Nikita Bier, X’s head of product, announced the change this morning.
Information finance, or InfoFi, is facing new headwinds after X’s head of product, Nikita Bier, announced that InfoFi projects are now banned from rewarding users for X posts, sending the KAITO token plunging.
KAITO is down 17% today, dropping from $0.7 to $0.56 in minutes after the announcement.
Kaito enables its users to earn rewards, including token allocations and partner project perks, via “yapping,” which incentivizes X users to post about specific projects that command mindshare on Kaito.
Many crypto natives attribute X’s perceived loss of authenticity and value to the crypto community to InfoFi projects such as Kaito, due to the slew of artificial intelligence (AI)-generated and automated posts that farm rewards on such platforms.
According to onchain sleuth ZachXBT, the Kaito Yapper community on X, which has 157,000 members, was also banned.
In December, ZachXBT aggregated public X location data from more than 70,000 InfoFi accounts provided by Serpin Taxt, the founder of Ethos, an onchain reputation protocol. The data revealed that just 26% of accounts farming InfoFi were from developed nations.
Cookie DAO, another InfoFi project, responded to the news from X today and decided to sunset its Snaps Platform and other creator campaigns. In an official statement, Cookie said, “We’re also working directly with every project that has a live Snaps campaign. Some situations are complicated, campaigns were paid for, and rewards were promised. We don’t have all the answers yet, but we’re committed to fair outcomes and will communicate directly with each project.”
Kaito founder Yu Hu also announced today that Kaito is sunsetting Yaps and incentivized leaderboards to begin “the new era of Kaito – Kaito Studio.”
Per the statement, Kaito has been in discussions with X regarding the impending change.
“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. Kaito Studio will be much closer to a tier-based traditional marketing platform, where brands selectively work with creators who meet defined criteria and deliver against clear scopes,” Hu wrote.
Kaito Studio envisions crypto as the future of infrastructure for product enhancement rather than the product itself.
“In other words, the future of crypto isn’t about turning every vertical into a Web3 version of itself, but about going deeper into what crypto does best. Crypto will increasingly sit underneath many industries that run on top of it. Instead of building and creating for crypto, we should be building and creating for the world more generally,” Hu concluded.