KOLs: Definition, Characteristics, and Industry Influence

In this article, we’ll explore who KOLs are, how they differ from influencers, how they collaborate with projects, and why their influence in crypto is so divisive. You’ll learn about the risks of partnering with KOLs, how their actions can impact retail investors, and some notable cases involving them.

Read on to discover how to recognize trustworthy KOLs and avoid those motivated solely by profit.

KOLs (Key Opinion Leaders) are influential media personalities who shape public opinion through their social capital and authority. Unlike general influencers, KOLs focus on professional expertise and specialized knowledge, making their opinions particularly valued in niche markets. 

Opinion leaders have existed long before the internet.

Historically, they were respected experts in fields like medicine, politics, science, and culture, with perspectives that shaped public sentiment. Before the digital age, they delivered public lectures, authored books, or published articles in academic journals.

With digital technology, their influence expanded online. Today, KOLs connect with audiences through social media platforms like X and Instagram, turning their expert opinions into effective marketing tools.

KOLs and influencers share similar functions, but their approaches and goals differ significantly. Influencers typically promote products for payment, often basing their endorsements on sponsored contracts. Their primary focus is financial gain, where the size of their following and engagement rate take priority over the quality or depth of their knowledge.

In contrast, KOLs are valued for their expertise in specific fields. Their audiences appreciate them not for advertising, but for unique insights and real-world experience.   

This sometimes leads to undisclosed sponsorships, creating trust issues and breaching advertising transparency laws. While KOLs strive to maintain credibility, the pursuit of financial incentives often pushes them closer to traditional influencer behavior.

KOL marketing has evolved over time. While KOLs once worked on a straightforward “pay-for-service” basis, today they can participate in funding rounds under more favorable conditions.

Instead of direct payment, projects might offer KOLs a stake in their tokens, early access to asset sales, and discount rates. According to CoinDesk, this approach is widely used by founders of major projects, investors, and traders.

While such arrangements can create mutually beneficial conditions, they also introduce potential conflicts of interest with the audience.

The key question is whether the general public is aware of these behind-the-scenes agreements.  

From a consumer standpoint, lack of transparency can lead to uninformed decisions based on incomplete or biased information. To prevent this, KOLs should educate retail investors about their work practices and the potential risks tied to their endorsements.

Ultimately, creating an environment where transparency and honesty are core values protects investors and maintains trust in the industry.

This opinion leader frequently failed to disclose his financial gains from these promotions. Such tactics misled investors and created a risk of financial losses for ordinary users.

BitBoy soon faced legal consequences for his actions. The Commodity Futures Trading Commission (CFTC) launched an investigation into alleged fraud involving BitBoy’s promotion of 15 tokens, including his personal meme coin, BEN.  

Humanity Protocol, a startup aiming to unseat its major competitor Worldcoin, is leveraging KOLs to boost its marketing efforts, as reported by CoinDesk in May 2024.

According to an investor presentation, Humanity Protocol secured $1.5 million in funding from angel investors and KOLs. As part of their agreement, these opinion leaders committed to promoting the project on social media for six months. Their responsibilities included engaging with at least three tweets weekly through likes and comments, publishing three tweets specifically about Humanity Protocol, and participating in at least one Twitter Spaces event hosted by the project.

This approach uses the SAFT (Simple Agreement for Future Tokens) model, allowing startups to offer tokens rather than company equity, thereby creating unique incentive structures unavailable to typical retail investors.

The practice of paying KOLs to endorse projects has sparked concern among users, as it reveals that influencer recommendations may be driven by financial motivations rather than genuine personal support. This transparency brings to light that the opinions shared by influencers may be influenced by promotional agreements rather than firsthand experience.

In July 2024, Polkadot released a report showing that it spent over $87 million in the first half of the year, with half of this directed toward partnerships with key opinion leaders (KOLs). This spending pattern hints at a shift in the crypto industry, where it seems that marketing strategies are taking precedence over building genuine project value.

The community is left questioning: are companies more invested in their image and drawing attention than in creating meaningful products?

At the Token 2049 conference in Singapore, crypto influencer Professor Crypto won the “Best Content Creator” award, even though he was virtually unknown. Later, it was revealed that his social media activity—likes, followers, and views—was largely fake, generated by bots.

Related: Bots in Crypto: Their Roles, Impacts, and Detection Methods

This approach created the illusion of popularity and authority, boosting his value as a KOL for projects and regular users alike.

Fake engagement serves those looking to sell advertising services, as projects are often willing to pay more for promotions, believing the KOL has a sizable, engaged audience.

The lack of transparency surrounding these methods misleads users. Many may trust KOL recommendations, unaware that opinions could be bought, which presents risks for investors.

As a result, Professor Crypto faced backlash from genuinely influential figures in the industry.

One notable response came from prominent blockchain investigator ZachXBT, who reacted to Professor Crypto’s post celebrating his award. ZachXBT accused him of using thousands of bots and suggested these actions might violate U.S. Federal Trade Commission regulations. 

Інвесторам важливо вміти розрізняти надійних експертів від несумлінних агітаторів. Неправильний вибір KOL може призвести до фінансових втрат і розчарування, тоді як правильний — до поліпшення знань і усвідомленості на ринку.

Також використовуйте інструменти для аналізу активності KOL, на кшталт Social Blade або HypeAuditor, щоб перевірити, чи не накручують KOL активність на своєму акаунті.