5000U becomes 400U, the project party's "sickle" first cuts towards the KOL wheel

Author: Fairy, ChainCatcher

Edited by: TB, ChainCatcher

The once-prosperous KOL round of financing has now become the "nightmare" of many KOLs:

"I invested more than a dozen KOL rounds last year, and all of them lost money. Most of them didn't even issue coins, and they were gone."

"Let me tell you this, basically all KOL rounds are not making much money."

"I invested more than a dozen last year and finally sent two. The 5,000U was sent to 400U."

I thought it was a shortcut to participate in high-quality projects at low cost and achieve wealth appreciation, but it turned out to be a full loss. Someone had no choice but to joke: "I lost my face and lost my money."

The KOL round seems to be about to become a derogatory term, from the wealth code to the "capital hunting ground".

Win-win "personality" and the result of imbalance

The KOL round of financing was initially set as a mutually beneficial and win-win early financing model, aiming to build a win-win ecosystem for project parties and KOLs.

The project party uses the influence of KOL to quickly increase its visibility, attract initial traffic, and establish active communities to promote the long-term development of the project. KOL participates in early-stage investments at a lower cost. If the project is successful, it will not only obtain returns, but also enhance the industry's influence and achieve both fame and fortune.

However, the real market is not so ideal. The ideal "win-win" gradually became a one-sided harvesting game.

High valuation, long locking of positions and low returns have gradually become the three standard features of the KOL round. Many project parties ' goal is no longer long-term construction, but short-term cash out.

There was a mess, and the KOLs gradually got lost in this game and were even harvested in the reverse direction.

Why did this KOL round suffer a loss across the board? Listen to what

KOLs say:

• Lack of lasting narrative support

@realChainDoctor said: "There is no particularly lasting narrative (hot spot) in this round."

For projects without long-term hot spots, the KOL round is essentially just a "paid publicity and promotion round". Once the market heat decreases, it is difficult for the project to maintain its valuation and the return on investment shrinks significantly.

• High valuation + long locking of positions has become a "fixed pit"

@blockphd7 said: "Kol wheels are basically fixed-point pits, with high valuation + long locked positions."

The valuation of KOL round of financing is generally inflated, and the position locking time is long and liquidity is limited. Project parties often promise to "bring friends into the car", but in fact they are precise harvesting. Some project parties even use the linear release mechanism to gradually smash the market, resulting in KOL round investors being forced to "go in and out" or even leave the market at a loss.

• The primary market space is severely compressed

@0xcryptowizard said: "The pre-coin speculation project now gives the first-level and kol space directly to 2-3 times the expected, and it also locks in one year to add cliff."

This design greatly compresses investors' profit margins, resulting in a lower return rate than the bull market.

• The market environment deteriorates, and the project party 's money-making behavior increases

@yuyue_chris said: "The market environment is poor. At the high point in November and February, a large number of project parties tried their best to make money, especially to find people around them. While shipped through OTC, retail investors became exit liquidity and also had scams. They used investment to make money rugs..."

Many project parties lack long-term planning and sell at the opening, and pursue the strategy of "engaging more projects and making small cuts to be safe." This short-term thinking makes the KOL round investment return extremely unstable, and it is difficult to even recover the principal. In addition, after the market environment has deteriorated, the project party will do anything to make money.

• KOL capabilities are limited, information asymmetry

@yuyue_chris said: "Although KOLs need to identify the quality of the project by themselves, most KOLs are only large retail investors and do not have the ability to fully distinguish the authenticity of the information, so they were deceived and killed based on fake news and false information."

Can I still play the KOL wheel?

According to @YeriZhang, KOL rounds can be roughly divided into three categories:

• Black slave wheel: generally earn up to 2 times the principal or refund the principal
• Investment round: Risk and return coexist, accompanied by big losses and big profits
• OTC shouts one-wheel: TGE discounted coins after buying

The terms of the black slave wheel are harsh and suitable for small investors who want to accumulate connections and gain quotas. The returns are limited, but the requirements for vision are low. The core strategy is to establish relationships with the project party and strive for more quotas.

The investment round requires a mentality of "no regrets to make a move" and a deep understanding of the underlying logic of the project, team background and market prospects. KOLs need to have pricing capabilities to avoid falling into traps due to high valuations. This is also the most likely category to "get up".

The key to OTC’s single-round call is the hedging strategy, and KOLs need to have a deep understanding of liquidity.

These three categories have their own unique risk and return models. Overall, the KOL round of the first-level project tests investors' eyesight, while the KOL OTC round of the second-level project tests the understanding of liquidity. However, the most important thing is KOL's ability when negotiating prices. If the pricing is not well negotiated, everything is empty talk.

Nowadays, the threshold for KOL's ecological ecology is getting lower and lower, fans can brush it and barriers can be broken. The more you are, the easier it is to be targeted. At present, many KOLs choose to stay away from KOL round financing, and some retail investors have also made it clear that they "will never take KOL round projects."

Of course, the KOL round of financing is not entirely without high-quality projects. The future KOL round may not disappear completely, but it must return to rationality. When speculators leave, only those who truly have the ability to capture value can survive in this game.