Crypto News: X Bans InfoFi “Post-to-Earn” Apps, Triggering Sector-Wide Selloff as KAITO Drops 20%

A sweeping policy change by X has sent shockwaves through the InfoFi sector, after the platform banned all reward-for-posting (“post-to-earn”) applications and revoked their API access, citing spam and AI-generated content abuse.The move effectively breaks the core business model of several InfoFi projects that relied on X’s API to track engagement, distribute rewards, and rank contributors — triggering sharp price declines across the sector.KAITO plunges as post-to-earn model breaksThe hardest hit was Kaito ($KAITO), a project that rewarded users for posting crypto content on X.With API access removed:Tweets can no longer be trackedEngagement cannot be verifiedRewards cannot be distributedAs a result, KAITO’s token price collapsed from $0.71 to $0.54, a 23% drop within minutes, as traders rushed to exit positions.The market reaction reflects a rapid repricing of InfoFi tokens whose utility was entirely dependent on X-based engagement incentives.InfoFi sector sees broad lossesThe fallout quickly spread beyond KAITO:$COOKIE (Cookie DAO) fell 18%The broader InfoFi sector dropped approximately 13% within hoursInvestors appear to be reassessing the long-term viability of social-platform-dependent token incentive models, particularly those relying on centralized APIs.Projects pivot as X clamps downFollowing the ban, affected projects moved swiftly to contain damage and signal strategic shifts:KaitoSuspended Yaps rewardsRemoved public leaderboardsAnnounced expansion plans beyond X, including:Kaito StudioYouTube and TikTok integrationsAI-driven content and finance use casesCookie DAOShut down SnapsCancelled all active reward campaignsPivoted focus to data analytics and enterprise tooling, branded as Cookie ProThese pivots suggest a broader transition away from pure post-to-earn mechanics toward data, analytics, and multi-platform distribution.Why X acted — and what it meansX’s decision reflects growing pressure on social platforms to curb:Spam campaignsAI-generated engagement farmingToken-driven manipulation of social signalsBy cutting off API access, X has reasserted centralized control over engagement monetization, dealing a major blow to decentralized InfoFi experiments built on top of its infrastructure.Bigger picture: InfoFi model under scrutinyThe selloff highlights a key structural risk in InfoFi:If rewards depend on a centralized platform’s API, the model is only as resilient as that platform’s policies.While some InfoFi projects may successfully evolve into analytics, media, or AI-native businesses, the X ban marks a turning point for reward-for-posting tokens, forcing the sector to rethink sustainability, decentralization, and platform risk.For now, markets are pricing in a harsher reality:No API access means no engagement rewards — and no guaranteed token demand.