Today, X pulled the plug on InfoFi. Nikita Bier announced the ban on apps that reward users for posting. Tokens crashed. Communities scattered. Kaito sunsetted Yaps and Cookie DAO shut down Snaps. The narrative collapsed instantly.

But here's the part everyone's missing: the failure wasn't incentives. It was incentives without consequence.

InfoFi didn't prove that permissionless coordination is dead. It proved that unconditional rewards are a mechanism design failure. And there's a crucial difference.

InfoFi was trying to solve a real problem. Attention has value. The people who create buzz, surface alpha, and amplify quality content are doing real work. Why shouldn't they get rewarded for it?

The original vision was compelling. Kaito's Yaps aimed to be "freely accessible, fully public, and purely merit-based." Cookie DAO positioned itself as the data layer for measuring social impact. Galxe built task-based incentives for community activation. The pitch was the same: democratize attention, reward contribution, let merit win.

But here's the question nobody asked: who actually verified the merit?

When Yaps measured "mindshare," what were they measuring? Impressions. Engagement counts. Reply frequency. These are proxies for attention, but attention and quality are different things entirely. A bot farm generating thousands of "Great thread!" replies creates attention. A controversial hot take generates engagement. Neither creates information value.

The systems assumed that high engagement equals high quality. They assumed that if something gets attention, it deserves attention. But that's circular reasoning dressed up as mechanism design.

ZachXBT called it out directly: these platforms were encouraging AI bot spam at industrial scale. The merit-based promise was always an illusion because there was no mechanism to actually evaluate merit. Just metrics that could be gamed.

The vision was worthy. The verification layer was missing.

InfoFi's model was deceptively simple:

Post → Get Points

No filters. No consequences. No skin in the game.

Think about what this incentivizes. If posting earns points, you post more. If engagement earns points, you engage more. The quality of that engagement? Irrelevant to the reward function.

The result was predictable to anyone who's studied mechanism design. When rewards are unconditional, you get what you measure, not what you want. Goodhart's Law, weaponized:

"When a measure becomes a target, it ceases to be a good measure."

This isn't a new problem. We've seen it play out before. Steemit rewarded content with tokens and devolved into voting rings and bid bots. BitClout tokenized social profiles and became pure speculation. Friend.tech created access tokens that collapsed when the speculation cycle ended. Reddit's Moon tokens degraded the quality of r/cryptocurrency so badly they discontinued the experiment.

The pattern is consistent: unconditional rewards for social activity produce gaming, not quality. Every single time.

So people optimized for the measure. Bots flooded timelines. "gm" spam drowned out signal. AI-generated slop proliferated. Engagement metrics spiked 1,224% on some days while actual information value collapsed.

The specific failure modes across the InfoFi ecosystem:

• Reply farming: Generic "Great thread!" comments everywhere, optimized for touchpoints rather than insight

• Coordinated engagement rings: Groups gaming each other's metrics through mutual amplification

• Mercenary switching: Attention flowing to whoever offered the best points-to-effort ratio, destroying any authentic community

• AI content farms: Passable crypto commentary at scale, no human insight, indistinguishable from real analysis

• Sybil attacks: Multiple accounts amplifying the same content, multiplying fake signal

Kaito tried to fix it. They experimented with "tighter eligibility, higher thresholds in leaderboards, social + onchain filters and different incentive designs." Cookie tried selective access models. Galxe moved toward credentialing. Every platform tried to patch the symptoms.

But as Kaito admitted: "issues of low quality and spam largely remained."

You can't filter your way out of a broken incentive structure. Adding eligibility requirements just raises the bar for gaming. Adding AI detection creates an arms race with AI generators. Adding onchain filters just means gamers need wallets with history.

The problem wasn't who could participate. The problem was that bad participation had no cost. Wrong tweets had no penalty. Spam had no consequence. Every attempt at gaming was free. When the downside is zero, the rational strategy is to try everything and see what sticks.

The carrot was there. The stick was missing.

Kaito's conclusion hit hard:

"A fully permissionless distribution system is no longer viable."

Their pivot? Kaito Studio: "a tier-based traditional marketing platform, where brands selectively work with creators who meet defined criteria."

This will work. It's the same model that's worked for decades in traditional marketing. Brand approves creator. Creator delivers. Payment flows. Cookie is exploring similar directions. The infrastructure pivots from open platforms to curated marketplaces.

But let's be honest about what this means: the web3 ethos got abandoned.

The original promise was that anyone can participate and merit wins without gatekeepers. That new voices could emerge based on quality, not connections. That the playing field could be level.

That promise has been replaced by the familiar model of selected influencers and brand approval. The same system crypto was supposed to disrupt. The same dynamics that concentrate power in established voices and make it hard for newcomers to break through.

There's nothing wrong with traditional influencer marketing. It serves a purpose. But it's a retreat from the original vision, not an evolution of it.

Discovery suffers. When brands select creators, they select from who they already know or who has existing metrics. The unknown contributor with a brilliant idea never gets seen.

Innovation slows. Curated systems optimize for what's worked before. Permissionless systems let weird ideas surface and occasionally one of them changes everything.

