X Cracks Down on Rewarded Posting, Shaking InfoFi Projects
The decision of X to ban InfoFi projects has sent shockwaves through the crypto community, with the KAITO token plummeting by 20% in a single day. This drastic market reaction was led by investors who see the move as a structural threat rather than a short-term policy change. The KAITO token, linked to the Kaito platform, fell from around $0.70 to $0.57 in a matter of hours, with trading volume rising by almost 87% to over $121 million.
Kaito, Cookie, Xeet Rethink Structure After X Policy Shift
According to Nikita Bier, X’s head of product, the company is revising its developer API rules to block applications that reward users for posting on the platform. This move aims to reduce the amount of low-quality content and spam on the platform. Bier stated that these incentives have led to a rise in automated posts and what he called “AI slop-and-reply spam,” resulting in a deterioration in the overall user experience.
X confirmed that API access has already been revoked for affected apps, and Bier added that developers whose accounts were terminated could seek help transitioning their companies to other platforms such as Threads or Bluesky. The announcement has significant implications for InfoFi projects, which are based on the collection, analysis, and monetization of X data.
Source: Coingecko
Impact on the Crypto Market
The KAITO token is now trading more than 80% below its all-time high of $2.88. Similarly, the COOKIE token fell by more than 20% to around $0.038 in 24 hours, with volume also increasing. This surge in trading activity suggests that holders are reassessing their exposure as uncertainty spreads.
Source: Coingecko
Behind the price action is a deeper debate about whether InfoFi’s incentive structures were sustainable. Critics had long argued that paying users to post promoted attention-grabbing and automated content – a charge that gained credence as timelines were filled with repetitive, AI-generated responses.
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