Kaito Shuts Down Yaps After X Bans Reward-Based Posting Apps

Kaito, a crypto analytics platform, has announced the shutdown of its Yaps service after X implemented a policy change banning reward-based posting apps. The move follows X's revised developer API policies that prohibit financial incentives for user engagement on the platform. The policy change was aimed at curbing an increase in AI-generated content and spam, which Nikita Bier described as a major issue affecting the platform.

The decision has had immediate repercussions. The $KAITO token, associated with Kaito's platform, dropped more than 14% in the wake of the announcement, according to market data. Kaito founder Yu Hu explained that discussions with X had concluded that fully permissionless, incentive-driven models were no longer viable under the new policy. The company will replace Yaps with Kaito Studio, a more traditional creator marketing platform.

Kaito has confirmed that the shutdown of Yaps will not affect its other services, such as Kaito Pro, its API, Launchpad, or its upcoming Markets product. The $KAITO token will continue to play a role in the new model, though specific details are pending.

Why Did This Happen?

X's decision to revise its API policies was driven by the surge in low-quality content, including AI-generated spam, which Nikita Bier described as a significant issue. The policy change revoked programmatic access for apps that reward users for posting and encouraged affected developers to migrate to platforms like Threads and Bluesky.

Kaito's Yaps service had been a central part of the InfoFi model, where users earned rewards for engaging with crypto-related content. However, this system was linked to the rise of AI-generated spam, which affected the overall quality of content on X.

The blockchain investigator ZachXBT noted that the Kaito Yapper community, with 157,000 members, was banned following the policy change, which underscored the immediate enforcement of the new rules.

How Did Markets React?

The immediate market reaction was severe. The $KAITO token fell between 14% and 17% shortly after the announcement. The token was trading near $0.59 at press time, with a market cap of approximately $140 million and a fully diluted valuation of $586 million, down sharply from its $2 billion peak after the February 2025 airdrop.

Other InfoFi tokens also experienced declines. Tokens such as Cookie DAO and Loud fell 11% each in the same period, highlighting the sector's vulnerability to platform policy changes.

Kaito's decision to phase out Yaps and introduce Kaito Studio has been interpreted by some in the crypto community as a necessary evolution of the platform. The founder Yu Hu noted that the new model would focus on curated brand and creator partnerships and expand beyond X to other platforms like YouTube and TikTok.

What Are Analysts Watching Next?

Analysts are closely monitoring how Kaito's new model, Kaito Studio, will perform in the market. The platform is expected to focus on analytics, selective brand partnerships, and cross-platform distribution. The success of Kaito Studio will depend on its ability to attract high-quality creators and demonstrate clear value to blockchain companies.

Blockchain industry observers note that many platforms initially used token incentives to bootstrap communities, but sustainable models increasingly prioritize quality content over pure participation metrics. Kaito's shift is seen as a maturation process for Web3 platforms.

The broader industry is also watching how other platforms will respond to X's move. If X's policy changes lead to a decline in spam and AI-generated content, it may encourage other platforms to adopt similar measures. Analysts will be tracking the effectiveness of Kaito Studio in the coming months and the overall impact of the policy changes on the InfoFi sector.

In conclusion, Kaito's decision to shut down Yaps reflects a broader trend in the evolution of Web3 platforms. The transition to a more selective and professional model underscores the need for sustainable and high-quality content creation in the crypto space. The coming months will be critical in determining whether Kaito Studio can successfully replace the previous model and adapt to the new landscape shaped by X's policy changes.