X Shuts Down InfoFi Apps, Triggering KAITO Token Sell-Off and Scrutiny

X has revoked API access for applications that reward users for posting content, effectively banning so-called InfoFi platforms from operating on the site. The decision was announced by X head of product, Nikita Bier, who said incentive-based posting had driven a surge in low-quality, AI-generated replies and spam, prompting a policy revision aimed at improving user experience.

Bier said X would “no longer allow apps that reward users for posting,” adding that API access had already been revoked and that users should begin seeing improvements as automated accounts stop posting once incentives are removed. He also said developers affected by the change could reach out for help transitioning to alternative platforms such as Threads and Bluesky.

The policy shift had an immediate impact on crypto-focused engagement platforms. Kaito announced it would sunset its “Yaps” product, which rewarded users with points, tokens, and airdrops for posting and engaging with crypto content on X. Shortly after the announcement, the Kaito Yapper community on X, which had about 157,000 members, was banned after losing API access.

Cookie DAO also confirmed it would wind down its “Snaps” product, which operated under a similar reward-for-posting model. Both platforms had incentivized high engagement volumes, often leading users to rely on AI-generated replies to maximize rewards.

Following Bier’s announcement and Kaito’s confirmation, the KAITO token experienced a sell-off. During , market data projected KAITO falling from a range of $0.66–$0.68 to around $0.5412, representing a decline of roughly 17%-19%.

Trading activity surged during the move, with 24-hour volume rising to approximately $161.33 million, up about 238%. However, KAITO’s market capitalization dropped to about $130.64 million.

The ban also coincided with unusual on-chain activity involving KAITO staking. More than 1 million KAITO tokens are scheduled to be unstaked on Friday, a level reported to be 20 to 30 times higher than normal. As the unstaking process requires a seven-day waiting period, the timing drew attention from market participants.

Kaito team shipped over $5 million in tokens in seven days. During the process of communicating with Twitter to cancel the API, they learned of the negative news early and exited ahead of time.