Is Elon Musk's X intentionally limiting cryptocurrency content? Multiple project tokens on InfoFi plummet!

Web3 plays a crucial role as the traffic lifeline of social giants—X platform (formerly Twitter). The recent API policy revision announcement precisely targets the booming “InfoFi” track, triggering intense market turbulence and industry reflection. Is this Elon Musk's deliberate throttling of cryptocurrency content, or a necessary move to purify the platform ecosystem?

Posting for Mining

The trigger for this event was a public statement from Nikita Bier, Product Lead of X platform. He clearly stated: “We are revising our developer API policies, and applications that reward users for posting on X (the so-called 'InfoFi') will no longer be permitted.”

Bier openly explained the purpose: “These types of applications have caused大量AI spam content and reply spamming behaviors on the platform.” He added that X has revoked API access for these applications, and expects user experience to “improve soon” because automated bots will no longer be able to profit from spamming behaviors.

This announcement is essentially a “death sentence” for the entire InfoFi ecosystem. The so-called InfoFi (Information Finance), emerged in 2025, is a crypto-economic model. Its core logic involves third-party applications using X's API to track user-generated content, replies, and interactions related to specific projects, and distributing points, tokens, or airdrops based on the “attention” or “influence” generated. This mode of turning “posting/replying” into “mining” is vividly called “mouth mining” or “posting mining,” quickly attracting many users and automated bots seeking zero-cost gains.

However, the drawbacks of this model have become increasingly apparent. To maximize profits,大量模板化、低质量、同质化的推广内容如潮水般涌入用户的时间线，有价值的深度讨论和真实互动反而被淹没在信息的汪洋大海之中。对于X平台而言，其核心价值在于构建一个真实、活跃的公共对话广场。当平台充斥着为赚取奖励而生的AI废话时，无疑是对其根基的侵蚀。

Market Collapse

Following the “ban” by X platform, market reactions were swift. As the leading project in the InfoFi track, Kaito.ai's governance token $KAITO plummeted. Its price dropped from around $0.7 to $0.52 within hours, a 24-hour decline of over 20%. Another well-known project, Cookie DAO's token $COOKIE, also declined, with the entire InfoFi sector's market cap evaporating by over 12% within 24 hours.

Faced with this survival crisis, relevant project teams had to respond quickly: Kaito's Desperate Survival: Kaito founder Yu Hu announced that they would gradually shut down their core “posting mining” product Yaps and its incentive leaderboard. The company is shifting its focus to a new product called “Kaito Studio.” Described as more like a traditional, tiered KOL marketing platform, brands can select collaborators based on standards for precise targeting, rather than the previous “everyone can mine” indiscriminate model. Meanwhile, their business scope will expand from X to YouTube, TikTok, and other channels, covering fields beyond crypto into finance, AI, and more. Cookie DAO's Unwilling Transition: Cookie DAO also announced the closure of its similar Snaps product, calling it a “difficult and sudden decision,” but essential for “maintaining the integrity of Cookie's data layer and products.” The team stated they will focus more on their B2B Cookie3 Analytics data analysis tool and upcoming AI market intelligence tools. Platforms like XEET, Pulse, and others have also announced suspensions or major adjustments. This storm ruthlessly exposes the fragility of the InfoFi model—it is like a vine parasitically growing on the big tree of X, powerless once the host changes the rules.

Amid market wails, a爆料 from Zombit added a layer of suspense. Data shows that over 1 million $KAITO tokens were unstaked before and after the X official announcement, which is 20 to 30 times the normal level. Since unstaking usually requires a 7-day waiting period, this suggests that holders of these funds likely learned insider information before the ban was publicly announced and acted accordingly, precisely avoiding subsequent sharp declines. This discovery has raised serious questions about the fairness of information disclosure.

Beyond X

Looking further, X's action is not an isolated case. It echoes recent strategic shifts in DeFi projects' Discord community management, forming a wave of “threat model-driven channel hardening.”

For a long time, Discord has been the main hub for Web3 communities, but its open public channels have become hotspots for scams and phishing attacks. Scammers can easily impersonate project team members and send malicious links via DMs. DefiLlama founder 0xngmi once complained: “Discord makes it almost impossible for us to protect users from scams.”

Therefore, more projects are “downgrading” their Discord servers. For example, DefiLlama and Morphoo have set their main Discord channels to “read-only” mode, directing user support to more controllable, ticket-based channels.

The API-level crackdown on incentivized posting by X, and the tightening of community permissions by DeFi projects, are essentially two sides of the same coin: when an open communication channel is abused, and its negative effects (spam, scams) outweigh its positive value (community activity, user growth), platforms or project teams will inevitably tighten permissions, shifting from “open participation” to “controlled management.”

Web3 Marketing

X's ban marks the end of the “mouth mining” mode and forces the entire Web3 industry to rethink its marketing and user growth strategies. The future may diverge into several directions: Return to on-chain interactions: Airdrops were originally meant to reward early testers, liquidity providers, or contributors. In the future, projects may focus more on genuine, meaningful on-chain behaviors, using more sophisticated anti-witch attack mechanisms to filter true contributors rather than social media spammers. Revival of decentralized social (SocialFi): This incident highlights the risks of over-reliance on centralized platforms. Building applications on decentralized social protocols means developers don't have to worry about platform rule changes or API cuts. This protocol-level security could attract more Web3-native projects. Return of professional KOL value: When AI matrices and bots are blocked from generating profits, those who produce high-quality content through deep research, firsthand information, and unique insights will regain their value, potentially restoring industry order. Rise of exchange communities: Community ecosystems built by centralized exchanges like Binance Square and OKX Orbit may become new traffic hubs. These platforms seamlessly integrate information flow, social interaction, and trading functions, forming efficient conversion loops that are highly attractive to users and project teams alike.

Conclusion

Elon Musk's X platform's “one-size-fits-all” approach to InfoFi appears to target specific crypto applications on the surface, but it is actually a profound industry warning. It exposes the awkward reality that Web3, in its pursuit of “native sovereignty,” still relies on Web2 infrastructure—an embarrassing “parasite” relationship. This is not merely a matter of “throttling,” but a fundamental choice about platform health, user experience, and sustainable business models. For the crypto world, this pain may be necessary. It will force builders to abandon fragile “parasitic” models and instead develop more robust, decentralized, and truly value-driven community and marketing paradigms.

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