X Tightens Rules on Incentivized Posting, Triggering Drop in InfoFi Tokens

X has updated its platform policies to limit applications that provide financial incentives for posting or engaging on the network. The changes specifically affect InfoFi projects, which monetize user activity and the distribution of information through tokens. The update has already impacted markets, as tokens tied to these engagement-driven models fell in value after the policy change.

X Restricts InfoFi Apps 

Nikita Bier, head of product at X, shared that the platform is revising its developer API rules to block apps that reward users for posting, also known as InfoFi applications. Bier explained that these apps contributed to a high volume of AI-generated content and excessive automated responses, negatively affecting the platform experience. 

To address this, X has revoked API access for these apps. He noted that user experience should improve as bots lose incentives to post. Developers whose accounts were affected are encouraged to reach out for support in transitioning their projects to other platforms, including Threads and Bluesky.

InfoFi Tokens Fall as Market Reacts to X’s Policy Shift

The policy adjustment has caused noticeable declines in InfoFi-related cryptocurrencies. In the past 24 hours, the market capitalization of these tokens fell by more than 10%, with notable sell-offs including Kaito AI [KAITO], which fell more than 19%, and Cookie DAO (COOKIE), down over 13% during the same period.

Industry observers have largely welcomed the move. Michaël van de Poppe, a crypto commentator, said he was very pleased with the change, noting it would reduce bot comments. Ali Martinez also welcomed it, simply regarding it as good news.

InfoFi projects gained popularity in 2025 as crypto companies experimented with monetizing social engagement and information flow. Critics, however, have argued that the model prioritizes volume over meaningful interaction, often encouraging bot activity and spam rather than genuine participation.

Kaito’s Strategic Pivot

Following the policy change, Kaito announced it will retire its Yaps product along with the incentivized leaderboards. Founder Yu Hu explained that, after discussions with X, the company determined that fully permissionless, reward-driven distribution models could no longer operate effectively under the platform’s updated restrictions.

To adapt, Kaito will replace Yaps with “Kaito Studio,” a structured platform where brands select creators based on defined standards and work with them to achieve clear objectives. Hu added that the shift will not affect Kaito’s other products, including Kaito Pro, Kaito API, Kaito Launchpad, or Kaito Markets, which are planned for release soon. He also confirmed that the $KAITO token will remain an integral part of the Kaito Studio ecosystem.