Crypto markets face sudden turbulence as X tightens API access, targeting InfoFi apps that reward users for posting. The crackdown impacts projects like Kaito, which powered Yaps and incentivized leaderboards. X product head Nikita Bier announced on January 15 that API access for these apps has been revoked due to “tremendous amount of AI slop & reply spam on the platform.”
Consequently, platforms relying on user incentives now face operational hurdles. Bier added, "If your developer account was terminated, please reach out and we will assist in transitioning your business to Threads and Bluesky," signaling a broader shift away from InfoFi models.
The decision stems from X’s efforts to improve user experience and limit bot-driven content. InfoFi, a crypto concept, monetizes engagement by converting social and financial insights into rewards. Kaito, an AI-powered crypto search engine, distributed its native KAITO token for quality posts. However, the platform now faces structural changes.
Kaito founder Yu Hu explained, "After discussions with X, it’s agreed that a fully permissionless distribution system is no longer viable, nor aligned with the needs of high-quality brands, serious content creators, or X as a platform." Hence, Kaito will retire features like Yaps and leaderboards, replacing them with Kaito Studio, a tier-based marketing platform aimed at brands and creators.
Market Impact on Crypto Tokens
The news triggered sharp declines across InfoFi-related assets. KAITO token fell nearly 20%, dropping from $0.7011 to $0.5671. Kaito Genesis NFTs, known as Yapybaras, lost over 50% of their floor price, plummeting to 0.21 ETH. Additionally, COOKIE dropped 15%, LOUD 16%, and ARBUS 9%, collectively reducing the sector’s market value by 11.5% in a single day.
Community Response and Industry Implications
The move drew mixed reactions from the crypto and Web3 community. Dogecoin founder Billy Markus agreed that incentivizing spam is unsustainable. Blockchain sleuth ZachXBT called the decision “based,” praising X’s crackdown on bot-driven content.
However, Web3 Collective founder David Choukroun urged reconsideration, arguing that genuine creators deserve revenue alternatives. Moreover, the decision follows Bier’s recent claim that Crypto Twitter is “fixed,” highlighting ongoing platform challenges with algorithmic throttling and automated content.
Consequently, InfoFi developers must adapt quickly or migrate to alternative platforms. Besides addressing spam, X signals a strategic pivot prioritizing authentic engagement over monetized replies. This shift could redefine incentive models across the Web3 ecosystem.