The Platform Risk Exposure in InfoFi Tokens: A Cautionary Tale for Decentralized Engagement Models

The emergence of InfoFi-short for information finance-has redefined how attention, data, and content are monetized in the Web3 ecosystem. By leveraging AI and blockchain, InfoFi projects aim to decentralize value distribution, enabling creators and users to earn from their contributions. However, beneath this innovative veneur lies a critical vulnerability: the structural reliance on centralized infrastructure. From social media platforms to custodial exchanges, these dependencies expose InfoFi tokens to systemic risks that could undermine their long-term viability.

Centralized Dependencies: A Double-Edged Sword

InfoFi projects like Kaito and Cookie.fun thrive on decentralized principles but remain tethered to centralized systems. For instance, Kaito's AI-driven content evaluation model depends on X's (formerly Twitter) API for user engagement metrics. When X abruptly banned InfoFi projects in 2025, the KAITO token plummeted 20% in a single day, exposing the fragility of such dependencies. This incident underscores a broader truth: even projects designed to disrupt centralized platforms often inherit their vulnerabilities.

Centralized cryptocurrency exchanges (CEXs) further amplify these risks. The Bybit hack in February 2025, which resulted in a $1.5 billion theft via compromised employee credentials, highlights the custodial model's inherent flaws. For InfoFi tokens, which often rely on CEXs for liquidity, such breaches can trigger cascading losses. As noted by TokenMetrics, custodial models create single points of failure where security lapses or insolvency directly impact user funds.

Governance and Tokenomics: The Illusion of Decentralization

Governance flaws in InfoFi projects often mirror those of traditional blockchain ecosystems. Arbitrum, for example, faced scrutiny over its sequencer's centralized operation and token-based governance model, which could enable hostile takeovers if a single entity accumulates majority tokens. Similarly, Kaito's token dump scandal in 2025 revealed how centralized information control-such as insider trading by team members-can erode trust in supposedly decentralized systems.

Tokenomics also plays a pivotal role in sustainability. Poorly structured models, like those with excessive token concentration or unclear utility, risk economic instability. The collapse of high FDV (fully diluted valuation) tokens in 2025 demonstrated how speculative tokenomics fail to withstand institutional-grade scrutiny. For InfoFi projects, aligning token utility with real-world value creation-rather than speculative hype-is critical to long-term success.

Technical Vulnerabilities: Beyond Smart Contracts

While smart contract bugs remain a well-documented risk, InfoFi projects face additional technical challenges. Access control vulnerabilities, such as the 88mph Function Initialization Bug, have caused $953.2 million in damages since 2024. Price oracle manipulation and logic errors further destabilize protocols, as seen in the SIR.trading DeFi protocol attack in March 2025. These issues are compounded by the integration of AI-driven tools, which introduce new risks around trust and liability.

Case Studies: Lessons from the Frontlines

1. Kaito's Token Dump Scandal: Allegations of insider trading by Kaito team members before service termination exposed the risks of centralized information asymmetry.
2. Bybit's 2025 Hack: The theft of $1.5 billion via compromised credentials highlighted the custodial model's susceptibility to human-layer attacks.
3. X's API Policy Overhaul: The platform's ban on reward-based content applications directly triggered the collapse of projects like CookieDAO, illustrating how policy shifts can invalidate entire business models.

Conclusion: Mitigating Risk in a Centralized World

For investors, the takeaway is clear: InfoFi tokens are not immune to the risks of centralized infrastructure. Diversification, rigorous due diligence, and a focus on projects with hybrid governance models (e.g., decentralized autonomous organizations with multi-party computation safeguards) can mitigate exposure. Developers, meanwhile, must prioritize technical audits, formal verification, and decentralized execution frameworks to reduce reliance on centralized systems.

In an era where attention is currency, the InfoFi revolution remains a work in progress. But as history shows, the most resilient innovations are those that learn from their vulnerabilities-and adapt accordingly.