Ecosystem reshuffle after access denial — X fully cracks down on low-quality content, and the InfoFi model faces a dead end

Recently, the crypto Twitter circle (CT) experienced a sudden policy shakeup. The X platform (formerly Twitter) completely halted the operation of InfoFi applications by denying API access. This move abruptly ended the once-popular “post and mine” model. As access rights were revoked, projects relying on this incentive mechanism faced a forced transition dilemma.

X’s Policy Sanctions: Refusing Million-Dollar API Fees and Decisively Clearing Spam Messages

This action from X was driven by explicit directives from senior management. Platform product lead and Solana ecosystem advisor Nikita Bier officially announced that X is revising its developer API policies to explicitly prohibit applications that primarily reward users for posting content. This ban directly targets applications like InfoFi that perform high-frequency API calls.

Nikita’s statement hits the core issue—such incentive models are the root cause of the platform being flooded with AI-generated spam messages and invalid responses. X has decisively revoked these applications’ access rights, believing that once bots realize they can’t profit from posting, user experience will improve rapidly.

What is even more notable is X’s firm stance on this decision. Even though applications like InfoFi have contributed millions of dollars in API fees to X’s enterprise API access, Nikita unhesitatingly gave up this revenue, clearly stating, “We don’t want this money.” This demonstrates that prioritizing platform user experience outweighs short-term commercial gains—after all, these API fees account for a tiny fraction of X’s overall annual revenue.

This also officially marks the end of the simple incentive models parasitizing the X ecosystem. The era of profiting just by posting tweets is gone for good.

Ecosystem Projects Rapidly Shift, KAITO and Other Tokens Face Selling Pressure

With access cut off, the InfoFi ecosystem faces unprecedented impact. The most immediate manifestation is a sharp market decline—tokens like KAITO are under significant pressure following the policy shock. According to the latest data, KAITO is currently priced at $0.43, down 1.20% in 24 hours, with a circulating market cap of $104.81M.

In the face of life-and-death challenges, multiple project teams have been forced to make tough choices. As a representative project in the InfoFi sector, Kaito founder Yu Hu announced that the company will gradually terminate the Yaps incentive leaderboard system and instead launch a new Kaito Studio. This strategic shift stems from long-standing issues with low-quality content, spam flooding, and the broader industry trend moving from high-frequency global distribution to targeted marketing.

After discussions with X, Kaito reached a consensus—completely open distribution systems are a thing of the past, neither meeting top-tier brand needs nor aligning with serious content creators’ expectations. The new Kaito Studio will adopt a layered traditional marketing approach, connecting brands with high-quality creators through advanced analytics tools, covering platforms like X, YouTube, TikTok, and even expanding into finance and AI sectors.

Meanwhile, Cookie DAO has made a similar decision. The platform announced it will immediately shut down the Snaps creator activity platform and await clear guidance from X. Due to complex issues involving paid fees and promised rewards, Cookie DAO commits to fair negotiations with each project directly, while archiving all active activities. However, other products under Cookie remain unaffected; the platform continues developing the crypto real-time market intelligence tool Cookie Pro, expected to launch in Q1 this year.

From the project teams’ responses, this policy adjustment does not seem to be a sudden black swan event; the teams appear to have anticipated the trend change and preemptively prepared. This has sparked widespread community suspicion—whether project teams had prior knowledge of negative news and engaged in dump operations.

For example, Kaito’s multi-signature wallet recently transferred 24 million KAITO tokens (~$13.31 million) in batches to 5 addresses(. Monitoring by crypto influencer “vasucrypto” shows that wallets associated with the Kaito team transferred 5 million KAITO to Binance in recent days, suspected of market dumping. Even more concerning, Kaito’s staking unlocks peaked at this time, with 1.1 million KAITO tokens scheduled to be unlocked soon. The coincidence of these timing points has intensified community suspicions of insider trading.

From Incentive Mechanisms to Gray Market Hotbeds, How Did InfoFi Reach Today

What kind of evolution has the InfoFi model undergone from its initial idealistic vision to the current ecosystem crisis?

The core idea of InfoFi was to incentivize creators to produce high-quality content through token rewards—this concept itself was not problematic and once shined brightly. However, the ideal model was quickly distorted in practice. Many profit-seekers, aiming to maximize rewards, began recklessly generating low-quality and repetitive spam messages, turning the original content incentive mechanism into a tool for gray-market activities. This distortion not only destroyed content quality but also accelerated the loss of genuine users.

Nikita’s criticism of the crypto Twitter ecosystem had already been foreshadowed. He previously pointed out that the prevalent notion in the CT circle—“replying hundreds of times daily to grow your account”—is itself a perversion. Since ordinary users only browse 20-30 tweets per day, and the platform cannot display all content from a user to all followers, influence is dispersed across countless low-quality, repetitive posts, resulting in only a few projects gaining exposure. This behavior pattern leads to a “self-destructive decline” of crypto content; the problem isn’t the algorithm itself but the twisted incentive mechanisms of participants.

This tweet triggered strong backlash within the crypto community, even escalating into a large-scale “GM)Good morning(” counterattack, ultimately leading to the tweet’s deletion. From today’s perspective, X’s crackdown has been brewing for a long time.

Platform Governance Dilemma and Future Pathways

For X, heavily reliant on advertising revenue and subscriptions, external pressures such as slowing user growth, low monetization efficiency, and rising competitors are intensifying. Under these strategic considerations, improving content quality and user experience has become an inevitable survival choice. Over the past months, X has implemented a series of reforms in content distribution and algorithm weighting, aiming to increase the proportion of revenue for high-quality creators.

From this perspective, X’s true target isn’t solely the InfoFi model but all those that severely dilute platform value and drive away genuine users—these are the real culprits behind the proliferation of spam and low-quality content. To some extent, this represents a “belated content justice.” For CT users fed up with spam, this cleanup acts like a “noise filter,” finally allowing the timeline to breathe.

It should be noted that the decline in CT’s popularity isn’t solely due to the InfoFi model. The overall cyclical downturn of the crypto industry also plays a significant role—crypto content views on YouTube have fallen to their lowest levels since January 2021.

Nevertheless, the end of the InfoFi model marks a necessary step toward restoring rationality in the crypto content ecosystem. For projects relying on Web2 giants’ traffic, once this shortcut is cut off, establishing a truly value-driven decentralized social finance )SocialFi( mechanism becomes an urgent challenge. This tests not only the project’s innovation capacity but also whether the entire ecosystem can build a sustainable business model.