A sweeping policy change by X has sent shockwaves through the InfoFi sector, after the platform banned all reward-for-posting (“post-to-earn”) applications and revoked their API access, citing spam and AI-generated content abuse.
The move effectively breaks the core business model of several InfoFi projects that relied on X’s API to track engagement, distribute rewards, and rank contributors — triggering sharp price declines across the sector.
KAITO plunges as post-to-earn model breaks
The hardest hit was Kaito ($KAITO), a project that rewarded users for posting crypto content on X.
With API access removed:
Tweets can no longer be tracked
Engagement cannot be verified
Rewards cannot be distributed
As a result, KAITO’s token price collapsed from $0.71 to $0.54, a 23% drop within minutes, as traders rushed to exit positions.
The market reaction reflects a rapid repricing of InfoFi tokens whose utility was entirely dependent on X-based engagement incentives.
InfoFi sector sees broad losses
The fallout quickly spread beyond KAITO:
$COOKIE (Cookie DAO) fell 18%
The broader InfoFi sector dropped approximately 13% within hours
Investors appear to be reassessing the long-term viability of social-platform-dependent token incentive models, particularly those relying on centralized APIs.
Projects pivot as X clamps down
Following the ban, affected projects moved swiftly to contain damage and signal strategic shifts:
Kaito
Suspended Yaps rewards
Removed public leaderboards
Announced expansion plans beyond X, including:
Kaito Studio
YouTube and TikTok integrations
AI-driven content and finance use cases
Cookie DAO
Shut down Snaps
Cancelled all active reward campaigns
Pivoted focus to data analytics and enterprise tooling, branded as Cookie Pro
These pivots suggest a broader transition away from pure post-to-earn mechanics toward data, analytics, and multi-platform distribution.
Why X acted — and what it means
X’s decision reflects growing pressure on social platforms to curb:
Spam campaigns
AI-generated engagement farming
Token-driven manipulation of social signals
By cutting off API access, X has reasserted centralized control over engagement monetization, dealing a major blow to decentralized InfoFi experiments built on top of its infrastructure.
Bigger picture: InfoFi model under scrutiny
The selloff highlights a key structural risk in InfoFi:
If rewards depend on a centralized platform’s API, the model is only as resilient as that platform’s policies.
While some InfoFi projects may successfully evolve into analytics, media, or AI-native businesses, the X ban marks a turning point for reward-for-posting tokens, forcing the sector to rethink sustainability, decentralization, and platform risk.
For now, markets are pricing in a harsher reality:
No API access means no engagement rewards — and no guaranteed token demand.
