Presidential gate paintings, celebrity-issued tokens, long/short liquidation squeezes, AI hype dying down… Any single one of these crypto market events since the beginning of the year is enough to give retail investors a hard time.

As a seasoned retail investor, it’s hard not to take the hit—lack of sufficient information, overreacting to rumors, and undisciplined trading are all weaknesses that get magnified infinitely during Scam Season and bear markets, making losing money a high-probability event.

But it’s not just retail investors who are suffering.

When the market trends downward, most people, no matter how hard they try, may not emerge as winners—including KOLs.

KOLs, who have always been seen as aligned with project teams in harvesting retail investors, are now also losing money and crying out in distress during this bull-bear transition.

And what turned them into “big-leafed leeks” is something you once had no access to but has now become a hot potato:

The KOL round.

The KOL Round: From a Win-Win Tool to a Lose-Lose Trap

Bear markets often bring disputes and rights defense battles, but no one expected that KOLs would also start defending their own rights.

On March 4, 2025, ChainDoctor let out a sigh:

“Don’t envy KOL rounds. Last year, I invested in more than ten KOL rounds, and every single one lost money. Most of them didn’t even issue tokens—they just disappeared.”

Perhaps KOLs have a higher tolerance for losses than retail investors, but that doesn’t change the fact that they are also losing money.

You could see it as an act or an attempt to gain sympathy, but the sheer number of KOLs unable to hold back their complaints indirectly proves that they really got burned.

After this post was made, prominent figures in the Chinese crypto community started a collective critique and roast session about KOL rounds over the next few days. For instance, well-known KOL yuyue bluntly lashed out:

“Some KOL rounds are just project teams using paid promotions as a cover to sell off high-priced tokens to KOLs, tricking those around them and profiting off their own circles…”

You might still question the logic behind KOLs losing money, but in the entire token listing chain, KOLs are actually positioned at the downstream end of the ecosystem.

The typical chain includes:

Seed Round (early investors such as friends and family),

Private Round (targeting venture capitalists and strategic partners),

KOL Round (where project teams sell tokens at a discount to KOLs in exchange for promotion),

Public Round (retail investors participate),

and Exchange Listing (tokens being listed for trading).

The KOL round usually takes place after the private round, where project teams sell tokens to KOLs at a low or discounted price. KOLs then leverage their influence on X and Telegram to promote the project, boosting its visibility.

In a bull market, the KOL round might be a powerful win-win tool. Project teams raise funds through KOL rounds, KOLs profit from the difference between their cost price and the secondary market price, and retail investors might also get a piece of the pie if market conditions are favorable.

But in a bear market, things are far less optimistic.

With liquidity drying up, trading volume in the secondary market shrinking, and token prices plummeting, project teams often cash out early and disappear. Meanwhile, KOLs are stuck with locked tokens—usually under a 3 to 6-month vesting period, preventing them from selling in time, leading to their holdings becoming worthless.

You can see sharp comments in the earlier post reflecting this frustration:

“The current KOL round is a classic case of losing both the wife and the army. The project team can’t raise money, can’t dump on the secondary market, so they target KOLs who take advertising deals. KOLs end up paying money, providing effort, and sacrificing their reputation.”

This is no longer just a passive phase where everyone understands the market downturn—it has escalated to some project teams actively scheming against KOLs, treating them as just another part of their exit liquidity strategy.

Even worse, KOLs are now caught between pressure from both sides:

On one end, project teams know KOLs are aware of the risks in this model but still exploit their greed or financial pressure (the need to monetize traffic) to push for collaboration. KOLs gamble on a lucky break, but reality often betrays their expectations.

On the other end, retail investors’ blind trust in KOLs is fading, even leading to a “reverse indicator” effect (where projects recommended by KOLs are assumed to be doomed). As KOL promotions lose effectiveness, token prices struggle to rise, further damaging their reputations.

If cashing out quickly wasn’t the plan, who wouldn’t want to protect their credibility and help everyone make money together?

From a win-win tool to a lose-lose trap, in a bear market, most of those standing at the downstream end of the value chain may find there are no winners left.

Agency: The Professionalism of Middlemen

You might not know this, but behind the KOL rounds in the crypto market, there is another hidden player: the Agency

Simply put, their role is to handle the promotional needs of project teams and help find suitable KOLs in the market for promotion.

But the responsibilities of an Agency go far beyond just matchmaking. They must balance the interests of both sides:

Project teams want to attract the largest traffic at the lowest cost.

KOLs want stable returns from promotions, at least breaking even or making a profit.

For example, Agency representative Dov once posted:

“I have never let my KOLs lose a single penny. Either they get directly paid in USDT for promotion and settle immediately, or the KOL round has a guaranteed floor—at worst, they get their principal back.”

This statement highlights an important fact: the motivations and competence of crypto industry players vary greatly.

A good Agency will try to offer a safety net to ensure KOLs don’t lose money—such as paying in cash upfront or offering a refund guarantee for their KOL round investments. However, if an Agency lacks professional judgment and selects poor-quality projects, KOLs may face token depreciation, vesting risks, and ultimate losses.

For those doing the work, their fate is often determined by the professionalism of those assigning the work.

In the crypto marketing chain, only scammers would aim for a one-and-done scheme. If an Agency keeps scamming people, their business will only shrink over time, and their path will narrow.

After all, nobody is a fool—sustainable win-win cooperation is the real way to make money.

But in the end, everyone may be a good middleman for the downstream players, yet still fall victim to those upstream.

No Winners, But No Final Chapter Either

The cruelty of a bear market is that it doesn’t just chill ordinary investors (retail traders), but also forces KOLs—who once stood higher up the profit chain—to lower their heads and face reality.

In this cycle of bull-to-bear transition, project teams, KOLs, retail investors, and even Agencies have all played different roles, yet in the end, there are no winners.

KOLs’ so-called “rights defense” is, in fact, a microcosm of the entire crypto ecosystem.

From a “win-win tool” in the bull market to a “lose-lose trap” in the bear market, the deterioration of KOL rounds has exposed the deeper trust crisis within the crypto space.

The short-sightedness of project teams, the profit-driven mindset of KOLs, the blind following of retail investors, and even the lack of expertise among Agencies—these issues have all been magnified in this game.

When the market declines, everyone tries to protect themselves, yet few can escape being harvested.

KOLs being “rugged” isn’t just a simple profit dispute; it’s a reflection of the broader imbalance in the crypto ecosystem under bear market conditions. When liquidity dries up and funding chains break, everyone downstream in the value chain becomes a passive sacrifice.

Looking back, the controversy surrounding KOL rounds is, at its core, just growing pains in the industry.

When KOLs fight for their own rights, they are, in a way, speaking out for the entire ecosystem. Perhaps only after enduring this bear market will people truly understand that in a market without rules and trust, short-term winners will eventually become long-term losers.

But in a broader view, this may also be a chance for a reset. Market downturns often mark the beginning of ecosystem optimization—only through painful reflection and adjustment can the next wave of prosperity arrive.

Will the next bull run come as expected?

Perhaps that depends on whether today’s participants can truly learn from this bear market’s lessons and find a new balance for mutual success.

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