Nikita Bier, X’s Head of Product, announced a major policy update revising the platform’s developer API rules. X will no longer permit apps that reward users for posting content on the platform—specifically calling out “InfoFi” (Information Finance) models.
These apps incentivize posting often with crypto tokens or points to drive engagement, but Bier cited them as the root cause of a massive surge in AI-generated slop (low-quality automated content) and reply spam, which has degraded the user experience.
In his post, Bier stated that X has already revoked API access for these apps, predicting improvements soon “once the bots realize they’re not getting paid anymore.” He also offered assistance to affected developers in transitioning their businesses to alternatives like Threads or Bluesky.
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This crackdown directly impacts the InfoFi sector, a Web3 niche where platforms reward social activity on X to promote crypto projects, communities, and narratives. Popular examples include tools that track “yaps” (posts) for points or tokens.
The most prominent fallout hit Kaito and its $KAITO token, a crypto analytics and AI-powered search platform heavily tied to InfoFi via its “Yaps” reward program. Kaito’s founder, Yu Hu, quickly responded by announcing the sunset of Yaps and incentivized leaderboards.
The project is pivoting to a more selective creator agency and marketing model under “Kaito Studio”—focusing on curated, high-quality partnerships with creators and brands across platforms including non-X ones like YouTube and TikTok, emphasizing performance metrics over permissionless rewards.
The market reacted sharply: $KAITO dropped roughly 17-20% from around $0.70 to $0.55-0.57 in hours, with increased trading volume signaling heavy selling pressure. Related assets, like Kaito’s Yapybaras NFTs, saw floor prices collapse over 50%.
Other InfoFi-linked tokens like $COOKIE fell 15-18%, and some projects like Cookie DAO halted reward features entirely. Reactions across X and crypto media are mixed: Supporters praise it as a cleanup of spam and bots, restoring authentic discourse.
Critics argue it’s overly broad, hurting legitimate tools and creators reliant on these models, and question why X didn’t target spam more surgically. This marks a turning point for InfoFi, shifting away from open, volume-based rewards toward curated, quality-focused approaches.
Kaito’s pivot strategy, announced by founder Yu Hu shortly after X’s January API policy update banning reward-based posting apps, involves sunsetting the permissionless Yaps program along with incentivized leaderboards and launching Kaito Studio as the new core direction.
This shift moves away from open, volume-driven “InfoFi” rewards that incentivized mass posting often leading to spam and low-quality AI-generated content toward a more curated, professional, and sustainable creator marketing and agency model.
Brands and projects will selectively partner with vetted creators who meet specific quality criteria, rather than open participation for anyone. Creators are chosen based on defined standards e.g., relevance, audience quality, past performance. Partnerships involve clear scopes of work, deliverables, and performance benchmarks.
Leverages Kaito’s existing AI-powered tools for sentiment analysis, attribution, relevance scoring, and performance tracking to ensure measurable ROI for brands and fair rewards for creators. No longer limited to X. Campaigns will span YouTube, TikTok, and other platforms, allowing broader distribution and reach.
Moving beyond crypto Twitter (CT) and the crypto niche into finance, AI, and the wider creator economy estimated at over $200 billion. This positions Kaito to capture a larger market share outside its original bubble.
Benefits emphasized for high-quality creators — Top and emerging creators who already produce relevant, high-impact content stand to gain more under this model, as it prioritizes quality, consistency, and analytics over sheer posting volume or mass incentives.
Core products unaffected — Kaito Pro (AI search and dashboards), API services, Launchpad, and ongoing work like Kaito Market (prediction markets) continue as normal. The $KAITO token retains utility in the new ecosystem.
Yu Hu described the change as a necessary evolution after discussions with X, noting that fully permissionless systems are no longer viable or aligned with high-quality brands, serious creators, or platform goals. The pivot happened rapidly—within hours of Nikita Bier’s announcement—suggesting Kaito had anticipated regulatory and API risks and prepared contingencies.
This positions Kaito more like a professional influencer marketing agency with strong data and AI edges, aiming for long-term sustainability over short-term hype. While it addresses spam concerns and opens bigger opportunities, it reduces accessibility for casual participants and contributed to the immediate ~20% drop in $KAITO amid the sector shakeout.
The full transition is unfolding in 2026, with more specifics likely to emerge as Kaito Studio rolls out partnerships and features. If you’re holding $KAITO or involved in creator and content spaces, this reframes the project from “post-to-earn” toward “perform-and-earn” in a more mature creator economy.
It highlights the risks of building heavily on centralized platforms’ APIs—changes can wipe out models overnight.