Risks | Notion

Meme copy-trading logic is broken in today’s market: The current meme market is an extremely PvP, information-asymmetric environment. The typical information flow is: private alpha groups → public discussion → KOLs. By the time a KOL is trading live, the information is already at the tail end of the chain, and followers are likely to become the exit liquidity. Live streams, with their low information density and inherent latency, are ill-suited to the high-velocity nature of meme trading.
Extreme dependence on market cycles: The model relies on continuously attracting new retail participants. It is only likely to work in broad-based bull markets with strong breakout effects, when there is a steady influx of newcomers. In today’s stock-vs-stock environment with limited new money, the foundation for this model does not hold. Platform revenue is tightly coupled to speculative heat and volatility in crypto.
Backup scenario faces intense competition: Setting aside the questionable meme copy-trading logic, the remaining path is futures copy-trading. That would put Sidekick in direct competition with major centralized exchanges such as Binance and OKX, which enjoy massive user bases, deep liquidity, and mature live-streaming stacks. Sidekick has no clear competitive edge here.

Immature and hard-to-scale MCN model: Web3 lacks mature MCN (multi-channel network) frameworks. Sidekick’s current approach of directly managing streamers carries very high operating and headcount costs under hyper-growth strain. While the team plans to pivot to supporting third-party MCNs, there are few proven success cases in Web3. Designing incentives, managing partners, and preventing top KOLs from graduating and going independent will be challenging.
Quality concerns with signed creators: Many signed streamers appear to be airdrop-chasing profiles, using Sidekick primarily to position for potential platform airdrops rather than to produce quality content. This extractive behavior undermines the authenticity of content and the quality of user conversion, and is likely to drive significant user churn once airdrops end.
Internal organization and control challenges: As the team scales to roughly 50 people, governance, internal coordination, KOL relationship management, and wallet-security operations become more complex. Stronger org design and clear decision-making systems will be required.

Valuation disconnected from fundamentals: Given the structural flaws in the model and its high beta to market cycles, a $150 million valuation is already top-tier for a Web3 project and appears to embed substantial froth.
Compliance and regulatory uncertainty: The platform has prioritized growth first and compliance later. As scale increases, the nature of “copy trading” may invite exchange-like regulatory scrutiny. Recent years have seen stricter enforcement by regulators such as the U.S. SEC against crypto influencers and platforms. Any behavior related to unregistered securities or investment advice carries significant legal and reputational risk.
Geographic expansion risk: Although the mitigation plan prioritizes Asia in the near term, risks remain. Regulatory approaches to crypto vary widely across Asian markets and shift quickly, creating ongoing uncertainty for compliant operations.