X's Purge Triggers Ecosystem Changes, Ending the Narrative of InfoFi

In mid-January 2025, a platform-level policy overhaul swept through the entire crypto social ecosystem. As X (formerly Twitter) officially revoked API access for InfoFi applications, the era of “posting to mine” came to an end, and ecosystem projects relying on this incentive mechanism faced critical choices. This seemingly calm policy change actually marks a fundamental reshaping of the crypto social narrative.

Several well-known projects announced transformations within just a few days, causing intense market turbulence. Over the past 24 hours, the overall market cap of the InfoFi sector plummeted to $350 million, with many related tokens experiencing double-digit declines. The once-hot Yapybaras NFT floor price also experienced a sharp crash. Behind these changes is X’s thorough cleanup of its platform content ecosystem.

Sudden Policy Shift, Ecosystem Projects Collective Pivot

Nikita Bier, head of X product and Solana ecosystem advisor, openly stated in an official announcement: the platform will no longer permit applications that reward users for posting. Such incentive mechanisms are seen as the direct cause of AI spam and ineffective responses flooding the platform.

More shockingly, Nikita explicitly said X does not care about this part of its revenue. “These applications have already paid us millions of dollars for enterprise API access. We choose to abandon this income,” he emphasized in a public statement, highlighting that user experience has become X’s top priority. This reflects the harsh reality X faces—slowing user growth, low monetization efficiency, and rising strong competitors. Under this external pressure, cleaning up low-quality content and improving platform quality has become an inevitable survival strategy.

Ironically, Nikita even “thoughtfully” suggested that developers with terminated accounts could migrate to Meta’s Threads or decentralized social platform Bluesky. All this indicates that X’s attitude toward low-quality content applications is no longer negotiable.

Ecosystem Projects’ Self-Rescue Roadmap: From Incentives to Precision Marketing

In response to the policy upheaval, the most rapid reaction came from representative project Kaito. Its founder Yu Hu announced in an official statement that the company will gradually terminate Yaps and its incentive leaderboard system, and instead launch a new Kaito Studio product. This transformation plan goes far beyond simple “stopping the bleeding.”

According to official descriptions, Kaito Studio will adopt a layered traditional marketing framework, connecting brands with high-quality creators through top-tier data analysis tools, covering multiple platforms such as X, YouTube, TikTok, and even extending into finance and AI beyond cryptocurrencies. This shift is essentially a strategic upgrade from “unauthorized distribution” to “precise matching,” aligning with X’s new rules and closer to current industry content development trends.

Cookie DAO’s approach is more cautious. The platform announced immediate shutdown of Snaps and all related creator activities but has not completely abandoned the social content track. It is reported that Cookie is negotiating with the X team to explore continued cooperation under the new regulatory framework. Meanwhile, Cookie Pro—a real-time crypto market intelligence tool—is planned to launch in Q1, becoming a new pillar of the project’s transformation.

Market Doubts Behind Early Project Layouts

However, the rapid transformation strategies of these projects have sparked strong community doubts—did they already know about the policy changes in advance and preemptively avoid risks?

Take Kaito as an example. Its multi-signature contract transferred a total of 24 million KAITO tokens (worth about $13.31 million at the time) to five addresses two weeks before the policy change. Data from crypto KOL vasucrypto shows that an address starting with 0x049A related to the Kaito team transferred 5 million KAITO to Binance a week ago, likely for selling. Even more noteworthy, Kaito’s staking unlocks peaked at this time, with 1.1 million KAITO tokens unlocked shortly after the policy announcement, with a 7-day unbonding period.

The coincidence of these timelines has led the market to suspect: did the project team already have insider information? These suspicions further increased selling pressure on KAITO. As of now (January 21, 2026), KAITO is priced at $0.44, down 0.24% in 24 hours, with a circulating market cap of $106.14 million, significantly below its valuation at the policy announcement.

Deep Reshaping of Content Ecosystem, Market Adjustment Comes Late

From a macro perspective, X’s “big cleanup” is far more than just banning a single application; it’s a profound restructuring of the entire crypto content ecosystem.

This adjustment seemed sudden but was actually foreshadowed. Not long before the policy took effect, Nikita criticized the “suicidal demise” of crypto tweets. He pointed out that since October 2024, a popular saying in the CT community is that users need to reply hundreds of times daily to grow their accounts. But this “wool-harvesting” interaction essentially devalues the platform. Ordinary users only browse 20-30 posts daily, and the platform cannot display all posts from a user to all their followers, leading countless creators to waste influence on a few projects. The result is declining content quality and massive loss of genuine users.

The original intention of the InfoFi model was good—using token incentives to encourage high-quality content creation. But this mechanism was ultimately perverted by “grinding” behaviors. Profit-seekers flooded the platform with low-quality, repetitive spam, and fake traffic created a false prosperity that rapidly eroded platform value. For CT users fed up with noise, X’s “blockade” acts as a “noise filter,” finally allowing the timeline to breathe.

However, the decline in CT’s popularity isn’t solely due to InfoFi; the overall downturn of the crypto industry also plays a significant role. Crypto content views on YouTube have fallen to their lowest since January 2021, reflecting a cyclical industry adjustment rather than a problem with a single platform.

Future Path: From Parasite to Self-Generation

The end of the InfoFi model marks a fundamental shift in crypto social storytelling. When the shortcut of parasitizing Web2 giants’ traffic is cut off, ecosystem projects must consider a deeper question: how to establish a truly value-driven, rather than simply incentive-based, SocialFi mechanism?

This is not only a matter of project self-rescue but also a long-term test for the entire crypto content industry. The era of creating false prosperity through “unauthorized distribution” and token incentives is over. Future winners will be those who can focus on refining content quality and genuinely connect value producers with consumers. X’s decision may well be the beginning of this necessary “breaking the old and establishing the new.”