KAITO Token Plummets After X Bans Incentivized Posting Apps

• Kaito’s Yaps program, a core driver of engagement, was discontinued after X banned reward-based posting apps, leading to a significant drop in the KAITO token price.
• The KAITO token fell more than 20% in hours following the API policy change, with losses attributed to the removal of token utility and user base according to analysis.
• Kaito has announced it will replace Yaps with a performance-based platform called Kaito Studio to adapt to the new API restrictions as reported.

Kaito’s Yaps program was integral to the KAITO token’s value proposition, incentivizing users to post and interact on X in exchange for tokens according to Bitget. The program’s discontinuation followed a sudden policy change by X, which cited a rise in AI-generated spam and low-quality content as the primary reason for revoking API access as detailed. The decision forced Kaito to shut down incentivized features like Yaps and pivot to a more selective, performance-based model as confirmed.

The market reacted swiftly, with the KAITO token dropping nearly 24% in a 24-hour period according to reports. Analysts suggest that the token’s utility had been heavily tied to X’s platform and that the loss of this engagement driver has exacerbated selling pressure as analysts note.

What Caused the API Ban and How Is Kaito Responding?

X cited increased spam and AI-generated content as reasons for banning reward-based posting models according to sources. The move aligns with broader trends among social media platforms to prioritize authentic engagement over incentivized activity as observed. Kaito has confirmed it will discontinue Yaps and launch Kaito Studio, a tier-based platform designed to foster quality brand-creator partnerships as announced.

Kaito’s new platform aims to adapt to X’s new API rules by shifting away from open incentive systems toward a curated, performance-based model according to reports. The company has also indicated it will expand beyond X to other platforms like YouTube and TikTok as reported.

What Are the Implications for the InfoFi Sector and Kaito’s Token?

The KAITO token’s decline reflects broader challenges for InfoFi projects, many of which rely heavily on third-party social media APIs for user engagement and distribution according to Bitget. The token’s loss of utility has intensified selling pressure, and some analysts warn that reward-based models are inherently unsustainable due to quality degradation over time as analysts warn.

Kaito is not the only project affected. Other InfoFi tokens like LOUD and ARBUS also experienced double-digit declines following the API ban according to reports. The shift underscores the vulnerability of projects that depend on platform-specific infrastructure for user growth and token utility as noted.

What Is the Long-Term Outlook for InfoFi Tokens and Kaito’s Strategy?

Experts caution that the InfoFi model faces significant risks, including regulatory scrutiny and platform governance shifts as reported. The U.S. SEC has shown increased interest in digital asset infrastructure, and future policies may further limit the viability of reward-based social engagement models according to analysis.

Kaito’s pivot to Kaito Studio suggests a broader industry shift toward quality over quantity in content creation as observed. However, the token’s future value will depend on the success of the new platform and the ability to sustain engagement without relying on X’s API according to reports.

Investors are advised to consider the risks associated with platform-specific models, particularly those with limited regulatory clarity and token utility as advised. The X API ban serves as a cautionary signal for the InfoFi sector, highlighting the need for diversified infrastructure and regulatory compliance as noted.