KAITO Drops 19% After X Blocks InfoFi Apps, Token Staked Supply Enters 7-Day Unbonding Period

The KAITO token dropped nearly 19% in the last 24 hours as X enforced new API policies banning apps that reward users for posting. This decision, announced by X's product lead Nikita Bier, aims to curb AI-generated spam and improve user experience.

Kaito, a crypto platform that uses AI to index social media content and reward users with KAITO tokens, announced it will phase out its Yaps product. Yu Hu, Kaito's founder, stated the shift to a tier-based platform called Kaito Studio aligns with X's new policies.

Over 25.8 million KAITO tokens are currently staked, valued at approximately $14.16 million. With a 7-day unbonding period, this staked supply has already faced 19% forced dilution.

Why Did This Happen?

X's decision to block InfoFi apps is part of an ongoing effort to combat AI-generated spam and maintain a positive user experience. Bier cited a surge in 'AI slop & reply spam' as a key driver of the policy change.

The new API policies prohibit financial incentives for content creation on the platform. Bier encouraged affected developers to transition to alternatives like Threads and Bluesky.

How Did Markets React?

The KAITO token fell to $0.56 from $0.70, reflecting a nearly 20% decline. This sell-off extended to Kaito Genesis NFTs (Yapybaras), where floor prices dropped over 50% to 0.21 ETH.

Other InfoFi tokens also saw declines: COOKIE fell 15%, LOUD dropped 16%, and ARBUS slid about 9%. The broader InfoFi crypto market cap dropped 13% in 24 hours to $359.5 million.

What Are Analysts Watching Next?

Crypto analysts are monitoring the 7-day unbonding period for potential selling pressure. With nearly 25.8 million tokens staked, a large volume of KAITO could enter the market once the period ends.

The Kaito team is expected to unveil more details about Kaito Studio, a tier-based marketing platform designed to replace Yaps and incentivized leaderboards. The new model will focus on brand-creator partnerships and cross-platform distribution.

The broader implications of X’s policy shift are also under scrutiny. Analysts are assessing whether similar measures could emerge on other social media platforms, impacting the InfoFi ecosystem.