Is traditional rug-pulling dead? Community incentive-based ICOs may become the primary airdrop method.

The project party no longer wants to distribute tokens for free to community members through airdrops. In the future, it will focus on sustainability and intelligent incentives for the real community to ensure the long-term development of its network and brand.

Written by: Yu Hu, Founder of KaitoAI

Compiled by: AididiaoJP, Foresight News

In the past 8 months, I have closely witnessed approximately 30 Token Generation Events (TGE) through Kaito's partner projects and our own projects. Undoubtedly, there have been profound changes in the entire field during this period. This article will explore the following topics based on my experiences and latest thoughts:

• Why is the paradigm of Token distribution changing?
• What is a good Token distribution and how to achieve it?
• Intelligent Incentive Culture: Incentive Alignment and Non-Incentive Signals
• Why data-driven ICOs may become a new paradigm alongside Airdrops

Why the Paradigm of Token Distribution is Changing

Since the historic Airdrop of Uniswap in 2020, the crypto industry has rapidly embraced this Token distribution model, partly because it strongly resonates with the spirit of crypto, and partly due to the opportunities for regulatory arbitrage.

Looking back, this trend may peak at the end of 2024 during Hyperliquid's TGE. Hyperliquid's Airdrop is another historic moment that is hard to replicate. For all of us, Hyperliquid has done an excellent job with the Airdrop, truly inspiring many founders who are considering giving away large amounts of Tokens for free to the community.

However, when the project party began to prepare for their TGE, they quickly realized that this was entirely a different matter:

1. When it is necessary to bring in more than 10 intermediaries to ensure accessibility and liquidity, Hyperliquid is able to complete these tasks entirely in-house.
2. When 99% of projects do not have substantial revenue streams like Hyperliquid to support large-scale buybacks.

Compared to 2021, tokens in this cycle will face a more severe liquidity crisis if they do not integrate strong buyer mechanisms, especially on the demand side. Most new tokens have seen their prices plummet sharply and rapidly, and this trend has led to a shift in community culture from "diamond hands" (long-term holding) to early selling, which in turn further creates a self-reinforcing cycle.

What are the results? More teams are now rethinking the gameplay of community distribution. Clearly, at least some projects are exploring alternative structures such as ICO models like pump.fun, Plasma, and Sahara, as well as traditional Airdrop models.

For the project party, ICO creates a demand-driven dynamic: true supporters can invest and exist with a cost basis. In contrast, in a pure airdrop model, the community signal effect is weaker, and non-supporters may become zero-cost recipients.

Does this mean that all community airdrops will come to an end? I don't think so. Airdrops still have significant marketing and community building value: identifying, rewarding, and nurturing a loyal community remains a key determinant of project success and long-term development.

However, I believe that as an industry, Airdrop increasingly needs to be combined with clearer alignment and signaling mechanisms, which is equally applicable to broader Token distribution and incentive design.

Therefore, I believe there will be a growth trend in the future, with more thoughts and experiments on how teams assess and reward past contributions, weigh the costs and benefits of liquidity venues, create opportunity costs, design alignment and signaling mechanisms, and explore all possible ways to expand high-quality distribution.

We all need to think about the implications of these changes and establish a sustainable culture and expectations for all participants, including the community, team, exchanges, funds, etc.

What is a good Token distribution, and how to achieve it

In my opinion, a good Token distribution should:

• Participants are rewarded based on community consensus and alignment.
• Use non-incentivized behavior as a signal;
• Broadly relevant means providing ample opportunities for people to participate throughout the process.

To achieve this, I believe several key transformations are needed:

• More powerful data analysis capabilities to identify meaningful signals;
• Clearly focus on designing mechanisms that can highlight these signals;
• Reset expectations for all parties involved.

Therefore, the future of Token distribution will revolve around sustainability and intelligent incentives for real communities, to ensure the long-term development of its network and brand.

Smart Incentive Culture: Incentive Alignment and Non-Incentive Signals

As part of this transformation, I believe the industry will move towards more data-driven Token distribution and smarter incentive design, where return on investment (including tangible and intangible) will become the core evaluation metric. This emerging culture is built on two main pillars:

• 1. incentive alignment
• 2. non-incentive signal

Incentive alignment refers to behaviors involving opportunity costs (whether based on capital or social) and serves as a credible signal for future community formulas. For example, participating in ICOs, TVL commitments, holding community NFTs, and public social advocacy. Alignment can be encouraged through incentives, but to be meaningful, it must involve real scarcity or costs; otherwise, it may degrade into low-value signals.

On the other hand, non-incentive signals capture organic behaviors that reveal true intentions. This may include participation during non-incentive periods or any unexpected mechanisms. Hyperliquid's point distribution between seasons is a typical example of this practice.

Nowadays, most markets integrate these two behaviors when setting strategies. The effectiveness of any activity depends on how the team balances incentive alignment with non-incentive signals, as well as how it measures the return on investment of both.

Why Kaito Launched the Token Launch Platform and Our Views on the Data-Driven Future of ICOs

We believe that if designed properly, public sales have the potential to combine the advantages of both: incentive alignment and non-incentive signals. The key lies in adopting a data-driven approach: accurately determining who receives the allocation and how to predict future value contributions. As a leading data analytics platform in the crypto space, with extensive coverage, we believe Kaito is best positioned to make this model work.

We call this model "data-driven ICO" and believe it provides the team with an appealing option, whether for market entry execution or optimizing Token distribution.

• A well-structured ICO can test people's consensus beliefs and filter out non-supporters;
• The allocation is optimized by combining the best signals from historical contributions and future value contributions;
• A well-planned ICO invites new members to join and expand the distribution range;
• As a non-incentive event, it is also a powerful signaling mechanism.

Take a simple example, imagine a sales style similar to pump.fun, but instead of being based on who is fastest on the exchange (first come, first served), it considers product usage, social advocacy, on-chain and off-chain reputation, beliefs, and geographical balance in global community building...

Such distribution puts the Tokens in the hands of the right people and provides more confidence in establishing a culture of alignment and common prosperity for the community.

Conclusion

We are迎来 a key moment in the industry to rethink what is effective and what is ineffective.

For an industry that self-regulates through a free market, the path forward should always involve redesigning incentive mechanisms and improving coordination systems.

I believe that as cryptocurrency technology becomes more widespread globally, our field will become more mature, and we as an industry can not only lead in cutting-edge infrastructure but also build a new global coordination engine using Tokens as underlying incentive tools.

This, in my opinion, requires a whole new approach: one that utilizes more advanced data and data analytics methods in everything we do, from Token distribution to designing and aligning incentives.