X Bans ‘InfoFi’ Apps to Crush Spam; KAITO Plummets 20%

X (formerly Twitter) has effectively killed the "InfoFi" sector on its platform, revising its API policies to ban applications that reward users for engagement. The immediate crackdown sent Kaito (KAITO) crashing 20%, forcing the project to sunset its flagship "Yaps" product.

The "AI Slop" Purge

Nikita Bier, X’s Head of Product, announced the policy shift on Wednesday, stating the platform had revoked API access for apps incentivizing posts. "This has led to a tremendous amount of AI slop and reply spam on the platform," Bier noted, advising displaced developers to migrate to Threads or Bluesky.

The move targets the core mechanism of InfoFi: tokenized rewards for social media activity. By cutting API access, X has dismantled the infrastructure allowing these protocols to track and score user engagement in real-time.

Market Reaction: Instant Repricing

Liquidity fled the sector immediately. KAITO, the leading token in the niche, slid from $0.70 to $0.56 (-20%) within hours of the announcement. The sell-off extended to the project’s NFT collection, Yapybaras, which saw its floor price collapse over 50% to 0.21 ETH as utility concerns mounted.

Contagion spread to similar "post-to-earn" assets:

• Cookie DAO (COOKIE): Dropped 15% to trade near $0.045.
• LOUD: Fell 16%.
• ARBUS: Slid 9%.

The total market capitalization of InfoFi tokens contracted by 11.5% in the aftermath.

Kaito Pivots to ‘Studio’

Kaito founder Yu Hu confirmed the protocol would sunset Yaps, a feature allowing users to earn points for engagement, and pivot to Kaito Studio. Hu described the new direction as a tier-based marketing platform closer to traditional models, moving away from the incentivized farming loops that triggered X’s ban.

The enforcement marks a definitive end to the "farm-to-earn" meta on X, forcing Web3 social protocols to abandon direct engagement farming or move off-platform entirely.