Rewarding Content Creators in Web3: The Prospects of Kaito

Last week saw the high-profile launch of KAITO — a token designed to reward content creators on the Kaito platform. The token’s price surprised many when it didn’t drop after the airdrop, despite active sell-offs by major holders, including popular crypto influencers.

KAITO/USD price chart after the airdrop. Source: Coingecko

The cryptocurrency community saw potential in KAITO and didn’t follow the “bears.” Meanwhile, Kaito isn’t the only project allowing content creators to receive cryptocurrency rewards for their publications. Let’s remember whether Kaito’s predecessors were successful, and check if Kaito has learned from their mistakes while preserving the best of what they offered.

The Problem of Creator Rewards in Social Media

Since the rise of Web 2.0, many people actively began creating content on social media platforms. The most interesting creators quickly became popular. However, they often couldn’t convert their popularity into money. When popular communities and bloggers started selling advertising (such as posts with product links, photos with sponsored products, video reviews, etc.), platforms began prohibiting this.

• YouTube deleted such videos and banned creators because revenue bypassed the platform.
• Facebook suppressed posts with external links to third-party stores or removed them entirely.
• Instagram introduced algorithms that reduced the reach of promotional content.
• Twitch banned streamers who accepted donations via PayPal or other third-party services without paying platform fees.

Eventually, platforms introduced “promoted content” services, ensuring advertisers paid the platform, not creators. Direct ads in posts remained discouraged, as they bypassed platform monetization. Meanwhile, the fact that ad revenue flowed to platform owners instead of creators was normalized. Creators produced content, while platform owners profited — a practice once considered standard.

The first to challenge this model was YouTube, which launched a partner program allowing creators to earn ad revenue from their videos. This marked the first large-scale platform to automate creator monetization. YouTube made content monetization mainstream, inspiring adaptations by Patreon, Spotify, Facebook, Instagram, TikTok, and others.

By the time Web3 emerged, compensating creators was no longer a novel issue — many social platforms had already solved it successfully.

How Cryptocurrencies and Web3 Changed the Game

Decentralized social media platforms built on Web3 principles and cryptocurrencies didn’t reinvent the wheel. Instead, they adopted the user-funded model already proven by Patreon, Spotify, and Twitch: rewarding creators through direct user payments rather than advertisers.

YouTube (alongside Instagram and others) uses an ad-driven model:

• Creators earn from advertisers, not users.
• Revenue flows through the platform, which controls monetization.
• More views → more ads → more revenue.

This model has clear flaws:

• YouTube/Instagram algorithms prioritize content favorable to advertisers, not creators or audiences.
• Creators depend entirely on platforms — if YouTube demonetizes a channel, income vanishes.

On Patreon, Spotify, and Twitch, users pay creators directly, bypassing advertisers. The catch? Revenue still passes through the platform, which deducts fees and retains power to penalize creators, block payments, or even abscond with funds.

Web3 and cryptocurrencies disrupted this dynamic. Many alternative platforms emerged.

• Steemit / Hive / Mirror.xyz: Users tip creators using native platform tokens.
• Lens Protocol / Farcaster / NOSTR / Tourniquet: Direct crypto donations to creators, no platform tokens required.
• Audius: Musicians earn crypto for streams (similar to Spotify).
• Theta / Livepeer: Streamers earn tokens for broadcasting (akin to Twitch).
• Stacker.News: Microtransactions for posts (like Patreon).
• DRiP: Artists share their work; viewers can tip or purchase it as NFTs.

A simple dog photo received 24.1 thousand satoshis (about $24) within the first 11 minutes after being posted on the NOSTR platform.

Thus, cryptocurrencies haven’t drastically altered reward mechanics. The key shift is eliminating intermediaries that could delay payments — though some platforms still opt for custodial models (e.g. DRiP where tips and purchases use an internal currency, which is converted daily to USDC and sent to artists’ external wallets).

What’s Wrong with Creator Rewards on Web3 Platforms

When YouTube pays creators in fiat, rewards are predictable and liquid. On Web3 platforms, creators earn cryptocurrencies, raising liquidity concerns.

Rewards in established cryptocurrencies (e.g., Bitcoin) fare best. Platforms like NOSTR, Stacker.News, and Tourniquet use Bitcoin, ensuring liquidity.

The post that received the largest reward on Stacker.News: 3 million satoshis (approximately $3,000).

The worst-case scenario involves platforms using their own tokens for rewards. In this case, an immediate question arises: where will demand for these tokens come from?

A token will only be in demand if it has clear utility. Otherwise, no one wants to buy it, and the price falls.

There are platforms where the token is actually needed for system operation. This maintains demand.

Examples:

• Audius ($AUDIO) — musicians and listeners use the token for premium features.
• Theta ($THETA) — streamers use the token to buy priority resources in the network.
• Livepeer ($LPT) — video streaming operators stake tokens to participate.

How does it work?

• The more people use the platform, the higher the token demand.
• Sustainable demand = liquidity and price growth.

But if demand is only speculative, what happens when the price rises? No speculator will buy high. Speculators buy at low prices and sell at high ones. This means that after the initial hype, demand will inevitably fall. Everyone will sell: both speculators and those receiving rewards in tokens.

Some platforms managed to promote their tokens so successfully that they reached high capitalization and trading volumes. This allowed authors to easily exchange rewards for real money.

