTs, Abstract levels, Ethos scores, and tokens.

It is worth noting that the Clout team is continuously optimizing its social and incentive algorithms and providing customized support for project parties. This flexible mechanism is expected to improve conversion rates, but the ultimate effect still depends on the alignment between execution and strategy.

Currently, there are platforms such as @cookiedotfun's Snap participating in the competition within the InfoFi ecosystem. Although it is still impossible to determine who will ultimately prevail, one thing is certain:

Whoever can provide the largest reward pool, the most refined incentive alignment mechanism, and achieve real user conversion will stand out in this round of the InfoFi cycle.

6. Conclusion: What you need is not a bigger horn, but a better melody

• Marketing is only effective when the project's fundamentals, such as product, information, and community, are solid.
• What we truly need is more beautiful music, not louder speakers.
• The InfoFi platform should focus on helping projects improve conversion rates, whether by increasing the number of platform users or by promoting token purchases in the secondary market.
• The key to success is not reaching the widest audience, but how to effectively convert that audience.
• The InfoFi platform, which can precisely align the incentive structure with project goals, provide ample reward pools, and attract high-quality creators, is most likely to succeed in this game.

I myself am also a staker of Kaito. If you disagree, you might be right.

Attention is not everything.