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Kaito: AI-Powered Web3 Search Engine

Intermediate
web3
Dec 31, 2024
5 min read

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Detailed Summary

Within a year of its launch, Kaito has already established itself as a key player in the web3 industry. Its innovative approach combines artificial intelligence with publicly available crypto conversation data, creating a tool that can present an up-to-date picture of the events affecting the cryptocurrency space at any given time.

Key Takeaways:

  • Kaito uses custom LLMs to provide real-time, noise-free insights from numerous web3 sources.

  • Founded by Yu Hu, Kaito has raised $10.8 million, backed by major VC firms and reflecting strong investor confidence.

  • Kaito engages its community through Yap points and a limited Genesis NFT collection, enhancing user interaction and ecosystem growth.

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What Is Kaito?

Kaito is an AI-powered search engine specifically designed for the cryptocurrency space. It’s a premium service with a monthly subscription of $1,099. The platform indexes thousands of web3 sources that aren’t accessible through traditional search engines, and gathers data from Twitter, Discord, governance forums, research papers, news articles, podcasts and even conference transcripts. 

Kaito uses advanced AI algorithms and natural language processing to better understand context and gauge sentiment about topics. Its use of AI and an internal algorithm allows Kaito to filter out the noise, presenting a more accurate picture of community sentiment. 

Founders and Investors

Kaito was founded in 2022 by Yu Hu. Before moving to web3, Hu worked in the traditional finance space for over eight years, including the management of a $500 million equities portfolio at Citadel. His aim with Kaito is to democratize web3 information by giving users access to tools and insights they need to navigate this ever-changing industry. 

Kaito has quickly attracted significant investment from major VC firms in the industry. The project has already raised $10.8 million across two funding rounds.

Funding Rounds

Amount Raised

Lead Investors

Seed Round

$5.3 million

Dragonfly Capital, Sequoia Capital

Series A

$5.5 million

Superscrypt, Spartan

The seed round in August 2023 was led by Dragonfly Capital, with participation from Sequoia Capital China, Jane Street and others, as Kaito secured $5.3 million. This was followed by a Series A round in June 2023, led by Superscrypt and Spartan, raising an additional $5.5 million with a valuation of $87.5 million. Other notable investors include Mirana Ventures, Folius Ventures and Alpha Lab Capital. 

Key Features of Kaito

Kaito offers a range of features designed to provide users with comprehensive and actionable insights. They include the following:

AI-powered search: Kaito’s platform uses a custom-built large language model (LLM) in combination with real-time data gathered from various sources to provide users with actionable insights on developments in the web3 space. 

Custom-built for web3:As a web3-native company, Kaito can analyze and understand the nuances of crypto terminology and concepts. This gives it an edge when compared to Web 2.0 search engines that struggle to understand this space. 

Sentiment analysis: Kaito tracks market sentiment at various levels, including general market sentiment, sector-specific sentiment and sentiment toward specific tokens and projects, providing investors and traders with an important metric in assessing a project’s value.

How Does Kaito Work?

Kaito uses a custom LLM to enhance its data processing capabilities. The platform aggregates data continuously from various sources, including social media, forums and news websites. This data is then processed using Kaito’s natural language processing capability to identify relevant information, extract key insights and analyze market sentiment. 

In addition, its platform uses a reputation system to give weightage to different posts based on the reputation of each poster. It also employs sophisticated algorithms to filter out spam and bots that often try to shape public opinion on social media platforms, especially on X. 

Yaps and Genesis NFT Collection

In December 2024, Kaito AI introduced two new elements to its ecosystem: Yaps, and a Genesis NFT collection. Yaps is a scoring system that measures user contribution and engagement within the web3 community. Users earn Yap points by creating valuable content, engaging with others in the crypto space and participating in discussions on Crypto Twitter. Kaito uses four main attributes in allotting these points:

  • Crypto relevance

  • Engagements that are real and weighted to reputation

  • Participation in insightful and original discussion

  • Referral of other users to the Yaps program

The system also automatically filters out spam posts, making sure only real posters and useful posts can earn Yap points. While Kaito hasn’t officially confirmed a token airdrop associated with Yaps, the program allows participants to accumulate points that might play a role in future rewards, or initiatives within the Kaito AI ecosystem.

Participation in the Yaps program is completely free. Users just need to log in with their Crypto Twitter accounts and Kaito will start tracking their Yaps scores automatically. 

Genesis NFTis a limited-edition collection of 1,500 NFTs launched by Kaito AI. Priced at 0.1 ETH each, these NFTs have been minted in three phases:

  • Early supporters and active users

  • Qualified “Yappers”

  • Public phase

As of Dec 26, 2024, NFTs in the collection are tradable on OpenSea, with a floor price of approximately 3.69 ETH. 

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Future Outlook for Kaito

Kaito is a new and innovative service in the web3 space. Its use of AI to cut through the noise and fragmentation presents a great opportunity for the entire ecosystem. Kaito’s announcement of its InfoFi road map suggests that it’s likely to roll out new features and/or services in the future. While the high subscription fee may be an obstacle for large-scale adoption, Kaito is still likely to become an important tool in the hands of institutions and crypto whales.

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