X cracks down on AI spam and forces InfoFi platforms to revise models.

• X prohibits rewards for posts via API.
• InfoFi loses ground as incentives end.
• AI spam generates positive user reaction.

AX has initiated a broad review of its API policy for developers and has begun blocking applications that reward users for posting on the platform. The decision directly targets the proliferation of automated responses and spam generated by artificial intelligence, a practice that had been dominating conversations related to cryptocurrencies and Web3.

With the new rules, applications connected to the API can no longer distribute tokens, points, or payments in exchange for engagement. Access for several projects has already been revoked, immediately affecting initiatives linked to the so-called InfoFi, a model that transforms attention and interactions into monetizable assets. Despite the restriction, X stated that it remains open to developers in the crypto sector, as long as they do not adopt direct financial incentives for posts.

"There are incredible use cases for CT and crypto/web3 with the X API, which we will continue to support and demonstrate."

wrote Chris Park, developer of X. “We’ll be sharing some amazing updates and releases very soon! Stay tuned.”

InfoFi gained traction by proposing to reward users for amplifying content deemed relevant by algorithms. Proponents of the model point to informational gains, while critics highlight the increase in superficial responses. One of the best-known examples is Kaito, which uses AI to identify trends in cryptocurrency posts and reward accounts that amplify these discussions.

Following the API change, the KAITO token experienced a sharp drop, reflecting doubts about the viability of the model. Pressure increased after public criticism from Nikita Bier, head of product at X, who stated that the platform's limited attention economy is wasted on low-value interactions.

“When you create a financial incentive for someone to post, it generates more posts. Combine that with AI and you have a huge amount of irrelevant content. Now, the average CT post is worthless garbage.”

said Nic Carter, from Castle Island Ventures.

Udi Wertheimer, founder of Taproot Wizards, also reacted: “I’m still shocked that some people at CT supported this. X gives you direct access to the most powerful people on the planet and the best use you’ve found for it is farming points? Criminally unimaginative.”

The backlash went beyond the crypto sector. James Seyffart of Bloomberg Intelligence stated, "We need to limit this kind of thing as much as possible." Paul Graham of Y Combinator called AI responses a "plague."

Given the new scenario, projects have announced changes. Kaito has announced that it will abandon the token-based model.

"Following discussions with X, it was agreed that a completely permissionless distribution system is no longer viable."

"Kaito Studio will be much closer to a traditional, tiered marketing platform," said Yu Hu, founder of Kaito.

Other initiatives have paused campaigns or stated they do not depend on incentives. Meanwhile, startups are seeking alternatives outside of paid engagement, signaling a reorganization of the InfoFi space after the crackdown on X.