- X has banned crypto reward-based posting apps to reduce spam and AI-generated noise.
- KAITO token fell about 15% following the policy change.
- Kaito is shifting from open incentives to curated creator-brand partnerships.
Elon Musk’s X has drawn a clear line against crypto-powered posting incentives, moving to shut down apps that reward users for engagement. The decision marks a sharp turn in how the platform views “InfoFi” models — projects designed to turn attention and activity into on-chain rewards — and it’s already reshaping parts of the crypto social ecosystem.
X product chief Nikita Bier confirmed that several incentive-based apps have lost API access, citing a surge in reply spam and low-quality AI-generated content. The message from X was blunt: posting on the platform should not be treated as a revenue stream.
X Targets InfoFi and Incentivized Posting
According to Bier, financial rewards tied to posting behavior created distorted incentives. Instead of meaningful discussion, bots and low-effort accounts flooded replies with repetitive or AI-written content designed to farm rewards. By cutting off API access, X aims to remove the economic motivation behind that behavior.
The move aligns with broader platform changes, including tools like Smart Cashtags that surface real-time crypto and stock data without relying on third-party reward mechanics. X appears focused on improving usability while limiting schemes that monetize engagement at scale.
KAITO Token Reacts as Market Digests Policy Shift
The market reaction was swift. KAITO, the token linked to the Kaito AI protocol, dropped roughly 15% within hours of the announcement, sliding from around $0.70 to near $0.57, according to CoinGecko data. The decline reflected investor concern that X’s policy change could undermine demand for incentive-driven crypto social tools.
While the sell-off was sharp, it also highlighted how closely some tokens are tied to platform-specific engagement models — and how vulnerable they can be to sudden policy changes.
Kaito Pivots Away From Open Incentives
Kaito founder Yu Hu responded by outlining a strategic shift. The project is winding down its “Yaps” reward system and incentivized leaderboards, transitioning toward a new initiative called Kaito Studio. Hu described the move as a step toward higher-quality creator and brand collaboration rather than open-ended reward loops.
Hu acknowledged that spam remained a challenge across crypto posting ecosystems, especially as multiple reward programs competed for attention. Even with tighter filters and eligibility rules, low-quality content continued to spread, driven by broader algorithm changes and looser incentive schemes elsewhere.
Kaito Studio will focus on curated, analytics-driven partnerships, matching brands with relevant creators instead of distributing tokens at scale. The model mirrors a wider industry shift away from large airdrops toward behavior-specific incentives.
Importantly, Hu said the transition won’t affect Kaito’s other products, including Kaito Pro, API services, Launchpad, and Markets. KAITO will continue to play a role in the new studio framework, with more details expected.
Also Read: Coinbase Pulls Support From US Crypto Bill Days Before Key Hearing
X’s crackdown signals a broader reset for crypto-native social incentives. As platforms tighten enforcement and users demand cleaner feeds, projects built on attention rewards may need to evolve — or risk being filtered out entirely.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. CoinBrief.io is not responsible for any financial losses.
