X bans bots, impacting Kaito! The token drops nearly 20% instantly, is the InfoFi era coming to an end?

X bans InfoFi reward posting mechanism, completely blocks API, AI spam is cleaned up, $KAITO plummets over 15%, and the crypto community’s monetization models are forced to be rewritten.

Iron-fisted crackdown on “AI spam,” X unannounced bans InfoFi protocol API

On January 15th, the social platform X dropped a bombshell, officially announcing changes to its developer API policy, completely banning any applications that reward users for posting in exchange for digital assets.

X product lead Nikita Bier explicitly stated that projects called “Information Finance” (InfoFi) have led to an influx of “AI spam” and meaningless reply junk, severely damaging user experience.

Image source: X/@nikitabier X product lead Nikita Bier announces API policy changes, banning applications that reward user posts for digital assets

To curb non-organic interactions generated for “airdrop” purposes, X has revoked API access for multiple InfoFi projects. Bier pointed out that as these bot accounts realize their posting behavior no longer yields profits, the quality of discussions on the platform is expected to improve rapidly.

This policy change was not made on a whim. Previously, the community had repeatedly complained that “Crypto Twitter” was dying due to repetitive content and very low reach. Bier even openly stated that overused phrases like “gm” (Good Morning, crypto greeting) are one of the main reasons for poor content quality.

Further reading
Accidental killing of the crypto community? Industry insiders criticize X for limiting crypto tweets, X executive: it’s because crypto people love to post low-quality content

With X fully banning reward-based posting mechanisms, many developer accounts relying on X data were directly terminated. Bier even sarcastically offered to help these suspended developers migrate to Meta’s Threads or the decentralized community platform Bluesky, emphasizing that X no longer needs enterprise clients paying millions of dollars annually for API fees, as a better user environment is more important.

Token collapse and market cap shrinkage, $KAITO becomes the first victim

After the news broke, tokens highly tied to the InfoFi concept suffered a cascade decline. Among them, the native token of AI-driven information analysis platform Kaito, $KAITO , was hit hardest. According to CoinGecko data, $KAITO dropped over 15% within 30 minutes of Bier’s post. The price fell from about $0.7 to around $0.57.

As of the time of writing, $KAITO is priced at $0.56, with a market cap of approximately $135 million. Compared to the initial airdrop in February 2025, which had a fully diluted valuation (FDV) of up to $2 billion, the current situation looks particularly bleak.

Image source: CoinGecko $KAITO price at $0.56, market cap about $135 million

In addition to the token price plummeting, the NFT series “Yapybaras” within the Kaito ecosystem also suffered, with floor prices on OpenSea collapsing over 50%, from 0.5 ETH down to 0.21 ETH.

This policy revision has dealt a devastating blow to the entire InfoFi sector, with other related tokens such as Cookie DAO’s $COOKIE and $LOUD also falling between 11% and 16%. Data analysis shows that in the past 24 hours, the overall market cap of the InfoFi industry tokens has dropped an average of 11.5%. Although trading volume surged over 111% due to panic selling in the short term, this is clearly not a sign of market confidence returning, but rather investors rushing to cut losses.

Farewell to the “Yaps” reward model, Kaito forced to initiate strategic transformation

In response to X’s strong crackdown, the Kaito team quickly announced the shutdown of the original “Yaps” reward mechanism and leaderboard. Kaito founder Yu Hu stated that although Yaps was once seen as a manifestation of Web3 spirit—allowing users to earn rewards based on contributions in an open and permissionless manner—after more than a year of experimentation, even with stricter qualification restrictions, higher point thresholds, and on-chain filters, the problems of AI spam and junk replies could not be fully solved.

Yu Hu admitted that with changes to X’s algorithm and the emergence of other unrestricted InfoFi projects, the overall discussion quality within the crypto community continues to deteriorate.

Image source: X/@Punk9277 Kaito founder Yu Hu announces the official transition to “Kaito Studio” era

To seek survival amid the bans, Kaito announced the official shift to the “Kaito Studio” era. The new model will abandon the previous large-scale, indiscriminate reward system, moving toward a more traditional, tier-based marketing platform approach.

In Kaito Studio, brands will collaborate with creators who meet certain thresholds and pass reviews, using more precise data analysis to evaluate influence. Yu Hu emphasized that Kaito’s future will no longer be limited to X, but will also expand to YouTube, TikTok, and other multimedia platforms, aiming to transition from a purely crypto vertical industry to a broader content creator economy encompassing artificial intelligence and finance industries.

The end of the traffic farm era? Community reflects on “monetization of attention”

X’s strong enforcement has garnered support from many well-known figures in the crypto industry.

• On-chain detective ZachXBT has repeatedly accused projects like Kaito and other InfoFi projects of using fake interaction metrics for marketing, even saying that the prosperity artificially created by these efforts has made X nearly unusable. He believes many projects use InfoFi to bombard with AI-generated spam, causing more harm than good to the crypto community.

Image source: X/@zachxbt On-chain detective ZachXBT accuses Kaito and other InfoFi projects of using fake interaction metrics for marketing

• Renowned analyst Nic Carter also praised X’s actions, believing they help cleanse the platform of non-organic participation and restore a normal discussion space for users.

Image source: X/@nic_carter Renowned analyst Nic Carter also praises X’s actions

Despite the survival crisis faced by InfoFi projects, X has not completely rejected crypto functions. Just days before the policy change, X launched the “Smart Cashtags” feature, allowing users to click directly on token codes (like $BTC) to view real-time prices, charts, and detailed data on smart contracts.

Further reading
X to launch Smart Cash Tags! Tweets directly link to crypto prices and smart contracts, rumored to open for trading?

This indicates that X is more inclined to provide official, controllable data tools rather than a reward ecosystem led by third-party projects. Currently, Kaito still maintains unaffected product lines such as Kaito Pro, Kaito API, Kaito Launchpad, and Kaito Markets. However, with the end of the “post and earn” reward model, whether InfoFi projects can successfully transform into data-driven professional platforms remains a challenge for the market and time.