Taking Myshell and Kaito as examples, analyzing the challenges faced when projects return to long-termism
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Taking Myshell and Kaito as examples, analyzing the challenges faced when projects return to long-termism
The pain caused by returning to long-termism makes pricing strategy a double-edged sword.
Navigating Web3 tides with focused insightsAuthor: @BlazingKevin_, Researcher at BlockBooster
CEXs are facing a shift in consensus as users lose confidence following new token listings. While one or two projects may buck the trend, most cannot escape the gravitational pull of a one-sided downward trajectory. If this consensus continues to strengthen—evolving from a span of a few months into a full bull-bear cycle—the user retention and growth rate of CEXs could suffer severe damage.
The core conflict lies in the pricing disconnect between users and project teams. Projects need retail investors to absorb initial costs, while large portions of VC-allocated tokens remain locked, making high FDV (Fully Diluted Valuation) the default upon launch. Combined, these factors inevitably push TGE (Token Generation Event) prices above retail investors' psychological thresholds.
The strategy of high FDV with low market cap (MC) was acceptable in previous bull-bear cycles because the "Buy and Hold" consensus would eventually reward diamond-handed holders. However, this consensus began weakening after Bitcoin gained ETF approval and was completely shattered over the past year by the memecoin frenzy. BTC has become deeply tied to U.S. equities, acting as a reservoir for dollar-denominated assets and decoupling early from the traditional four-year cycle. Meanwhile, the trifecta of zoo coins, AI agents, and celebrity tokens elevated memecoins to godhood—only to see them crash just as fast. Retail investors can no longer adapt to the market-making cycles of VC-backed tokens. The market has undergone radical transformation, yet VC tokens continue riding an inertia-driven death train, unaware of their fate. This death spiral is driven by three key factors:
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Due to large locked allocations for VCs and teams, only a small portion circulates early. The inflated FDV makes retail investors—who are accustomed to memecoin valuation models—extremely uncomfortable.
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Even with limited circulating supply, project teams are unwilling to let go, covertly reclaiming significant amounts through airdrops and ecosystem incentives. Retailers’ poor profit experience during airdrops leads to a pessimistic and lackluster community atmosphere pre-launch.
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With their own shares locked, teams must recoup early costs by dumping tokens from the small circulating supply, forcing them to ignore market sentiment and opt for a high opening price.
The essence of the death spiral is the absence of long-term thinking—the complete collapse of the "Buy and Hold" consensus for altcoins. Once prices break below key support levels, they collapse like spilled mercury. For newly launched tokens, there are no real technical supports; the only de facto psychological support is the market’s valuation and pricing expectations. For a project expected to be valued at $10M, launching at a $1B valuation means funding rates immediately hit -2%, with no miracle occurring before reaching fair value. Poor price performance ensures that even when the price drops to $10M, it won’t stop there. As more such projects emerge, even if reflexivity creates occasional exceptions, shorting VC tokens at launch remains a winning strategy with odds far exceeding 50%. When long-termism vanishes and short-termism dominates—amplified by unregulated interest groups creating chaos—the bubble inevitably bursts, leaving behind emptiness and abandonment.
Compared to other industries, crypto remains in its early stages. Yet,从业者's pessimism feels like Ragnarök—because short-termism breeds neither faith nor value, but instead accelerates the industry’s depletion. Therefore, from now on, we must return to long-termism.
Myshell Encounters Resistance While Returning to Long-Term Pricing Strategy
Returning to the opening point: when VC tokens falter, CEXs suffer the most. Binance took the lead in自救, conducting experiments with Myshell. Regardless of outcome, this signals a shift by the leading exchange. The experiment maintained positive momentum until February 27, but sharply reversed after Binance’s listing. Below is a review of key timeline points and corresponding market sentiment from the February 12 airdrop snapshot to post-Binance listing on February 27.
Two Reversals in Market Sentiment
Myshell’s market sentiment went through three phases before Binance listing: airdrop, IDO, and listing. Retail sentiment shifted dramatically across these stages. Initially, after the airdrop snapshot and distribution, users felt the allocation was too low and the number of airdropped tokens insufficient. Although 30% of the total supply was allocated to community incentives, the total number of airdrop addresses and specific allocation ratios to users or ecosystem projects were not clearly disclosed—leaving room for manipulation. At this stage, market sentiment toward Myshell was negative.
