The Kaito Launchpad Meltdown: Why Post-TGE Crashes Signal a Systemic Risk in Crypto Crowdfunding

The collapse of Kaito's ecosystem in 2025 has exposed a critical flaw in the crypto crowdfunding model: the disconnect between speculative valuations and the structural realities of tokenomics. Projects launched via Kaito's platform, such as Play AI, Hana Network, and Novastro, have collectively demonstrated how poorly designed token economics and unrealistic fully diluted valuations (FDVs) can trigger cascading failures. These cases underscore a broader systemic risk in early-stage crypto crowdfunding, where market fundamentals are increasingly overshadowed by hype-driven fundraising.

The FDV Mirage: Overvaluation and Immediate Sell Pressure

The Kaito Launchpad's 2025 cohort exemplifies the dangers of inflated FDVs. Play AI, for instance, was initially valued at $50 million post-TGE but plummeted to $2.1 million within months, a 95.8% decline. Similarly, Hana Network's token (HANA) dropped 89% from its 2025 peak, trading near $0.01037 despite a $50 million FDV. Novastro, labeled the "Biggest Scam of 2025" by Param_eth, raised $2 million with a $50 million FDV, only to collapse entirely. These collapses highlight a recurring pattern: projects are valued based on speculative narratives rather than verifiable utility or demand.

The root cause lies in tokenomics design. Hana Network unlocked 100% of its 1 billion tokens at TGE, enabling immediate dumping by presale participants. Play AI followed a 50% unlock at TGE and 50% vesting over five months, yet its FDV still collapsed due to weak adoption and liquidity issues according to Phemex reports. Kaito's own token ($KAITO) saw an 83% drawdown in 2025, exacerbated by an August token unlock that released 10% of its circulating supply. These examples reveal a systemic failure to align token distribution with long-term value creation.

Tokenomics Flaws: Misaligned Incentives and Utility Gaps

The collapse of these projects is not merely a function of poor execution but a symptom of flawed economic models. For instance, Hana Network's roadmap-focused on cross-chain swaps and privacy features-lacks immediate utility, leaving the token's value proposition unproven. Similarly, Play AI's token (PLAI) has no governance or revenue-sharing mechanisms, relying instead on speculative demand. This absence of real-world use cases mirrors the failures of Terra's UST and Axie Infinity's SLP, where token issuance outpaced consumption, leading to price collapses.

Kaito's ecosystem further illustrates the risks of misaligned incentives. Early investors in Novastro and Play AI were incentivized to sell immediately post-TGE, creating downward pressure on prices. Meanwhile, projects like Sui and Pump.fun, which also suffered FDV collapses, highlight how high-FDV tokens with low circulating supply become structurally uninvestable due to liquidity constraints. These flaws create a dependency on continuous inflows of new capital, a model that falters when market conditions shift.

Systemic Risks and Investor Implications

The Kaito Launchpad's struggles reflect a broader crisis in crypto crowdfunding. High-FDV tokens are increasingly seen as "structurally uninvestable" due to their inability to sustain price stability. This trend is compounded by macroeconomic factors, such as rising Bitcoin dominance and extreme market fear indices, which amplify volatility in smaller-cap tokens. For investors, the lesson is clear: projects with aggressive token unlocks, no vesting schedules, and unproven utility are inherently risky.

To mitigate these risks, investors must prioritize projects with:
1. Gradual Token Distribution: Vesting schedules that align early stakeholders with long-term success.
2. Utility-Driven Tokenomics: Tokens with clear, defensible use cases (e.g., governance, staking, or revenue-sharing).
3. Liquidity Safeguards: Mechanisms like buybacks or token burns to counteract sell pressure.

The 2025 collapses of Play AI, Hana Network, and Novastro serve as cautionary tales. As the crypto market matures, valuation realism and tokenomics rigor will become non-negotiable criteria for sustainable growth. Investors who ignore these lessons risk repeating the mistakes of Kaito's meltdown in 2026.