KAITO Token Plummets After X Bans Incentivized Posting Apps

Kaito’s Yaps program was discontinued after X banned reward-based posting apps, causing the KAITO token to drop over 20% rapidly X cited AI spam and low-quality content as reasons for API restrictions, forcing Kaito to pivot to performance-based Kaito Studio The API ban triggered sector-wide declines in InfoFi tokens like LOUD and ARBUS, underscoring the risk of platform dependency for token utility

Kaito’s Yaps program, a reward-based content incentivization model, was suspended following X’s recent API policy update, which restricts platforms from using reward-based posting mechanisms. The move led to a significant drop in the KAITO token price, with over a 20% decline recorded in a short period. X’s stated rationale includes concerns around AI spam and the proliferation of low-quality content.

The API restrictions have had a broader impact on the InfoFi sector, with other tokens such as LOUD and ARBUS also seeing double-digit declines. This highlights the inherent risks of relying on platform-specific infrastructure for token utility, as these models are vulnerable to sudden policy changes.

Kaito has announced a pivot to a performance-based model under its new initiative, Kaito Studio. This represents a strategic shift toward quality content creation aligned with global regulatory trends such as the EU's Digital Services Act and US FTC guidelines according to industry analysis.

Why Did X Target Reward-Based Posting Apps?

X’s decision to restrict reward-based posting apps is part of a broader strategy to combat spam and enhance platform user experience as reported by industry sources. The platform’s updated policies are perceived as a proactive measure against potential regulatory scrutiny over the role of social media in financial ecosystems according to market analysis. This aligns with a global trend of prioritizing authentic user engagement over incentive-driven content.

The impact on projects like Kaito underscores the challenges faced by reward-based models, which have been criticized for fostering short-term engagement at the expense of long-term content quality. Experts warn that such models inherently struggle with sustainability.

What Is Kaito’s Response to X’s Policy Changes?

Kaito’s founder, Yu Hu, has provided a detailed timeline of events leading to the decision to discontinue the Yaps program. The initial contact from X occurred on January 13, followed by a legal notice on January 14. Hu emphasized that the team chose to wait for clarification before making any public announcements, citing the need for a reasonable time context.

The shutdown of Yaps has been confirmed, while other Kaito services, including Kaito Launchpad, Kaito Pro, and Kaito Markets, remain unaffected. Looking ahead, Kaito is developing Kaito Studio as a cross-platform solution for 2026, expanding beyond X to include platforms like TikTok and YouTube.

What Are the Implications for the InfoFi Sector and Investors?

The X API ban reflects a broader trend of centralized platform control over decentralized alternatives, aligning with X’s first-party monetization strategies such as subscription services and advertising according to industry reports. This shift raises questions about the viability of reward-based models, particularly in the face of evolving regulatory scrutiny.

Investors are advised to consider the structural risks associated with platform-specific business models, which are inherently vulnerable to sudden policy changes. The sector’s total market value has already seen a significant decline, with InfoFi tokens like COOKIE and LOUD experiencing steep price drops.

The market reaction to the X API ban highlights the precarious economics of reward-based models. These models rely on speculative demand and platform-specific infrastructure, making them highly susceptible to external disruptions. For long-term viability, analysts suggest the need for diversified infrastructure and sustainable engagement strategies.

The situation underscores the importance of regulatory clarity in the InfoFi space. Without clear guidelines, projects operating in this sector face dual risks from platform bans and potential regulatory intervention. Investors must weigh these factors carefully when assessing opportunities in the space.

As Kaito transitions to Kaito Studio, the focus will be on maintaining relationships with serious brands and creators while aligning with X’s anti-spam goals. The success of this pivot will be critical in determining the long-term trajectory of the KAITO token and the broader InfoFi sector.