However, during the IDO phase, Myshell managed to reverse sentiment. Pricing misalignment is what we consider the core conflict between retail investors and project teams. Myshell allocated 4% of its total supply to the IDO, offering benefits specifically to Binance Wallet users. With a correspondingly low FDV of just $20 million, the IDO unsurprisingly achieved over 100x oversubscription. FUD among retail investors weakened, but due to the current cycle’s shifting consensus around project airdrops—marked by distrust—many remained bearish. Consequently, the majority of airdrop recipients chose to sell at TGE, as shown by an increase in on-chain holder addresses, with over 50% of airdrop addresses selling immediately.
On TGE day, according to DexScreener data for the $SHELL pool on BSC, within the first hour after launch on the 13th, the price peaked at $1.64 with $3.2M in volume and a circulating market cap of $420M. In the second hour, the high dropped to $0.90, volume surged to $17M, and market cap fell to $240M. The closing price on the 13th was $0.37, with a market cap of $100M.
From the 13th to the 27th, the price stabilized between $0.36 and $0.60, corresponding to a market cap of $100M–$160M. During this period, $SHELL found support at lower levels and showed signs of consolidation with rising price on declining volume. Tokens sold by airdrop recipients were absorbed by top holder addresses, further increasing concentration of holdings.
Overly High and Concentrated Expectations Attract Insider Pools
Before the Binance listing, Myshell received relatively positive reviews, and market perception of the project was favorable. Additionally, the low on-chain launch price followed by Binance futures going live created a chain reaction that likely flushed out many weak hands, allowing market makers to accumulate a large amount of airdropped tokens. The combination of a low pre-listing price and concentrated holdings created ideal conditions for a pump. But layering on narratives such as “Myshell is BSC’s new AI leader,” “backed by Binance,” and “secondary listing” turned the low on-chain launch into a critical vulnerability. Post-TGE, a flood of insider pools rushed in, becoming the most determined holders ahead of the listing—setting the stage for a one-sided sell-off afterward. The coordinated dumping by insider pools and market makers completely erased the goodwill Myshell had built through its IDO concessions.
This is the pain that Myshell—and future VC-backed projects attempting value recovery and long-term alignment—will face when trying to let roadmaps and products justify valuations. Insider pools, nourished by short-termism since crypto’s inception, have grown brazen. When a project carries strong expectations, whether it launches high or low, trading revolves entirely around those expectations—once realized, the price collapses.
Aligning Roadmap with Realistic Expectation Management Is Now Myshell’s Priority
Launching at a low price to benefit users and kickstart the community is a sound direction, but requires careful balance between market expectations and actual roadmap execution. Relying on hype to attract users is acceptable, provided that once the hype fades, solid product fundamentals can provide a floor. Token price management should operate within a range bounded by the maximum justified by market expectations and the minimum supported by actual product value.
Projects returning to long-termism cannot rely solely on IDO discounts to earn trust—that’s just the first step. They must also address the transparency conflict between project teams and VCs. Once a project launches its token via IDO without depending on CEX listings, this tension can be resolved. Greater transparency in on-chain token unlocking processes effectively mitigates past conflicts of interest. On the other hand, traditional CEXs face declining trading volumes due to frequent post-launch price crashes. On-chain transparency allows both exchanges and market participants to more accurately assess a project’s true health.
Projects opting for a low on-chain launch must prepare for a prolonged period without CEX listings—otherwise, they risk falling into the same trap as Myshell with insider pools. Only by earning user and market trust on-chain can a token price enter a virtuous upward spiral.
Kaito’s Middle Path Aligns with the Industry’s Transitional Phase
Kaito’s airdrop distribution follows the unwritten rules of VC tokens: reducing allocations to top-tier users while increasing the number of eligible recipients—i.e., long-tail distribution. Based on individual weight algorithms, 1 Yap can be redeemed for 5–20 $KAITO, with Ecosystem Yappers, Partners, and Yappers collectively receiving 96 million $KAITO—though exact breakdowns remain undisclosed. This strategy enables the team to discreetly retain and recycle tokens during the airdrop, while the large number of airdrop addresses significantly reduces immediate sell pressure compared to concentrating distributions among top KOLs. By pricing at a neutral $1B level, Kaito facilitated a smooth transfer of floating supply between bulls and bears.
