X Revokes API Access, Kaito Token Declines Significantly

TLDR

• Kaito token dropped from $0.70 to $0.56, a 14-20% decline.
• X’s policy aims to reduce AI-generated spam and low-quality content.
• InfoFi sector’s market cap decreased by 11%, now at $367 million.

X, previously known as Twitter, has revoked API access for InfoFi applications that reward users for content posting. This decision has led to the Kaito token’s decline, affected by X’s efforts to combat AI-generated spam and low-quality responses. Information was disclosed by Nikita Bier, X’s Head of Product.

The policy change directly impacted Kaito, a key player in the InfoFi project heavily reliant on X for user interaction and rewards. The Kaito token dropped significantly, showcasing the immediate financial impact on the project.

Bier’s Announcement and Recommendations

Bier announced the policy shift, which aims to decrease what he termed as “AI slop and reply spam.” He advised developers to consider transitioning to other platforms like Threads or Bluesky. This guidance comes amid concerns over content quality on X.

No previous roles for Bier in related industries are specified in available data, although he currently holds a key leadership role at X.

Kaito’s Strategic Shift Following the Ban

Kaito’s founder, Yu Hu, addressed the change by signaling the end of Kaito’s Yaps program. Hu stated, “After discussions with X, it’s agreed that a fully permissionless distribution system is no longer viable.” He elaborated on a new direction towards Kaito Studio, a tier-based marketing platform.

There were no details on previous professional positions for Hu in primary announcements. The scope of statements from relevant figures is limited to Bier’s and Hu’s public posts on X, with no updates from official Kaito websites or government platforms.

Financial Impact on InfoFi Tokens

The Kaito token fell from $0.70 to $0.56, marking a 14-20% decline. Cookie DAO (COOKIE) also experienced a significant drop of over 13%, coming to $0.038. These changes contributed to an 11% drop in the InfoFi sector’s market cap, now at $367 million.

On-chain data reflects a heightened distribution and volume spikes in Kaito, with no Total Value Locked (TVL) changes, liquidity shifts, or staking flows reported. The financial implications are substantial for the InfoFi space, with Kaito being a prominent figure.

Wider Cryptocurrency Landscape Remains Steady

The impact was localized within the InfoFi tokens without direct consequences on major cryptocurrencies like Ethereum (ETH) and Bitcoin (BTC). Other unrelated altcoins were also unaffected in this instance.

There have been no comparable past events affecting the sector, demonstrating a distinct pressure on InfoFi tokens without ripple effects into broader cryptocurrency categories such as governance or decentralized finance (DeFi).