Kaito Migrates Yaps Website to Kaito-Related Domain Amid Regulatory and Market Challenges

Kaito has begun the process of migrating the Yaps website to a Kaito-related domain, as part of broader organizational changes. The migration will involve a brief website outage, with the old domain automatically redirecting to the new one. This move aligns with the company's strategy to consolidate digital assets under its own domain structure.

X, formerly known as Twitter, has revised its API policies to restrict applications that incentivize users for posting content. This change directly affects Kaito's operations, as the Yaps platform relies on user engagement mechanisms. X product lead Nikita Bier cited concerns about AI-generated spam and content manipulation as the rationale for the policy shift.

The Kaito token experienced a significant price drop of over 10% in the days following the API policy announcement. Market analysts have attributed the decline to uncertainty around the platform's future revenue model and user engagement strategies. Kaito's market cap currently stands at approximately $140 million, with a fully diluted valuation of around $586 million.

Why Did This Happen?

X's decision to restrict incentivized posting apps reflects growing concerns over the use of automated content and spam on social media platforms. The firm cited a 'tremendous amount of AI slop & reply spam' as a key driver of the policy change. X also encouraged affected developers to transition their services to platforms like Threads and Bluesky.

Kaito's token model and business strategy were built around incentivizing user engagement on X, which has now been disrupted by the new API policies. The company founder, Yu Hu, confirmed that Yaps and incentivized leaderboards will be phased out.

How Did Markets React?

Kaito's token price dropped by approximately 14.5% in the immediate aftermath of the policy change. The decline reflects investor concerns about the sustainability of the platform's business model in light of X's new restrictions. The token has yet to recover to its peak valuation, which approached $2 billion shortly after its initial airdrop in early 2025.

Analysts suggest that Kaito's decision to shift focus toward a tier-based marketing platform may help stabilize its business model. This transition is expected to align more closely with the regulatory and platform policies of social media companies like X and others. However, the success of this pivot remains uncertain.

What Are Analysts Watching Next?

Market participants are closely monitoring Kaito's ability to adapt to X's new API restrictions. The firm has announced plans to sunset Yaps and launch Kaito Studio, a new platform that will not rely on incentivized user engagement. This shift could either mitigate the impact of X's policy or expose further vulnerabilities in Kaito's business model.

Broader market trends in the crypto sector also remain in focus. U.S. spot Bitcoin ETFs have seen significant inflows, while Ethereum and Solana ETFs have also attracted investor interest. These developments may provide context for how institutional investors view Kaito's potential transition and its long-term viability.

In the short term, Kaito's ability to retain users and generate revenue without incentivized posting remains a key area of interest for investors and analysts. The company's shift to a marketing platform could signal a broader trend in the crypto sector, where business models are increasingly shaped by platform and regulatory constraints.

Regulatory changes and platform policy shifts are likely to remain influential factors for Kaito and other crypto-native companies in the near term. Market participants will continue to track the firm's progress in adapting to these evolving conditions and assessing its potential for long-term growth.