When KOL advocates for 'KOL rotation' rights, there are no winners in the Bear Market.

Authored by: Deep Tide TechFlow

The president draws a door, celebrities issue coins, long and short positions explode, AI remains silent… In the crypto market from the beginning of the year until now, just pick any one of them at random, and it’s enough to make a large number of investors drink a pot.

As a seasoned leek, it’s also difficult not to drink these few pots — weaknesses such as not getting enough information, hearing the wind as rain, lack of trading discipline, etc., are easily magnified during Scam Season and bear markets, making losing money a high probability event.

But those injured are not just leeks.

When the market goes down, most people may not be winners no matter how hard they try, including KOLs.

KOL, who has always been seen as standing on the same harvesting front as the project party, has also begun to lose money and complain during this round of bull and bear alternation; what makes them become “big leeks” comes from something that you once had no chance to touch, but now has become a hot potato: KOL round.

KOL wheel, from win-win tool to multi-loss trap

Bear market is more about tearing and rights protection, but I didn’t expect KOLs to start protecting their own rights too.

ChainDoctor sighed on March 4, 2025: “Don’t envy KOL rounds. Over ten KOL rounds were invested last year, all losing money. Most of them didn’t even issue tokens and went directly bankrupt.”

Perhaps the loss tolerance of KOL is higher than that of retail investors, but this does not change the fact that they are also losing money.

You can certainly see it as a performance and a show of self-pity, but many more KOLs venting their grievances indirectly prove that they are truly deceived as well.

After this post was published, various KOL leaders in the encrypted Chinese community started a collective criticism and ridicule of the KOL circle in the past few days. For example, well-known KOL yuyue directly criticized:

“Some KOL rounds are disguised by the project party as paid promotions, selling the takeover rounds and high-priced fundraising coins to KOLs, using the resources of people around them to profit from harming those around them…”

You may still doubt the logic of KOLs losing money, but in the entire token listing chain, KOLs are actually also in the downstream of the ecosystem.

The entire chain typically includes:

Seed round (early investors such as friends and family participate), private placement round (targeting venture capitalists and strategic partners), KOL round (selling to KOL at a discounted price in exchange for promotion), public offering round (retail investors), and exchange listing (token listed for trading).

KOL rounds usually appear after private placement rounds, with the project party selling tokens to KOL at a low price or discount price, and KOL using its influence on X, Telegram to promote the project and increase project influence.

In a bull market, the KOL round may be a win-win tool. The project party raises funds through the KOL round, and KOL makes money by the token’s cost price and secondary price difference. Retail investors may also get a share when the market is good.

But in a bear market, the situation is not so optimistic.

Liquidity dries up, secondary market trading volume shrinks, token prices plummet, project parties often cash out and run early, while KOLs are locked in tokens - usually a lock-up period of 3 to 6 months that prevents KOLs from selling in time, causing the token value to drop to zero.

In the above post, you can also see sharp comments:

“The current KOL round is a typical case of losing both the money and the soldiers. When the project party cannot raise money from the second level, they target KOLs who make money from advertising. KOLs are equivalent to contributing money, effort, and people.”

This is no longer a passive stage of poor market conditions where everyone understands each other, but rather some projects have even taken the initiative to have evil intentions, seeing KOLs as part of the liquidity exit.

Even worse, KOLs also face the dilemma of being bullied by both ends: the project party knows the risks of this model, but still uses the greed or survival pressure of KOLs (traffic realization demand) to promote cooperation. KOLs hope to ‘take a gamble’, but the result often goes against their wishes.

On the other hand, retail investors’ blind trust in KOLs has decreased, and even a ‘reverse indicator’ phenomenon has emerged (projects recommended by KOLs are considered to be on the decline). The promotional effect of KOLs has declined, making it difficult for token prices to rise, further exacerbating damage to their reputation.

If you don’t consider cutting a wave and leaving, who doesn’t want to take care of their feathers and make money together?

From win-win tools to multi-loss traps, in the bear market, most of the people standing downstream of the value chain may no longer be winners.

Agency, the professional quality of brokers

You may not know that behind the KOL circle of the crypto market, there is another little-known role: Agency (agency).

Simply put, their responsibility is to undertake the promotional needs of the project party and help find suitable KOLs in the market for promotion.

However, the responsibilities of the agency go far beyond simply making connections. They need to balance the interests of the project party - hoping to attract the maximum traffic at the lowest cost, and the demands of KOL - hoping to obtain stable income, break even, or even make a profit through promotion.

For example, Dov, the representative of Agency, posted, saying:

I have never let my KOL lose a penny. Either pay U for direct promotion, settle directly, or have a guaranteed bottom line for KOL rounds. The worst case is to refund the principal.

From here, you can see that the motivation and business capabilities of practitioners in any crypto ecosystem are actually uneven.

Excellent agencies will try their best to consider the guarantee mechanism to ensure that KOLs do not lose money, such as direct cash payment or KOL revolving capital refund. However, if the agency lacks professional judgment and selects inferior projects, KOLs may face the risk of token depreciation, lock-up, and ultimately losses.

The fate of the person doing the work often depends on the professionalism of the person assigning the work.

On the chain of crypto marketing, perhaps only scammers hope to do “one-off deals”. Continuously deceiving people will result in less and less business, and the path will become narrower and narrower.

After all, everyone is not a fool, and long-term win-win is the way to make a fortune.

But each person may be a good intermediary in the downstream link, but it seems inevitable to become a victim in the upstream link.

There are no winners, but there is no end.

The cruelty of a bear market lies in the fact that it not only makes ordinary investors (leeks) feel the chill of the market, but also forces KOLs who once stood higher on the profit chain to bow their heads and face reality.

In this cycle of bull and bear alternation, project parties, KOLs, retail investors, and even agencies are playing different roles, but there are no winners in the end.

KOL’s ‘rights protection’ is actually a microcosm of the entire crypto ecosystem.

From the ‘win-win tools’ in the bull market to the ‘multi-loss trap’ in the bear market, the transformation of KOLs has exposed a deep-seated trust crisis in the cryptocurrency market. The short-sighted behavior of the project party, the profit-seeking mentality of KOLs, the blind follow-up of retail investors, and even the insufficient professional capabilities of agencies are all magnified in this game.

When the market is down, everyone is trying to protect themselves, but it is difficult to escape the fate of being harvested.

KOLs’ ‘being cut’ is not just a simple dispute over interests, but a reflection of the imbalance in the crypto market ecosystem in a bear market environment. When liquidity dries up and the capital chain breaks, all roles standing downstream in the value chain will become passive victims.

Looking back, the controversy surrounding the KOL round is essentially a growing pain in the industry.

When KOLs fight for their rights, they are also speaking out for the entire ecosystem in a disguised manner. Perhaps only after experiencing such a bear market, can everyone truly understand that in a market without rules and trust, short-term winners will ultimately become long-term losers.

However, from a longer-term perspective, this may also be an opportunity for a reshuffle. The bottom of the market is often the starting point for ecological optimization. Only through reflection and adjustment in pain can we usher in the next round of prosperity.

Will the next bull market come as scheduled? Perhaps it depends on whether each participant today can truly learn from the lessons of this bear market and find a new ‘win-win’ balance.