- KAITO fell 20% after X banned apps that reward users for posting.
- The crackdown also hit InfoFi NFTs and related tokens across the sector.
- X cited spam and AI-generated content as the reason for the policy change.
KAITO, the native token of the InfoFi protocol Kaito AI, slid sharply on Tuesday after X announced it would begin blocking apps that reward users for posting on the platform. The token fell roughly 20% on the day, dropping from around $0.70 to $0.56, according to CoinGecko data. The move sent shockwaves through the InfoFi niche, which relies heavily on social incentives tied to engagement on X.
X’s Policy Shift Hits InfoFi at the Core
The sell-off followed a statement from X’s Head of Product, Nikita Bier, who confirmed that the platform is revising its developer API policies. Under the new rules, apps that incentivize posting — commonly referred to as InfoFi — will no longer be allowed. Bier said these products have contributed to a surge in automated replies, AI-generated content, and spam, degrading the overall user experience. X has already revoked API access for affected apps and is offering support to developers looking to migrate elsewhere.
NFTs and Related Tokens Feel the Fallout
The impact wasn’t limited to KAITO alone. Prices for the Yapybaras – Kaito Genesis NFT collection collapsed alongside the token, with floor prices falling more than 50% to around 0.21 ETH on OpenSea. Other InfoFi-linked assets also came under pressure. Cookie DAO’s COOKIE dropped about 15%, LOUD slid roughly 16%, and ARBUS fell close to 9%. Across the sector, total market capitalization declined around 11.5% over the past 24 hours.
What This Means for InfoFi Going Forward
X’s move strikes directly at the business model many InfoFi projects depend on. By cutting off social rewards tied to posting, the platform is effectively removing a key growth engine for these protocols. While developers may pivot to other networks, the episode highlights a larger risk for crypto projects built on top of centralized platforms. When policy changes arrive suddenly, token prices tend to absorb the shock first.
For now, the InfoFi sector is reassessing its footing. Whether these projects can adapt without X, or find new distribution channels that don’t rely on engagement farming, will likely determine whether today’s sell-off turns into a longer-term reset.