• Steem ($STEEM) reached a capitalization of $1.6 billion in 2018, traded on major exchanges at that time.
• Hive ($HIVE) is still quite liquid, though its price has dropped almost 90% from the historical maximum reached in 2022.
• Audius ($AUDIO) trades on many popular platforms, including pairs with fiat currencies.
• Theta ($THETA) is in the top 100 by capitalization, though its price has dropped 90% from ATH.
• Livepeer ($LPT) is listed on major exchanges, and used for video streaming.

What does this mean for creators?

• If the token is liquid, creators can quickly cash out their earnings.
• High liquidity attracts users seeking tangible rewards.

Some platforms issue their tokens, but they have low trading volumes.

• Deso ($DESO) — decentralized social networks token.
• Degen ($DEGEN) — third-party token created for the Farcaster platform.

What does this mean for creators?

• If liquidity is low, creators either risk holding tokens waiting for growth or search for someone willing to buy tokens at a discount.
• Such projects often lose users when people realize earnings are difficult to convert into real money.

Self-plug moment:

Even less popular tokens can find liquidity on Rabbit Swap. All the above-mentioned tokens can be easily exchanged for any other cryptocurrency with us.

What About Kaito? Does It Have a Chance?

Kaito, as we see, chose the option with its own token. The experience of other similar projects shows this is the most dangerous path.

If the token loses value, users leave. The history of Web3 social media knows many examples of collapse due to reward devaluation.

Bright examples of degradation:

• Steemit ($STEEM). At the start, authors earned $100+ per post, but the token depreciated due to constant emission. The platform is dying.
• Friend.Tech ($FRIEND). Loud launch, huge price growth. On the joys of the people massively sell tokens. The result - the price collapsed, the users left.
• dTube ($DTUBE). Decentralized YouTube looked like a good idea. But as soon as the token depreciated, authors stopped uploading videos.

How can Kaito avoid collapse? Since they decided to bet on their own token, it’s vital for them to achieve,

• that the token was needed not only by authors but also by content consumers;
• that reward wasn't just handouts but had economic justification (value for value);
• that the platform was developing and attracting new users.

Kaito’s advantages:

• Kaito claims to strive to distribute the value created in the ecosystem not only between the content creators, but also between the users, and even the brands. This may create a new model of information monetization.
• AI content filtering makes the platform useful for consumers (it excludes spam, advertising injections, and low-quality materials) and, possibly, convenient for authors (create quality content - and the AI will notice you, because it has the resources of attention much more than living people).
• Focus on useful analytics for traders and investors – this type of information really may be demand.

Kaito’s risks:

• If the token is in demand outside the platform, it will depreciate. At the same time, it is unclear now who will buy the tokens and why.
• Content promotion with AI may lead to the fact that the award of authors will not be so fair as promised by Kaito. All recommendation systems in social networks to a greater or lesser extent use AI elements. And we see that a qualitative content of unknown authors is not so easy to find the path to the consumer.
• The InfoFi concept - a new model of monetization - seems overly complex and incomprehensible. At the same time, it is hard to imagine what will happen to the platform if this concept fails to implement.

We’ve already started exchanging KAITO token on rabbit.io. With us, you can exchange it for any other cryptocurrency without registration and at the best rates. We hope this token stays with us for a long time and has a great future ahead. But its path is fraught with challenges that felled many predecessors.

P.S. List of Web3 Platforms with Cryptocurrency Rewards for Content Creators

1. Decentralized Social Networks (Token-Based Monetization)

Web3 alternatives to Twitter, Facebook, and Reddit.

• Steemit ($STEEM) / Hive ($HIVE): Blogging platforms where “likes” earn tokens.
• Lens Protocol (Polygon): Sell content as NFTs or earn tokens for engagement.
• Farcaster ($DEGEN): Decentralized Twitter alternative.
• Deso ($DESO): Blockchain for building token/NFT-monetized social apps.
• Torum ($XTM): Crypto-focused social network rewarding activity with tokens.

2. Micropayment Platforms (Bitcoin/Lightning)

Direct tips to creators.

• Stacker.News ($BTC): Pay satoshis for posts; top content rises.
• NOSTR ($BTC): Donations for posts.
• Fountain.fm ($BTC): Podcasters can receive Bitcoin rewards from their listeners.
• Tourniquet ($BTC): Direct BTC donations to streamers/creators.

3. Video & Streaming (Web3 Tokens)

Decentralized YouTube/Twitch rivals.

• dTube ($DTUBE): Earn tokens for video likes.
• Theta Network ($THETA): Tokens for video sharing.
• Livepeer ($LPT): Earn tokens by providing streaming resources.

4. Art, Music & Podcasts (Crypto)

• DRiP ($USDC): Donations to artists, selling digital art as NFTs.
• Audius ($AUDIO): Decentralized Spotify; artists earn tokens per stream.
• Fountain.fm ($BTC): Podcasters earn BTC based on the time listeners spend on their podcasts.

5. Article & Research Monetization (NFTs/Tokens)

Web3 Patreon/Substack clones.

• Mirror.xyz (Ethereum, NFT): Sell articles as NFTs or crowdfund via Web3.
• Kaito.ai ($KAITO): AI-driven data monetization (“InfoFi” model).

6. Specialized Web3 Models (Crypto)

• Mask Network (Ethereum): Send crypto donations via Twitter/X.
• BitTorrent ($BTT): Charge for content uploads in BitTorrent networks.

If you know other platforms, share them in the comments!