Policy Changes Target User Rewards for Posting
Elon Musk's X platform is revising its developer API policies to prohibit applications like Information Finance (InfoFi) that reward users for posting content. Nikita Bier, X's product head, announced on January 15th that API access has been revoked from these applications. Bier stated that once bots realize they are no longer being paid, the user experience on the social media platform should begin to improve.
Bier emphasized that projects such as InfoFi have contributed to a "tremendous amount of AI slop & reply spam on the platform." In a statement, Bier added, "If your developer account was terminated, please reach out and we will assist in transitioning your business to Threads and Bluesky."
Billy Markus, the founder of Dogecoin (DOGE), concurred that incentivizing spam is not a sustainable business model. Popular on-chain sleuth ZachXBT described the move as "based."
David Choukroun, founder of The Web3 Collective, commented that since X does not compensate creators comparably to other platforms, individuals like him attempt to earn through alternative means, such as InfoFi. Choukroun urged Bier to reconsider the decision, asserting that creators are not bots.
Popular InfoFi Token Experiences Significant Drop
InfoFi is a crypto concept that translates financial information and user engagement into monetary value. One notable InfoFi project is Kaito, an AI-powered search engine designed specifically for the crypto space. Kaito indexes information from social media platforms to distinguish valuable insights from general chatter, rewarding users for contributing quality information.
Following Bier's announcement on X, the native token of the Kaito project, KAITO, saw a significant decline, falling from $0.7011 to $0.5671. The KAITO token tanked by 20%. In response to the market reaction and platform changes, Kaito founder Yu Hu announced the sunsetting of Yaps and incentivized leaderboards, introducing Kaito Studio as a replacement.
Hu acknowledged the issues of low quality and persistent spam within the crypto space, coinciding with platform-wide algorithm changes on X and the emergence of other InfoFi projects. Hu stated, "After discussions with X, it’s agreed that a fully permissionless distribution system is no longer viable, nor aligned with the needs of high-quality brands, serious content creators, or X as a platform." Hu assured users that Kaito Studio will operate more akin to a tiered, traditional marketing platform.