KAITO plummets 19%: The dilemma of forced shrinkage of 25.8 million staked tokens

Platform X’s policy change has destroyed a popular sector. KAITO plummeted 19% within 24 hours, and more painfully, approximately 25.8 million KAITO tokens are currently staked. Due to the 7-day redemption waiting period, this portion of tokens has been forcibly reduced by 19%. This is not just a price fluctuation but a warning sign of a business model crisis.

Chain Reaction Triggered by X Policy Changes

Details of the Policy Impact

According to the latest news, X revised its API policy, revoking API access for InfoFi applications. These applications’ core logic is to reward users for posting on X to obtain data and traffic, with KAITO being a representative project in this sector. X officials stated that this move aims to reduce spam content and low-quality AI responses on the platform.

Immediate Market Reaction

KAITO is not an isolated case. According to relevant reports, COOKIE, a project in the same sector, also dropped 17% at the same time. This indicates that the entire InfoFi ecosystem has been hit. Market data shows that KAITO is now priced at $0.545, with a 24-hour decline of 19.70%, marking a significant adjustment.

Hidden Risks of Staking

The 25.8 million tokens locked in staking

On-chain data shows that currently, 25,798,188 KAITO tokens are staked, roughly valued at $14.16 million, distributed across 17,754 staking addresses, with an average holding of 589 tokens per address. While this number may not seem huge, the critical issue lies in the redemption mechanism.

Forced reduction due to the 7-day waiting period

KAITO’s staking redemption mechanism includes a 7-day waiting period. This means stakers cannot immediately unstake after a price drop, forcing them to endure a 19% loss. According to recent reports, this portion of tokens has been “forcibly reduced by 19%,” leaving stakers facing not only paper losses but also potential further downside risks.

This design may be acceptable in a bull market, but during a crisis, it becomes a trap for investors. Stakers cannot cut losses in time nor participate in any market rebound.

Fundamental Shake-up of Business Model

Risks of Over-Reliance on a Single Platform

KAITO’s core value proposition is to incentivize users to generate high-quality content on X, thereby gaining data and attention economy benefits. However, this model is entirely dependent on X’s platform rules. Once X changes its policies, the entire business logic collapses.

From recent information, this is not the first time KAITO has faced such shocks. Founder Yu Hu posted on X that KAITO will gradually cease YAPS and incentive-based leaderboards, and launch a new product called KAITO Studio. This shift indicates that the project team is aware of the fragility of the original model.

Rapid Decline in Market Confidence

Market confidence in KAITO is collapsing. On one hand, the price has dropped sharply; on the other, stakers are passively locked in. Many bots and arbitrageurs may be rushing to exit, further intensifying short-term downward pressure.

Future Risks Assessment

Potential Impact of Staking Unlocks

Although the current amount of staked tokens is not a very high proportion of circulating supply, once the 7-day waiting period ends, these tokens could face large-scale sell-offs. Investors might choose to exit during rebounds, creating new selling pressure.

Uncertainty of Project Pivot

Whether the launch of KAITO Studio can salvage the project’s prospects remains highly uncertain. While the founder states that the new product will be closer to traditional tiered marketing platforms, this means the project must rebuild its value proposition and business model, a process full of uncertainties.

Summary

KAITO’s sharp decline is not just a price event but an exposure of a business model crisis. X’s policy change has dismantled the core logic of the InfoFi sector, and the staking mechanism has trapped investors at a critical moment. For holders, the key question is whether KAITO Studio can truly provide new value support. In the short term, restoring market confidence will be a long process, and the selling pressure during the unlock period warrants caution. This case also reminds investors that projects overly dependent on a single platform or policy often underestimate their risks.