X cracks down on ‘InfoFi’ reward models, triggering sell-offs across crypto social tokens

X has moved to limit a rising class of crypto-linked purposes that reward customers for posting or participating on the platform, a coverage shift that has already rippled by means of tokens tied to so-called “InfoFi” fashions.

On 15 January, X’s Head of Product, Nikita Bier, stated the corporate had revised its developer API insurance policies to ban apps that financially incentivize customers to put up content material. 

In keeping with Bier, the change was aimed toward curbing the rise of automated replies, low-quality engagement, and AI-generated spam that had more and more crowded timelines.

As a part of the replace, X has revoked API entry from affected purposes. This successfully cuts off the infrastructure many of those platforms depend on to trace engagement and distribute rewards. 

Bier added that builders whose accounts have been terminated may search help transitioning their merchandise to different platforms equivalent to Threads or Bluesky, seen as a cheeky “go away” to the mannequin.

Coverage shift targets InfoFi reward-for-post mechanics

The choice straight impacts initiatives constructed round compensating customers with tokens, factors, or different incentives for posting, replying, or amplifying content material on X. 

These mechanics, usually branded beneath the “InfoFi” or “consideration finance” narrative, gained traction in 2025 as crypto initiatives experimented with monetizing social engagement and data circulation.

Nevertheless, critics have lengthy argued that the mannequin inspired quantity over high quality, resulting in bot exercise and spam quite than significant participation. 

X’s policy change formalizes that stance, signalling that reward-driven posting is now not appropriate with its API ecosystem.

InfoFi-linked tokens see fast draw back strain

CoinGecko sector heatmap confirmed widespread declines throughout a number of InfoFi tokens. As of this writing, the market cap had dropped by over 11% to round $367 million. 

Supply: CoinGecko

The drop signifies that buyers are reassessing publicity to initiatives reliant on X-based incentives quite than reacting to remoted project-specific information.

Kaito AI [KAITO], one of the crucial seen initiatives within the class, recorded a steep sell-off shortly after the coverage replace. It dropped by virtually 16% to commerce at round $0.57, with a spike in quantity additionally recorded.

Supply: TradingView

The on-chain indicators counsel heightened distribution through the transfer decrease.

Cookie DAO [COOKIE] skilled an analogous response. The token dropped sharply by over 13% to commerce round $0.038. It additionally noticed a quantity spike, with over 17 million recorded as of this writing.

Platform danger comes into focus for crypto-social fashions

The episode highlights a recurring problem for crypto initiatives constructed on centralized platforms: dependency danger. 

Whereas InfoFi fashions aimed to tokenize consideration and participation, many relied closely on X for distribution, automation, and verification of engagement — leaving them uncovered to sudden coverage adjustments.

The announcement has triggered fast reactions in crypto circles, with many calling it the “finish of InfoFi” on X.

Closing Ideas

• X’s API coverage replace has uncovered structural weaknesses in InfoFi-style crypto initiatives constructed round reward-for-post mechanics.
• The sharp response throughout associated tokens underscores how shortly platform danger can translate into market strain when core assumptions are challenged.