X bans InfoFi projects; Kaito Token drops 15% after API access revocation

Source: PortaldoBitcoin Original Title: Elon Musk bans crypto projects that flood X with bots; Token drops 15% Original Link: Elon Musk is taking action against projects that try to turn user attention into digital assets on the platform, said Nikita Bier, head of product at the social network.

“We will no longer allow apps that reward users for posting on X,” he said. “This has generated a huge amount of AI slop and reply spam on the platform.”

As part of the initiative, Bier reported that X revoked API access for projects called InfoFi, arguing that the user experience on the platform “should start to improve soon” as bots realize their activity no longer generates income.

We are reviewing our API policies for developers: We will no longer allow apps that reward users for posting on X (also known as “infofi”). This has caused a tremendous amount of AI slop and reply spam on the platform. We revoked API access for these apps, so your experience on X should improve soon.

Bier’s statement also included an invitation for people whose developer accounts were terminated, offering assistance to migrate them to Threads or Bluesky, the decentralized alternative to X.

Sharp Drop in InfoFi Tokens

Kaito, a project that became synonymous with InfoFi, saw its native token plummet after the announcement. Trading around $0.58, the token’s price dropped more than 15% within 30 minutes of Bier’s statement.

Other InfoFi tokens also declined, including Cookie DAO and Loud. Digital assets fell 11% each in the same period.

Context: the “gm” controversy

X’s decision comes after controversies generated by the recurring use of the term “gm” by users — a crypto slang popularized for “good morning” (good morning) — often used as a way to engage communities.

In a later deleted post, Bier argued that Crypto Twitter was “dying by suicide, not because of the algorithm,” after industry members complained about limited reach. He pointed out the repetitive use of the term “gm” as one of the sources of low-quality content. Since then, he indicated that the treatment of X’s algorithm for posts associated with “gm” had been “fixed.”

Parallel Changes on X Related to Crypto

The transition occurs amid the advancement of other crypto-related initiatives within X. Earlier this week, the company launched “Smart Cashtags,” which allow users to specify exactly which asset they are mentioning in a post.

Separately, Kaito announced it was shutting down Yaps, a feature that allowed users to earn a tokenized score, generated by AI, based on engagement across different topics. Kaito founder Yui Hu described Yaps as something that “embodied the core ethos of Web3.”

Hu noted that Kaito had been used for marketing and awareness-building, gaining traction among users in South Korea. According to him, the company had “discussions with X,” which concluded that Yaps was not aligned “with the needs of high-quality brands, serious content creators, or X as a platform.”

Critics argued that Yaps created a pay-to-play environment on X, where users were incentivized to generate hype and repetitive comments instead of participating in real dialogue, through a process widely criticized as “attention farming.”

Crypto researcher ZachXBT classified X’s decision to remove InfoFi projects from the platform as “correct.” “Inorganic activity and fake metrics were obvious to anyone with common sense, and this made X practically unusable for everyone else,” he added.

No Payment Option

At the same time, some observers raised the possibility that InfoFi platforms could continue using X if they were willing to pay. Bier indicated that this was not an option.

“They were already paying us millions for access to the Enterprise API,” he said. “We don’t want that.”