X bans InfoFi, how will KAITO respond to this ecosystem crisis

KAITO tokens plummeted 18.95% within 24 hours, dropping from $0.74 to $0.54, with a market cap evaporating over $30 million. This is not an isolated price fluctuation but an industry-wide shock triggered by policy changes on the X platform. Similarly, COOKIE tokens, which also rely on X, fell over 17%, as the market is re-pricing this once-hot InfoFi track.

Direct Impact of X Policy Changes

Policy Content and Reasons

X platform product lead Nikita Bier announced on January 15th that X will revise its developer API policy, officially banning any applications that reward users for posting from obtaining API access. This policy targets so-called “InfoFi” applications, which incentivize users to post on X to gather social data and user engagement.

The reason for X’s decision is straightforward: the platform is flooded with大量AI垃圾信息和回复垃圾。When applications encourage posting through incentive mechanisms, it inevitably leads to an influx of low-quality content. X has decided to cut off these applications’ data access at the source.

KAITO’s core business is fundamentally undermined

KAITO is a typical example of such applications. As a social and AI-driven crypto asset information platform, KAITO’s core features include Yaps (posting incentives), incentive leaderboards, and Yapper creator rankings. These functions operate on the logic of attracting users to post on X through token incentives, then collecting and analyzing this data.

The revocation of API access means KAITO can no longer obtain real-time data from X, and its existing incentive mechanisms are rendered ineffective. This is not a functional issue but a fundamental collapse of the business model.

Forced Strategic Adjustment

New Direction: Kaito Studio

Faced with this crisis, KAITO founder Yu Hu announced on January 15th a response plan: gradually cease Yaps and incentive leaderboards, and launch Kaito Studio as a replacement.

The positioning of this new platform has fundamentally changed. The original model was a permissionless distribution system where any project could attract creators through incentives. The new Kaito Studio is closer to a traditional tiered marketing platform, where brands need to selectively collaborate with creators based on established standards and clear project scopes.

This is a passive compromise. While it helps KAITO comply with X’s policy requirements, it also means:

• Losing the original permissionless, open competition advantage
• Creator participation may significantly decline
• Project costs and entry barriers increase
• Ecosystem incentive mechanisms face structural restructuring

Multiple Pressures Accumulating

In addition to policy shocks and business adjustments, KAITO faces other pressures:

Token Unlock Liquidity Pressure

On January 20th, approximately 2.86 million tokens will be unlocked, worth about $1.8 million. In the context of current market sentiment being subdued, large-scale unlocking usually exacerbates selling pressure. The market may have already priced in this risk in advance.

Rapid Market Sentiment Shift

According to the latest news, KAITO ranks 235th in the cryptocurrency market cap list, with only 24.14% of the total supply circulating. This means a large portion of tokens are still locked, and subsequent unlock waves could continue to pressure the price.

Industry-Wide Signal

KAITO’s experience is not an isolated case. Similar policy changes have also impacted other InfoFi projects like COOKIE. This indicates that the once-hot InfoFi track is undergoing a fundamental adjustment.

Market data shows that KAITO has fallen 2.03% over the past week and only risen 1.03% over the past month. This suggests that even before the policy impact, the project’s growth momentum was already waning.

Summary

KAITO’s 18.95% plunge is a result of X’s policy change, business model adjustments, and shifting market sentiment. In the short term, policy shocks and token unlocks will continue to exert pressure. In the medium term, whether Kaito Studio can find a sustainable business model is crucial. In the long term, the InfoFi track itself needs to rethink how to balance platform policies and user experience.

For investors, this is a window to observe KAITO’s team’s execution and strategic adjustment capabilities. Whether the new platform can attract enough brands and creators will directly determine the project’s future trajectory.