What Did X Change—and Why?
X has moved to block applications that reward users for posting on the platform, revoking developer API access for services tied to paid engagement. The decision was confirmed Thursday by X product lead Nikita Bier, who said the company had already cut off access for affected apps.
“We have revoked API access from these apps, so your X experience should start improving soon (once the bots realize they’re not getting paid anymore),” Bier wrote in a public post. He linked the policy change directly to what he described as a surge in low-quality automated replies and spam driven by incentive-based posting models.
The update represents a clear shift in how X is handling third-party monetization strategies that sit on top of its social graph. While the platform has long tolerated bots and automated engagement, the explicit targeting of paid-posting models signals growing friction between X’s product goals and crypto-linked attention economies.
Investor Takeaway
How Did the Market React?
The policy shift hit tokens tied to InfoFi activity almost immediately. Kaito, the native token of the InfoFi network that tracks trending crypto conversations on X, dropped more than 10% shortly after Bier’s post. The decline extended through the session, with the token trading around $0.59 at publication, down roughly 14.5%.
Kaito’s market capitalization stands near $140 million, with a fully diluted valuation of about $586 million. At its peak, shortly after its February 2025 airdrop, Kaito’s fully diluted valuation climbed close to $2 billion. The speed of the reversal underlined how sensitive InfoFi-linked tokens remain to platform-level policy changes.
Kaito aggregates posts from prominent crypto accounts to surface topics gaining traction across the community. That model depends heavily on access to X’s data and on users’ willingness to post frequently—often driven by token rewards or leaderboard incentives.
Why Is X Targeting InfoFi Models?
Bier singled out InfoFi as a source of declining content quality on the platform, writing that it had led to a “tremendous amount of AI slop & reply spam.” The criticism reflects a broader concern inside X that financial incentives tied directly to posting volume distort behavior and degrade the user experience.
Unlike traditional marketing tools, InfoFi platforms often combine token rewards, leaderboards, and automated prompts to encourage constant engagement. In practice, that has produced waves of repetitive replies, low-effort summaries, and AI-generated responses designed to farm points rather than contribute discussion.
Bier also suggested that developers affected by the change should look elsewhere. “If your developer account was terminated, please reach out and we will assist in transitioning your business to Threads and Bluesky,” he wrote, pointing to rival social platforms as alternative venues.
How Is Kaito Responding?
Following the API revocation and market reaction, Kaito announced it would sunset its Yaps product and incentivized leaderboards. In their place, the company plans to roll out Kaito Studio, which founder Yu Hu described as closer to a tier-based, traditional marketing platform.
“Over the past year, we experimented with tighter eligibility, higher threshold in leaderboards, social + onchain filters and different incentive designs,” Hu wrote in a post on X. He added that platform-wide algorithm changes on X, combined with other InfoFi projects launching with minimal or no thresholds, meant spam and low-quality content persisted across crypto social feeds.
The pivot suggests Kaito is attempting to move away from open-ended engagement farming toward a model that looks more like managed campaigns and paid placements. Whether that approach can support a tokenized network at scale remains an open question.
Investor Takeaway
What Does This Mean for InfoFi and Crypto Social Tokens?
The episode highlights a structural weakness in InfoFi models: dependence on a single social platform’s API and rules. Unlike DeFi protocols or onchain infrastructure, social-driven crypto products sit downstream from centralized networks that can change terms without warning.
X’s move also comes as social platforms face growing pressure to curb automated content and AI-generated spam. As those efforts intensify, crypto projects built around attention mining may find fewer places to operate at scale.
