The X platform's revised policy prohibits the InfoFi rewards mechanism, Kaito announces the elimination of Yaps, the KAITO token price falls by about 17%, and the crypto market is re-evaluating the InfoFi model.
At the beginning of 2026, a focal event at the intersection of cryptocurrency and social platforms is rapidly brewing: social platform X (formerly Twitter) has tightened its regulatory policies on InfoFi rewards applications and prohibits stimulating content dissemination through rewarding user interactions.
The so-called InfoFi (Information Finance) model is an economic model based on blockchain incentive mechanisms that directly links users’ social behaviors (such as posting, sharing, commenting, etc.) to crypto rewards. This model has gained attention in decentralized communities, but in recent years, it has also raised concerns about content quality and platform abuse.
X platform disables rewards mechanism and changes API policy
The new policy announced by Nikita Bier, the product manager of platform X, clearly states that any applications rewarding users for posting content will no longer be allowed to participate in the platform ecosystem, and API access for such applications will be revoked. The official explanation is that this mechanism has led to a large amount of AI-generated “spam content” and low-quality interactions, affecting the genuine experience of users.
This policy change has directly impacted the core logic of InfoFi, especially for decentralized projects that rely on the platform’s API.
Kaito eliminates Yaps and its market impact
As one of the representative projects of the InfoFi model, Kaito quickly responded to this change by announcing the gradual phase-out of its core rewards product “Yaps.” Yaps served as a user interaction Token rewards mechanism, promoting user-generated content and driving community engagement.
After the news was released, the market expressed doubts about Kaito’s future model, and its native token KAITO fell by about 15-17% in a short period. Market data shows that the price of KAITO quickly dropped from around $0.70 to approximately the $0.56-$0.59 range.
This fall reflects investors’ reassessment of the risks after the regulatory crackdown on the InfoFi rewards model, and also indicates that projects relying on a single platform operating model are more susceptible to policy impacts.
The regulatory game of InfoFi’s incentive model
InfoFi was designed to drive community content production through economic incentives, but in practical operation, its rewards mechanism is easily exploited by automated bots, leading to a large amount of low-quality interaction. The policy adjustments of platform X signify that regulators and platform governors are attempting to balance the relationship between decentralized innovation and a genuine content ecosystem.
Market data shows that with the release of the X platform policy, not only Kaito, but also other InfoFi model token assets have experienced a certain degree of selling pressure and fall, raising questions in the industry about the sustainability of this emerging model.
Kaito’s strategic transformation: moving towards a specialized content platform
Facing regulatory and market pressures, Kaito is transitioning from a purely rewards-driven model. The official announcement presents a new strategy, including Kaito Studio, that leans towards professional content creation, brand collaboration, and cross-platform marketing, rather than relying solely on the rewards mechanism to drive user interaction.
This transformation represents a shift in the InfoFi model from “earning rewards” to “value creation”, with a greater focus on content quality and community building. This may be a positive signal for Kaito’s long-term ecosystem, but in the short term, market prices are still affected by fluctuations.
Market Observation and Future Trends
It can be seen from this event:
- Decentralized projects must pay more attention to compliance and platform policy risks.
- The single incentive mechanism is easily impacted when facing regulatory pressure;
- The market is gradually leaning towards valuing value-driven content and long-term ecological construction.
For holders and industry observers, understanding the limitations of the InfoFi model and regulatory dynamics will help to more rationally assess the future investment and development potential of such projects.
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.
