The price of Kaito fell sharply after X revised its developer API policies to block applications that reward users for posting on the platform, a move that directly targets so-called InfoFi crypto projects. X said it had revoked API access from apps that financially incentivize posting behavior, citing a surge in automated replies, low-quality content, and spam driven by artificial intelligence tools. The policy change immediately weighed on projects built around monetizing engagement data from the platform. Kaito, whose network aggregates and analyzes crypto-related posts on X to surface trending narratives, saw its token drop by more than ten percent following the announcement. The episode highlights the dependency of certain crypto business models on centralized social media infrastructure that can change rules with little notice.
InfoFi projects have grown by rewarding users or automated agents for posting, replying, or amplifying content, effectively turning social engagement into a yield-generating activity. According to X, that approach degraded the overall user experience and distorted conversation quality across the platform. The policy shift removes a key distribution and data access channel for these projects, forcing them to either redesign products or migrate elsewhere. Following the API revocation, X encouraged affected developers to transition toward alternative social platforms. For Kaito, the loss of direct access undermines core functionality tied to real-time data extraction and incentive mechanisms. The token’s decline reflects broader market skepticism toward crypto models that rely heavily on platform-specific arbitrage rather than durable infrastructure or independent demand.
In response, Kaito said it will phase out its incentive-driven features and reposition toward a more traditional marketing and analytics model. The project plans to sunset its reward-based leaderboards and launch a new product focused on tiered services rather than direct token incentives. The shift signals an acknowledgment that engagement rewards tied to social platforms face structural risk as policy scrutiny increases. The incident underscores a wider challenge for crypto applications operating at the intersection of social media, data, and incentives. As platforms tighten controls to reduce spam and automated behavior, token-based engagement models may struggle to sustain value, reinforcing the importance of resilience and independence in crypto product design.
