X API Ban Kills Kaito and InfoFi Crypto Projects: The Death of AI Slop?

X has revoked API access for apps that reward users for posting on the platform, effectively banning so-called “InfoFi” projects that paid users to generate engagement. 

Product lead Nikita Bier said the model created “a tremendous amount of AI slop and reply spam,” adding that the changes should quickly improve the quality of content once automated bots stop getting paid.

InfoFi Crypto Projects Collapse

The decision triggered an immediate sell-off across InfoFi tokens. Kaito, Cookie DAO, BubbledMaps, Loud, Arbus and several others fell sharply within hours as traders priced in the loss of their core distribution and growth engine.

In response, Kaito founder Yu Hu confirmed the company will sunset Yaps and its incentivized leaderboards and pivot to a new product called Kaito Studio. 

Cookie, another InfoFi platform, also announced it would shut down Snaps, its creator campaign system, after discussions with X about API and usage policies. 

The company said it remains an Enterprise API customer but could not operate reward-based posting programs under the new rules.

Crypto Twitter Can Breathe Again

The market reaction was swift because InfoFi tokens were built around monetizing attention on X. These platforms tracked posts, replies, and engagement, then distributed tokens or points to users who generated visibility for projects. 

Kaito’s Yaps system became the largest version of this model in crypto, driving hundreds of thousands of users, particularly in South Korea, according to the company.

However, the model had already come under strain. Kaito’s KAITO token launch in early 2025 sparked heavy backlash after users found that Yaps points converted into much smaller token allocations than expected. 

Critics also pointed to insider-heavy tokenomics and fast post-airdrop selling, which pushed the token lower and damaged trust in the incentive structure.

Those problems intensified as AI-generated content flooded X. Because Yaps rewarded volume and engagement at scale, bot networks and low-quality farms increasingly dominated leaderboards. This diluted genuine research and commentary.

X’s API crackdown now forces a hard reset. Many traders and creators welcomed the move, arguing that incentive farming had hollowed out organic crypto discourse.

The broader InfoFi sector now faces an existential shift as the attention economy on X moves from open tokenized rewards to curated, platform-compliant partnerships.