Fractionalization Becomes the Flywheel Foundation
Second, Kaito designed a positive feedback loop early on around NFTs, Yaps, and sKAITO, leveraging a split-token model to exert necessary control over token price when needed. Prior to the airdrop snapshot, Kaito NFT prices steadily rose, peaking at a floor price of 11 ETH (~$30,000). After the snapshot, prices dropped, reaching $5,800 at TGE, and have since gradually recovered to a floor of 2.5 ETH. Each NFT received 2,620 $KAITO (~$4,700 at $1.8 on Feb 21), and all 1,500 Kaito NFTs together received nearly 4 million $KAITO.
sKAITO voting weight is positively correlated with staked amount, staking duration, and 7-day voting activity, and negatively correlated with weights from Yappers’ voting pool and NFT holder voters.
Source: Kaito
Voting power consists of Yappers (50%) + Holders [sKAITO, NFT] (50%).
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1 Genesis NFT ≈ 45,980
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1 sKAITO ≈ 11.79
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Each NFT’s voting power = 3,900 $KAITO
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NFT and sKAITO voting power dynamically shifts based on the relative total market cap of NFTs vs. sKAITO, gradually favoring the side with higher market cap
Simple calculations show holding NFTs is cheaper than using sKAITO for governance participation.
By staking Kaito tokens, users gain voting rights in governance and project decisions. Currently, each Kaito NFT provides 45,980 voting power, equivalent to holding 3,935 $KAITO.
The arbitrage space among NFTs, Yaps, and sKAITO allows Kaito’s price performance to be partially regulated through NFT market cap.
Choosing a Growth Model Suited to One’s Own Lane Is More Crucial
In terms of pricing strategy, Kaito’s approach is neither exceptional nor flawed—which is understandable. Returning to long-termism, where product strength justifies market cap, is a far more difficult journey than ever before. Kaito’s chosen path is sustained, long-term value delivery, enabling its market cap to steadily converge with actual product strength.
After the temporary decline of memecoins, Kaito shows tendencies to inherit the role of market attention distributor, competing for mindshare within specific timeframes. Mindshare is propagated by KOLs, who essentially work for Kaito, compensated via yaps. As mindshare grows in importance, more projects will join Kaito and pay fees. The continuous expansion of KOLs, users, and projects forms the foundation of Kaito’s positive flywheel. Whether this flywheel succeeds depends on how deeply mindshare penetrates the market.
Measuring the market acceptance of mindshare is inherently difficult. Thus, Kaito introduced the Yapper Launchpad—a tool serving both end-users (ToC) and acting as a business metric (ToB). Overall, the higher the NFT market cap and sKAITO staking rate, the greater Kaito’s market share. Correspondingly, yaps rise in value, attracting more KOLs to participate.
Conclusion
Whether a project chooses to pioneer change like Myshell, adopts a community-plus-VC dual-driven token issuance model, or, like Kaito, clearly defines its lane and achieves value recovery through sustained long-term value creation—each represents a sign of industry innovation moving toward long-termism.
Returning to long-termism is like going from luxury to frugality—it’s hard in an unregulated industry, and even harder because meaningful innovation in crypto seems limited to DeFi. Other sectors like NFTs, GameFi, and Metaverse have delivered terrible long-term experiences. Thus, with the specter of past failed long-termism as the “wolf” ahead and mass-produced short-term schemes as the “tiger” behind, returning to long-termism goes against human nature—but may be the only viable path forward. If you distrust every narrative and harbor skepticism toward every technology, this industry may no longer offer room for your growth.
We must wait—patiently—for crypto’s moment of qualitative transformation. It may be triggered by AI agents, or another emerging sector. But until then, we must hold fast to long-termism, endure the pain of healing old wounds, and confront the discomfort that comes with rebuilding on sustainable foundations.
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