X has updated its platform policies to limit apps that offer financial incentives to post or interact on the network. The changes specifically affect InfoFi projects, which monetize user activity and information dissemination via tokens. The update has already impacted the markets, as tokens linked to these engagement-based models have lost value after the policy change.
In brief
- X updates its platform policies to limit InfoFi apps that fueled spam and AI-generated content, aiming to improve user experience.
- The policy change caused InfoFi-related tokens to fall sharply, with Kaito AI down more than 19% and Cookie DAO down more than 13%.
- Kaito responded by withdrawing its incentivized Yaps product and introducing Kaito Studio.
X restricts InfoFi apps
Nikita Bier, product manager at X, shared that the platform is revising its API rules for developers to block apps that reward users for posting, also known as InfoFi apps. Bier explained that these applications contributed to a high volume of AI-generated content and excessive automated responses, negatively affecting the experience on the platform.
To remedy this, X revoked API access to these applications. He noted that the user experience should improve as bots lose incentives to post. Developers whose accounts have been affected are encouraged to request support to move their projects to other platforms, including Threads and Bluesky.
InfoFi tokens fall as market reacts to X policy change
The policy adjustment led to notable declines in InfoFi-related cryptocurrencies. Over the past 24 hours, the market capitalization of these tokens has fallen by more than 10%, with significant sales including Kaito AI [KAITO]which lost more than 19%, and Cookie DAO (COOKIE), down more than 13% over the same period.
Industry observers mostly welcomed the move. Crypto commentator Michaël van de Poppe said he was very happy with the changenoting that it would reduce bot comments. Ali Martinez also welcomed it, just seeing it as good news.
InfoFi projects gained popularity in 2025 as crypto companies experimented with monetizing social engagement and information flow. Critics, however, argued that the model favored volume over meaningful interaction, often encouraging bot activity and spam rather than genuine participation.
Kaito's strategic pivot
Following the policy change, Kaito announced that he will withdraw his Yaps product as well as incentive rankings. Founder Yu Hu explained that after discussions with X, the company determined that fully permissionless, reward-based distribution models could no longer operate effectively with the platform's new restrictions.
To adapt, Kaito will replace Yaps with “Kaito Studio,” a structured platform where brands select creators based on defined criteria and collaborate with them to achieve clear goals. Hu added that this change will not affect Kaito's other products, including Kaito Pro, Kaito API, Kaito Launchpad, or Kaito Markets, which are scheduled for release soon. He also confirmed that the $KAITO token will remain an integral part of the Kaito Studio ecosystem.
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