Key Highlights
- X has banned apps that pay users for posting, revoking API access for InfoFi projects to reduce spam and AI-generated content.
- Kaito AI’s token dropped 15% and its linked NFT collection fell over 50% after the announcement.
- Affected developers can get support to move their apps to Meta’s Threads or Bluesky.
Elon Musk’s X is taking action against apps that pay users for posting with digital tokens, Head of Product Nikita Bier said on Thursday.
The change affects InfoFi projects, which turn user activity into money-making opportunities. In a post, Bier explained that these apps caused “a tremendous amount of AI slop [and] reply spam on the platform.” X has taken away API access for these projects. He said the goal is to make the platform better for regular users and that their experience “should start improving soon” as bots can no longer earn money from posting.
Developers affected by the ban can get support to move their apps to other platforms, including Meta’s Threads or Bluesky, a decentralized alternative that gained users after Musk bought Twitter in 2022. Meanwhile, his move hits projects like Kaito AI, which became popular after launching last February.
“We are revising our developer API policies: We will no longer allow apps that reward users for posting on X (aka ‘infofi’). This has led to a tremendous amount of AI slop & reply spam on the platform. We have revoked API access from these apps, so your X experience should…” Bier shared the news on X.
Kaito Token and NFT prices drop sharply following the news
Shortly after the announcement, Kaito’s token price fell by 15% from an intraday high of $0.7 to $0.56. The token’s market capitalization has also dropped by 15% to $138 million, according to CoinMarketCap. Meanwhile, trading activity is up by 111$, however, the drop suggest that this mostly involves traders selling the token.
The decline also affected the Yapybaras NFT collection linked to Kaito, which lost over 50% of its floor price, falling to 0.21 ETH on OpenSea. Bier said developers whose accounts were cut off could get help moving to other platforms like Meta’s Threads or Bluesky, a decentralized social network that grew in popularity after Musk bought Twitter in 2022.
New Features and Developer Support
The decision comes as X continues other crypto initiatives. The company recently introduced Smart Cashtags, which link ticker symbols to real-time financial data. Tapping a Smart Cashtag shows live prices, charts, and posts mentioning the asset.
Meanwhile, Kaito announced it is sunsetting Yaps, a feature that rewarded users with tokenized scores for engagement. Kaito founder Yui Hu said Yaps “embodied the core Web3 ethos” but admitted it did not fit “the needs of high-quality brands, serious content creators, or X as a platform.” Critics said Yaps encouraged “attention farming,” where users made repetitive posts to earn rewards.
InfoFi apps give rewards for posting, which makes both real users and bots post a lot. Kaito AI became a main example of InfoFi. However, X’s new rules show how changes on a social platform can quickly affect crypto tokens and NFT markets. The company is trying to reduce spam and AI content while helping developers move to other networks.
Also Read: U.S Crypto Market Bill Faces Delays Amid Lawmaker Disagreements
