Summary of Key Developments
- •The Kaito token experienced a decline from $0.70 to $0.56, representing a 14-20% decrease.
- •X (formerly Twitter) has implemented a new policy intended to reduce AI-generated spam and low-quality content.
- •The market capitalization of the InfoFi sector has decreased by 11%, currently standing at $367 million.
X, the social media platform formerly known as Twitter, has ceased API access for Information Finance (InfoFi) applications that reward users for posting content. This policy adjustment has directly contributed to a notable decline in the Kaito token's value. The move by X is part of a broader initiative to combat AI-generated spam and improve the overall quality of content on the platform, as disclosed by Nikita Bier, X's Head of Product.
The policy change has had a significant and immediate effect on Kaito, which is a prominent project within the InfoFi sector and has relied heavily on X for user engagement and reward distribution. The subsequent drop in the Kaito token's price underscores the financial repercussions for projects dependent on the platform's API access.
X's Product Head Outlines New Policy and Recommendations
Nikita Bier announced the new policy, stating its objective is to reduce what he described as "AI slop and reply spam." He further recommended that developers explore alternative platforms such as Threads or Bluesky for their applications. These recommendations come in response to growing concerns about the proliferation of low-quality and potentially automated content on X.
Information regarding Nikita Bier's prior professional roles in related industries is not readily available, though he currently holds a significant leadership position at X.
Kaito Adjusts Strategy in Response to API Restriction
Yu Hu, the founder of Kaito, addressed the policy change by announcing the discontinuation of Kaito's Yaps program. Hu indicated that, following discussions with X, it has been agreed that a completely permissionless distribution system is no longer feasible. He further detailed plans for Kaito to pivot towards Kaito Studio, a marketing platform structured with different tiers.
Specific details concerning Yu Hu's previous professional positions were not included in the initial announcements. The extent of public statements from key individuals is presently limited to Bier's and Hu's social media posts on X, with no additional updates available from official Kaito websites or governmental platforms.
Financial Ramifications for InfoFi Tokens
The Kaito token saw a significant price drop, falling from $0.70 to $0.56, a decrease of 14% to 20%. The Cookie DAO token (COOKIE) also experienced a substantial decline of over 13%, settling at $0.038. These individual token performances contributed to an overall 11% reduction in the InfoFi sector's total market capitalization, which now stands at $367 million.
On-chain data indicates a notable increase in Kaito's distribution and trading volumes. However, there have been no reported changes in Total Value Locked (TVL), liquidity shifts, or staking activities. The financial consequences of X's policy change are substantial for the InfoFi space, particularly given Kaito's prominent position within it.
Broader Cryptocurrency Market Remains Unaffected
The market impact of X's API policy change has been largely confined to the InfoFi token category. Major cryptocurrencies such as Ethereum (ETH) and Bitcoin (BTC) have not shown any direct consequences from this development. Similarly, other unrelated altcoins have remained unaffected by these specific events.
There are no documented instances of similar past events that have specifically targeted and impacted this sector with such localized effects. This situation highlights a distinct pressure on InfoFi tokens, without generating ripple effects into broader cryptocurrency classifications like governance tokens or decentralized finance (DeFi) assets.