Information Blockade: How Did X Restrictions Affect Kaito and InfoFi?

On January 15, 2026, the platform X (formerly Twitter) banned apps that reward users for publishing content under its updated anti-spam policy. The decision was announced by X’s head of product, Nikita Bier. 

According to him, the company will no longer allow services to pay users for posting on the social network — a practice he referred to as InfoFi. Bier noted that such mechanics led to a sharp increase in AI-generated content and reply spam. 

As part of the changes, X revoked API access for the relevant apps, effectively disconnecting them from the platform. He also added that the user experience should improve “when the bots realize they are no longer being paid.”

The restrictions affected projects in the InfoFi (information finance) segment — platforms that monetize attention and activity on social media. Under such models, users receive tokens, points, or other forms of rewards for creating content and engaging with it. Essentially, InfoFi turns audience attention into a tradable asset.

In 2025, Post-to-Earn projects became widespread in the community, but they faced criticism throughout the period. Skeptics pointed out that a focus on rewards incentivizes an increase in the number of posts at the expense of their quality, and contributes to a rise in bots and low-quality content.

Among the best-known projects in the sector are Kaito with its Yaps product and Cookie DAO with its Snaps platform. Both rewarded participants for activity on X, which quickly led to “farming” metrics. Users began resorting to neural networks to generate repetitive replies and comments.

X’s new policy effectively undermines the very foundation of how InfoFi applications operate, as they need the platform’s API to automatically track posts and engagement. They recorded posts and replies, measured reach through likes and reposts, built rankings, and used them to calculate rewards.

Importantly, reliance on the X API went beyond direct payouts for posting. A number of InfoFi services, such as cookie.fun, used the social network as a data source — for trend analysis, narrative monitoring, sentiment assessment, and automated publication of analytical content. 

Soon after Beer’s statement, the Kaito team announced the shutdown of Yaps, calling it a forced decision under the new conditions, and introduced a new product — Kaito Studio. Cookie DAO, in turn, reported that it was disabling the Snaps platform and halting all campaigns under which authors were paid for content.

Smaller-scale InfoFi projects also paused campaigns and reward accruals without detailed statements, effectively putting their products “on pause” while awaiting clarification of further terms.

However, given that InfoFi app developers were explicitly advised to consider migrating to alternative platforms such as Threads or Bluesky, X does not plan to revisit its decision.

The blocking of InfoFi apps quickly affected their related tokens and called the sustainability of their business models into question. Investors began exiting instruments whose value was directly tied to activity on X.

At the time of writing, the KAITO token fell by 20% — from around $0.70 to $0.56. COOKIE dropped by 15%, sliding from about $0.045 to $0.038.

Less liquid assets were also caught in the sell-off, which intensified investors’ bearish sentiment. As a result, the InfoFi sector faced a large-scale repricing. Over the past day as of the time of writing, the total market capitalization of projects in this segment fell by more than 10% — to around $360 million. 

It is also worth noting that a week before Beer’s announcement, more than 1 million KAITO was withdrawn from staking — 20–30 times higher than usual volumes. Given that the unbonding period is about seven days, some users suggested that asset holders may have known in advance about X’s policy change.

For InfoFi platforms, what happened was a blow. After the API was disabled, key products were effectively paralyzed, and along with them, the incentives to participate disappeared. In essence, projects like Kaito and Cookie lost their main source of traffic and engagement.

Users also felt the consequences. For many, InfoFi campaigns were a source of income, if not primary then additional. There is no exact data on earnings, but according to some estimates, the most active participants could earn up to several tens of thousands of dollars per month. Now these payouts have stopped.

In addition, starting in spring 2025, Kaito ran the Yapper Payouts campaign, distributing $5,000 in its own tokens each week among active users.

Additional complications are created by announced but unpaid rewards. In a statement, Cookie DAO notes that some campaigns were paid in advance, and the team is looking for ways to properly close out its obligations to participants. Many other platforms have likely faced similar issues.

In the community, X’s decision to turn support for InfoFi sparked a noticeable response, but reactions were mixed.

Supporters of X’s hard-line approach generally welcomed the changes. In their view, the platform is getting rid of a massive stream of low-quality content generated solely for rewards. 

For example, an X user with the handle BawsaXBT called what is happening “the end of InfoFi,” noting that the model incentivized AI spam rather than quality discussions.

They also believe that canceling engagement payouts is a “cleansing” of the platform and a way to restore content quality.

Criticism of X’s policy focused on two main aspects:

• first — a blow to good-faith creators for whom payouts were a source of income. Along with bots and spam, real users who created high-quality content within the rules were hurt;
• second, it is a structural risk for Web3 projects dependent on centralized platforms. X’s restrictions demonstrate the vulnerability of business models built on centralized APIs.

It is also worth adding that the decision was made unilaterally and without a transition period, which gave teams no time to adapt their products.

However, the developers of the affected projects took a pragmatic stance. Instead of open confrontation with X, they focused on minimizing damage and finding new directions for development. 

Kaito founder Yu Hu said that the team had been in dialogue with X and was preparing for a change in terms. As noted earlier, he announced the end of the Yaps era and the launch of a new direction — Kaito Studio. He also announced plans to expand beyond X — to YouTube, TikTok, and other platforms — shifting the focus to a broader audience.

Cookie DAO chose a similar vector. In the previously mentioned announcement, the team said it had canceled all rewards and was beginning to reformat the service into an analytics and B2B product, Cookie Pro. 

One way or another, all market participants will have to adapt to the new format of relations between Web3 projects and centralized platforms. And everyone is doing it in their own way.

In the coming weeks, the consequences of the ban will be felt by all sides — X users, teams behind former InfoFi products, and the crypto community as a whole.

For the latter, the most noticeable effect on X may be a reduction in “noise” in replies and discussions. In addition, in the short term, this will likely lead to a decrease in the volume of content related to digital assets, since a significant share of it was previously generated for incentives. However, some users expect a proportional increase in the quality of posts.

For participants who earned money from InfoFi campaigns, the short-term outlook looks less favorable. They will have to look for alternatives, for example, returning to participating in airdrops. 

As for projects, in theory, some of them could migrate to Threads or Bluesky, which X itself mentioned as alternatives. However, a quick transfer of the model is unlikely — the audience and mechanics are different, and other platforms may also tighten their anti-spam policies. Therefore, in the near term, former Yaps and Snaps participants will most likely be left without rewards.

At the same time, the situation could boost interest in SocialFi and decentralized platforms, including Zora, Farcaster, and others. Their audiences are still noticeably smaller, but the API ban case once again revives the old thesis that Web3 applications should not be built on centralized infrastructure.

One way or another, the largest InfoFi projects have already outlined the directions of their restructuring, and in the near future we may see the first results of this transformation.