Kaito winds down crypto-backed ‘Yaps’ as X bans payments for ‘AI slop’

Artificial intelligence-powered crypto platforms such as Kaito.ai and Cookie DAO have been banned from paying users to post content on X to curb the amount of so-called “AI slop” on the social media site.

“We will no longer allow apps that reward users for posting on X (aka ‘infofi’),” X head of product Nikita Bier said on Thursday. “This has led to a tremendous amount of AI slop [and] reply spam on the platform.”

“We have revoked API access from these apps, so your X experience should start improving soon (once the bots realize they’re not getting paid anymore),” he added.

Within an hour of Bier’s post, Kaito said it would sunset its “Yaps” product that rewarded users for posting on X, triggering a major fall in its KAITO (KAITO) token.

Cookie DAO said its similar “Snaps” product would also be wound down, leading to a decline in its Cookie DAO (COOKIE) token.

Yaps and Snaps rewarded users with points, tokens and airdrops for posting and engaging with crypto content on X, often leading users to turn to AI to generate responses.

X said it would support affected apps seeking to migrate to other social networks.

Tokens take a hit

CoinGecko data shows KAITO fell 17.7% after X’s ban to $0.57, while COOKIE tanked 15.5% to $0.038.

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The broader InfoFi crypto market cap is now down 13% over the last 24 hours to $359.5 million.

KAITO stakers accused of suspicious move

X’s ban also sparked accusations that some KAITO stakers may have had advanced knowledge that it was coming before the company publicly announced it.

Over 1 million KAITO tokens are set to be unstaked on Friday, 20 to 30 times higher than usual. Since the unstaking period takes seven days, some crypto analysts suggested this could indicate that insiders received early information about the ban.

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