Hyperliquid News Today: XNL's 75% Plunge Exposes RWA's Hype vs. Reality Gap

The Novastro (XNL) token has plummeted 75% from its initial coin offering (ICO) price, sparking widespread skepticism about the fundraising platform Kaito AI and the viability of real-world asset (RWA) tokenization projects. As of October 31, XNL traded at $0.0126, a stark decline from its public sale price of $0.05 following the project's Token Generation Event (TGE), according to Lookonchain. Participants in the public sale, which raised $2 million and was 2.3 times oversubscribed, now face losses exceeding 70%, another Lookonchain post reported. The sharp drop has intensified scrutiny over Kaito AI's role in vetting projects and its responsibility for facilitating what users call "rug pull" scenarios, a Lookonchain post noted.

Novastro, an RWAfi project, aims to create a modular ledger layer for tokenizing real-world assets, enabling cross-chain interoperability on Ethereum, Arbitrum, Sui, and Solana. The XNL token is central to its ecosystem, powering governance, staking, and liquidity provision. Despite ambitious plans, the token's performance has raised questions about the alignment between project fundamentals and market sentiment, according to CoinGecko. Critics argue that the lack of post-TGE price stability undermines confidence in both the project and platforms like Kaito AI, which have become gateways for speculative fundraising, Lookonchain reported.

The XNL crash mirrors broader market trends. Recent Initial DEX Offerings (IDOs) have also seen tokens trade below issuance prices, reflecting a cooling in investor appetite for RWA projects. On October 29, XNL was already down 72% from $0.05 to $0.014, a Lookonchain update showed. This trend highlights risks in the RWA space, where projects often rely on hype rather than proven use cases. Analysts caution that without robust demand for tokenized assets, such projects may struggle to justify their valuations, CoinGecko data indicate.

Kaito AI, which facilitated Novastro's public sale, faces growing calls for accountability. Community members argue that platforms should enforce stricter due diligence to prevent funding for projects with weak fundamentals or opaque roadmaps, Lookonchain noted. The incident underscores a larger debate about the role of fundraising platforms in a maturing crypto market, where retail investors are increasingly wary of unproven ventures, Lookonchain also observed.

Novastro's whitepaper emphasizes its vision of a decentralized ledger for RWAs, but the token's collapse suggests a disconnect between technical innovation and market realities. While the project's multi-chain architecture and digital twin integration are theoretically compelling, tangible adoption remains elusive. For now, XNL's trajectory serves as a cautionary tale for RWA projects and the platforms that back them.