The X API Ban and the Death of Post-to-Earn: What's Next for InfoFi Tokens Like KAITO?

The social media landscape in 2025 has been irrevocably altered by X's (formerly Twitter) sweeping API policy overhaul, which effectively banned "InfoFi" platforms that reward users for posting content. This move, framed as a necessary step to combat spam and AI-generated content, has sent shockwaves through the post-to-earn ecosystem, with tokens like KAITO plummeting in value and projects like CookieDAO shuttering services. As we assess the long-term viability of incentivized content platforms in an increasingly regulated environment, the implications for InfoFi tokens-and the broader crypto-native social media sector-are profound.

The X API Ban: A Regulatory Clampdown on InfoFi

X's decision to revoke API access for apps that reward users for posting content was not arbitrary. Nikita Bier, X's head of product, explicitly cited the rise of "AI slop & reply spam" as a justification, arguing that incentivized posting models had degraded platform quality and enabled bot farming. The ban targeted projects like Kaito and CookieDAO, which relied on X's API to distribute tokens for user engagement. Within hours of the announcement, KAITO's token dropped over 14%, and CookieDAO announced the termination of its Snaps service, which measured influencer impact.

This regulatory-like action by X aligns with broader industry trends. Platforms like Facebook (2015) and Reddit (2023) have previously restricted monetization models to prioritize user experience according to industry analysis. However, X's move is particularly significant given its role as a cornerstone of the crypto community. Critics argue that the ban stifles innovation in social media monetization and penalizes legitimate creators who rely on these platforms for income as reports indicate. Yet, proponents view it as a necessary step to curb spam and align with global regulatory expectations, such as the EU's Digital Services Act and U.S. FTC guidelines according to crypto analysis.

Industry Reactions and Immediate Fallout

The market's response to the X API ban was swift and severe. Kaito, one of the most prominent InfoFi platforms, announced the sunsetting of its Yaps app and open incentive leaderboards, shifting to a more selective, tier-based marketing platform called Kaito Studio. This pivot reflects a broader industry reassessment of how to monetize social media without relying on incentivized posting. CookieDAO, meanwhile, faced existential challenges, with its Snaps service ceasing operations entirely.

Developers and users of InfoFi platforms are now grappling with the fallout. Many are exploring migration strategies to decentralized social networks like Bluesky and Farcaster, which offer greater autonomy according to industry reports. However, these transitions are fraught with technical and economic hurdles, including the need to rebuild user bases and secure brand partnerships. The incident has also exposed the fragility of crypto projects dependent on a single platform's API policies, prompting calls for diversified strategies.

Regulatory Trends and the Future of InfoFi

The X API ban is not an isolated event but part of a larger regulatory tightening in the crypto and social media sectors. In 2025, the EU's Markets in Crypto-Assets (MiCA) regulation and the U.S. GENIUS Act for stablecoins created a framework that prioritizes compliance, transparency, and consumer protection according to industry analysis. These policies have forced InfoFi platforms to reevaluate their business models, particularly those involving tokenized incentives.

Experts warn that the convergence of AI and financial logic in InfoFi introduces new risks, including opaque valuation systems and potential manipulation as research shows. For example, AI-generated content incentivized by tokens could lead to spam ecosystems that undermine platform integrity. To ensure long-term sustainability, InfoFi platforms must refine their incentive designs to prioritize quality over quantity and integrate transparent AI governance according to legal experts.

Long-Term Viability: Challenges and Opportunities

The long-term survival of InfoFi tokens hinges on their ability to adapt to regulatory and technological shifts. While the X API ban has dealt a blow to incentivized posting models, it has also accelerated innovation in alternative monetization strategies. Kaito's shift to Kaito Studio, for instance, demonstrates a pivot toward brand-driven, high-quality campaigns rather than mass distribution according to market analysis. Similarly, CookieDAO's restructuring highlights the need for flexibility in a rapidly changing landscape as industry reports indicate.

However, regulatory headwinds remain. The implementation of MiCA and the GENIUS Act will likely impose stricter requirements on tokenized assets, including stablecoins, which underpin many InfoFi platforms according to regulatory analysis. Non-compliance could render these tokens non-viable in regulated markets. At the same time, the rise of decentralized social networks offers a potential lifeline, though these platforms must prove their ability to scale and attract institutional adoption according to industry experts.

Conclusion: A New Era for InfoFi

The X API ban marks the end of an era for post-to-earn models, but it also signals the beginning of a more regulated and mature social media monetization ecosystem. While tokens like KAITO have faced immediate setbacks, their long-term viability will depend on their ability to align with global regulatory frameworks and innovate beyond incentivized posting. For investors, the key takeaway is clear: the future of InfoFi lies in platforms that prioritize quality, transparency, and compliance-qualities that will define the next generation of crypto-native social media.