X Bans InfoFi Apps: KAITO Drops 20% After API Crackdown
Elon Musk's X revokes API access for crypto 'InfoFi' apps citing AI spam. KAITO token plummets as the attention economy faces its first major platform ban.
X just banned an entire category of crypto apps.
Nikita Bier, X's Head of Product, announced today that the platform is revoking API access from all "InfoFi" applications — apps that reward users for posting on X.
KAITO, the leading InfoFi token, dropped 20% within hours.
Here's what happened, why it matters, and what comes next.
What Happened
Nikita Bier posted the announcement directly on X:
"We are revising our developer API policies: We will no longer allow apps that reward users for posting on X (aka 'infofi'). This has led to a tremendous amount of AI slop & reply spam on the platform.
We have revoked API access from these apps, so your X experience should start improving soon (once the bots realize they're not getting paid anymore).
If your developer account was terminated, please reach out and we will assist in transitioning your business to Threads and Bluesky."
That last line — offering to help projects migrate to competitors — signals this isn't a temporary policy. X is done with InfoFi.
KAITO Price Impact
KAITO, the native token of Kaito AI (the largest InfoFi platform), dropped immediately:
| Metric | Before | After |
|---|---|---|
| Price | ~$0.70 | ~$0.56 |
| Drop | — | -20% |
| Market Cap | ~$175M | ~$140M |
The token's fully diluted valuation peaked near $2 billion after its February 2025 airdrop. It's now around $586 million.
What is InfoFi?
InfoFi — short for "Information Finance" — is a concept first introduced by Vitalik Buterin in November 2024.
The idea: tokenize attention. If your posts get engagement, you earn rewards. Content becomes a monetizable asset.
KAITO built this into a product called "Yaps" (Yielded Attention Protocols). Post on X, earn Yap points based on engagement, convert to KAITO tokens.
The problem: When you pay people to post, you get a lot of posts. Not all of them are good.
Why X Banned InfoFi
The spam got out of control.
According to Ki Young Ju, founder of CryptoQuant, bots generated over 7.7 million crypto-labeled posts in a single day — a 1,224% increase from normal activity.
When every post is potentially worth money, the incentive to spam is enormous. AI-generated replies flooded crypto discussions. Quality collapsed.
Bier's announcement specifically called out "AI slop & reply spam" as the reason for the ban.
Who is Nikita Bier?
Bier isn't a random executive. He's a serial entrepreneur known for building viral apps:
- TBH (2017) — Acquired by Meta for ~$100M
- Gas — Acquired by Discord
- Solana Labs advisor — Joined March 2025
He joined X as Head of Product in June 2025, after years of pitching himself to Musk. In 2022, he posted "@elonmusk Hire me to run Twitter as VP of Product." Three years later, he got the job.
He's also a Solana advisor — which makes this move interesting. He's not anti-crypto. He's anti-spam.
The Bigger Picture
This is the first major platform crackdown on attention tokenization.
The argument for InfoFi: Creators deserve to be paid for the attention they generate. Tokenization makes this possible.
The argument against: Financial incentives corrupt content quality. When posting = money, authenticity dies.
X chose platform quality over the InfoFi experiment.
What This Means for Crypto
A few takeaways:
1. Platform dependency is a risk
KAITO's entire model relied on X's API. One policy change wiped out 20% of its value. Projects built on third-party platforms are vulnerable.
2. Attention tokenization isn't solved
The idea that engagement should have value isn't wrong. The execution — paying for every post — created bad incentives. Future InfoFi projects will need better spam resistance.
3. Crypto's reputation on X matters
Ki Young Ju pointed out that X's bot detection failed, and "bots now pay to spam." The platform's response was to ban the entire category rather than improve detection. Crypto takes the blame.
What Happens to KAITO?
KAITO isn't dead, but it needs to pivot.
The Kaito AI platform still offers:
- AI-powered crypto search engine
- Web3 content aggregation
- Analytics and signal detection
The "Yaps" system that rewarded X posting is effectively killed. The core product — AI search for crypto — still works.
Whether that's enough to sustain the token's value is the question.
Bottom Line
X banned InfoFi apps to fight spam. KAITO dropped 20%. The attention economy's first major experiment hit a wall.
The concept of tokenizing attention isn't dead — but "pay people to post" clearly doesn't work at scale. Future projects will need smarter incentive design.
For now, expect fewer bots in your X replies. That's probably a good thing.
Not financial advice
This article is for informational purposes only. Cryptocurrency prices are volatile. Always do your own research before making investment decisions.
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