In a major policy shift, social media platform X (formerly Twitter) has banned "InfoFi" applications, which reward users with cryptocurrency tokens for posting content, citing a massive increase in AI-generated spam and reply noise that degraded the user experience. The company, led by Nikita Bier, revoked API access for these apps immediately, effectively ending a key tool crypto projects used to drive engagement.
The ban directly impacted the Web3 information platform Kaito and its 157,000-member "Kaito Yappers" community. In response, Kaito announced a strategic pivot, sunsetting its rewards-based Yaps service and launching Kaito Studio, a tier-based professional marketing platform. Kaito founder Yu Hu stated the decision followed direct discussions with X and acknowledged that a fully permissionless distribution system is no longer viable.
The market reacted swiftly to the news. Kaito's native KAITO token plunged 15.36% to $0.57, with trading volume surging 115% to $138.5 million as holders repositioned. The token now trades 80% below its all-time high of $2.88 reached in February 2025.
The policy change was triggered by a documented crisis in automated posting. CryptoQuant CEO Ki Young Ju reported that bots generated 7.75 million crypto-related posts on January 9 alone—a 1,224% increase attributed to InfoFi activity. Bier described the targeted content as "AI slop & reply spam" and suggested affected developers transition their businesses to platforms like Threads and Bluesky.
Kaito Studio represents a fundamental business model evolution. It will move away from open, token-incentivized participation to a selective partnership model where brands collaborate with creators meeting specific professional criteria. Performance will be measured against defined scopes of work. The platform plans to expand beyond X to YouTube and TikTok and beyond crypto into finance and AI verticals. Yu Hu confirmed the KAITO token will continue to have a role in the new Studio ecosystem.
Industry analysts view this as part of a broader Web3 platform maturation. The shift reflects a move from growth-through-token-incentives to sustainable, value-driven professional services. Nansen CEO Alex Svanevik called X's decision a "rescue for the crypto Twitter community," highlighting criticism that the InfoFi model encouraged low-quality content and artificial engagement.
