The InfoFi cycle during the quarterly adjustment period, the battle to reshape content on crypto social media

In the cycle of quarterly transitions within the crypto industry, a seemingly sudden “platform crackdown” is actually the market’s self-correction. The comprehensive ban by X (formerly Twitter) on InfoFi applications is a typical manifestation of this cycle’s turning point—when the cycle enters a correction phase, false prosperity is thoroughly cleared out. In mid-January 2026, this event dubbed “The Sky Is Falling” actually reflects the rational game between platforms and ecosystems at a critical turning point in the crypto industry’s quarterly cycle.

Policy Adjustments at the Cycle’s Turning Point: X’s “Content Justice” Declaration

As the quarterly cycle shifts into correction, platforms take the lead. Nikita Bier, head of X and advisor to the Solana ecosystem, officially announced revisions to the developer API policies, directly halting all reward-based user posting applications, including InfoFi.

Nikita’s reasoning is straightforward: these incentive mechanisms generate大量 AI spam messages and ineffective responses. What’s more intriguing is that even though applications like InfoFi contribute millions of dollars in API “tolls” to X, the platform chooses to cut them off ruthlessly. “We don’t want this money,” Nikita’s statement indicates that user experience has become X’s current strategic priority, especially under the pressure of a slowing user growth, low monetization efficiency, and the correction phase.

In fact, this is not X’s first crackdown on low-quality content. As early as October last year, Nikita criticized crypto tweets for heading toward “suicidal demise”—users frantically creating spam to chase rewards, leading to timelines flooded with noise. His comments then sparked the “GM retaliation,” and the tweets were eventually deleted. But looking back, X’s resolve to clean up has never wavered; it has only escalated gradually during the cycle transition.

Ecosystem Projects’ “Amputation for Survival”: Strategic Shifts Amid Cycle Shuffle

With X tightening its API policies, the narrative around InfoFi has officially entered winter. Data shows that the market cap of the InfoFi sector once dropped to $350 million, with many tokens experiencing double-digit declines. Even the floor price of Yapybaras NFTs under Kaito’s umbrella couldn’t escape, plummeting sharply.

More noteworthy is the proactive response from project teams to this cycle change. Kaito founder Yu Hu was the first to state that the company would gradually cease Yaps and incentive-based leaderboard systems, shifting instead to launch Kaito Studio. This was not a hasty move but a strategic adjustment after full communication with X—both sides reached a consensus that a fully unlicensed distribution system was no longer feasible.

Kaito Studio’s new direction is clear: adopting a layered traditional marketing approach, connecting brands with high-quality creators through top-tier analytics tools, covering platforms like X, YouTube, TikTok, and expanding into fields beyond crypto such as finance and AI. This reflects a keen sense of the cycle change—when social media mining benefits fade, project teams begin seeking more stable, commercially valuable monetization paths.

Cookie DAO’s response was equally swift. The platform decided to immediately shut down Snaps and all related creator activities, and to negotiate the future feasibility of similar products with the X team. Some activities involving paid fees and reward commitments are more complex, but Cookie DAO promises to communicate individually based on fairness principles. Clearly, Cookie Pro, a crypto real-time market intelligence tool, is already in the launch plan for Q1.

Token Unlock Waves and Market Cycle Transition: Who Is Cashing Out?

An interesting suspicion arises here. Based on project teams’ statements, they seem to have “anticipated” the shift in sentiment and made strategic adjustments accordingly. This has also sparked community doubts: did the team know about negative news in advance and sell off?

Take Kaito as an example; the evidence is quite “interesting.” Its multi-signature contract address transferred a total of 24 million KAITO tokens two weeks ago (worth about $13.31 million). Crypto influencer vasucrypto dug deeper into on-chain data, discovering that an address starting with 0x049A related to the Kaito team transferred 5 million KAITO to Binance seven days ago, possibly for cashing out. Even more intriguing, 1.1 million KAITO tokens were unlocked during this period, with a staking period of 7 days—this sequence of operations suggests that market participants had an early layout for the cycle change.

According to the latest data, KAITO is currently priced at $0.43, with a 24-hour change of +0.43%, and a circulating market cap of $104.98 million—significantly adjusted from its market cap at the time of the event. This also indirectly reflects the ongoing impact of the cycle transition on token prices.

From “Mouth-Playing” to “Content Justice”: The Reshaping of Crypto Social Media’s Cycle

This industry-wide cleanup by X is fundamentally a survival choice under cycle pressure, reflecting a deeper reshaping of the crypto content ecosystem.

The original intent of InfoFi was sound—using token incentives to encourage high-quality content creation. But this mechanism has gradually been distorted during the cycle’s progression. Many profit-seekers, in pursuit of rewards, have frantically produced low-quality, repetitive spam. This false prosperity of traffic not only makes content dull but also drowns out truly valuable voices, accelerating genuine user loss. The crypto Twitter scene (CT) has gone from peak prosperity last year to current decline—not solely due to InfoFi’s failure but also because of the overall cyclical downturn in the industry.

Undoubtedly, this “blockade” for users fed up with spam is akin to a “content filter.” The timeline can finally breathe a sigh of relief.

New Opportunities in the SocialFi Stage of the Cycle: Building Genuine Value Flows

For InfoFi projects, when the shortcut of parasitizing Web2 giants’ traffic is cut off, entering a new cycle stage presents a bigger challenge: how to establish a SocialFi mechanism based on genuine value flow?

This is no longer a simple “chat and earn” game but requires balancing user incentives, content quality, and platform experience within a complex system. Successful projects must find a new position amid the cycle shift—avoiding the pitfalls of low-quality content while discovering more efficient monetization paths than traditional advertising.

Once the cycle transition is complete, the next phase has already begun. The endpoint of InfoFi is precisely the starting point for the rebirth of the crypto social media content ecosystem.

(Original content adapted with permission from PANews)