On January 15, 2026, X (formerly Twitter) implemented a major developer API policy update, explicitly revoking access for applications that reward users with tokens for posting or engagement, the core mechanism of InfoFi (information finance) projects.
Nikita Bier, X’s Head of Product, described the move as necessary to combat “a tremendous amount of AI slop & reply spam” that had degraded platform experience through incentivized low-quality content.
This is part of X’s longer-term trend of tightening API access, which previously included limiting third-party tools and restructuring paid tiers to prioritize platform control over open developer freedom.
KAITO, the most prominent InfoFi-linked token, immediately sunset its Yaps reward system and token-incentivized leaderboards, both reliant on X API data. The project also announced a pivot to Kaito Studio, a new product focused on selective brand partnerships and creator engagement across multiple platforms.
Market reaction was swift and severe:
KAITO now trades over 80% below its all-time high of ~$2.88 (February 2025), signaling a rapid repricing of the InfoFi narrative.
Unlike pure DeFi protocols that rely on deterministic on-chain mechanics, InfoFi models are structurally dependent on permissioned external data (social engagement signals, content streams, interaction metrics) controlled by centralized platforms.
When that upstream data source is restricted, throttled, or revoked, the economic flywheel rewarding posting → generating engagement → driving token velocity → increasing token value can break almost instantly.
The X policy change proved that InfoFi’s growth engine is only as strong as the platform it depends on allows it to be.
The fallout extended beyond KAITO:
Many teams are now exploring:
These pivots require time, new capital, and user re-education and do not guarantee the same token velocity or narrative strength.
The sharp repricing and volume spike in KAITO and related tokens show the market interpreted this as a structural rather than temporary event.
Key lessons emerging:
The episode serves as a stark reminder: when financializing information and social behavior, alignment between incentive design, content quality, and platform governance is critical.
The InfoFi sector is now undergoing a painful but necessary maturity check, one that may ultimately lead to more resilient, decentralized, and sustainable models.