Power concentrates. The gatekeepers decide who gets access. Over time, this creates the same insider dynamics that web3 was meant to escape.

Authenticity fades. When creators are selected and briefed, the content becomes marketing. When contributors participate freely and the community validates, you get genuine signal about what resonates.

They threw out the baby with the bathwater. The problem was never openness itself. The problem was openness without accountability. Because there IS a path they didn't see.

Here's what we've been building at Incented: permissionless participation where the community is in the loop and consequence creates signal.

It's still open:

• Anyone can submit work

• Anyone can vote on quality

• No gatekeepers deciding who's worthy

• No brand approval required

But the community actively participates in quality evaluation. And that participation has real stakes.

Stake FOR what you believe deserves to win. Put tokens on the line. Stake AGAINST what you believe doesn't belong. Same deal.

Your stake is your conviction, and your conviction has consequences.

When voting closes:

• Correct voters (backed winners OR opposed losers) earn rewards from the voting pool PLUS slashed tokens from incorrect voters

• Incorrect voters lose a percentage of their stake, redistributed to those who got it right

This creates something InfoFi never had: two ways to earn, both requiring real judgment.

Contributors earn from the award pool when their work wins community approval. But there's also a voting pool that rewards the people who do the work of evaluation. Curators, reviewers, community members who take the time to assess quality: they get paid for that labor.

This is the missing piece. InfoFi rewarded content creation but treated curation as free. Incented recognizes that quality evaluation is work, and compensates it accordingly. The people promoting your brand or organization aren't just posting: they're actively curating what deserves attention and what doesn't.

Here's why the mechanism changes everything:

Spam dies because staking on spam means losing tokens when the community votes it down. That "gm" reply? Would you stake $50 on it winning? Then don't submit it.

Quality emerges because voters who do their homework get rewarded. Skim a submission and guess? You're gambling. Read it properly, evaluate thoughtfully? You're making an informed bet that pays off.

AGAINST votes matter because identifying what shouldn't win is just as valuable as identifying what should. InfoFi had no mechanism for this. We reward it explicitly. Voting AGAINST a losing submission is as "correct" as voting FOR a winner. This creates a quality floor, not just a quality ceiling.

Sybils struggle because every fake account needs real tokens to stake. Gaming requires capital at risk, not just free API calls. The economics flip: attacking the system costs money, defending it earns money.

Newcomers can compete because conviction voting doesn't care about your follower count. A thoughtful evaluation from a new participant carries the same weight per token as one from an established player. Merit actually means something when it's backed by stake.

The insight is elegant: permissionless doesn't have to mean unconditional. You can maintain open access while requiring consequence. You can have the web3 ethos of anyone-can-participate while filtering for quality through community-powered mechanism design.

Consequence is part of truthful coordination.

Here's what the InfoFi conversation misses: incentivized coordination isn't just about content marketing. It's about any situation where communities need to surface quality and distribute rewards fairly.

The same primitives that make content curation work also solve harder coordination problems:

Grants programs are a natural fit. Traditional grant committees are small groups making subjective decisions. Conviction voting opens evaluation to the broader community while ensuring evaluators have skin in the game. The people closest to the work—developers, researchers, community members—can participate in deciding what gets funded. And they're rewarded for good judgment.

Bounties become more reliable. The classic bounty problem: someone submits work, there's a dispute about whether it meets requirements, and resolution is messy. With stake-weighted validation, the community determines whether deliverables meet the bar. Validators who correctly identify quality work (or correctly flag subpar work) earn from the voting pool. The incentives align.

Governance gets more thoughtful. Most token voting suffers from low participation and whale dominance. When voting requires staking and incorrect votes get slashed, participation becomes meaningful. You don't vote unless you've done the work to understand the proposal. Drive-by voting disappears.

The building blocks are flexible: Top X winners or quorum-based approval. Fixed prizes or proportional splits. Single rounds or recurring cycles. The primitives work for whatever coordination problem you're solving.

Real communities are already running programs:

• Coordinated Creation runs ongoing creative sprints where contributors earn for quality work and voters earn for accurate curation. Multiple cycles, recurring participation, growing quality bar.

• Based Creators activates their community through stake-weighted evaluation. Community members don't just consume content, they actively shape what gets amplified.

• DAOs using conviction voting for treasury allocation, moving beyond plutocratic token-weighted voting toward judgment-weighted decision making.

These programs run without spam floods. Quality emerges because the mechanism rewards quality, not volume. When incorrect voting costs you tokens, you pay attention.

One question we hear: "How does this connect to our social presence on X, TikTok, or other platforms?"

The answer: Incented handles the coordination and reward distribution. The content itself can live anywhere.

This is actually the key architectural insight. InfoFi tried to build reward systems on top of social platforms, dependent on their APIs and subject to their rules. That dependency proved fatal. When X changed policy, the entire ecosystem collapsed overnight.

A more resilient approach: separate the quality evaluation layer from the distribution layer.

Here's a practical workflow:

1. Run a content program on Incented where contributors submit their work and the community evaluates quality through stake-weighted voting

2. Winners get rewarded from the award pool, voters get rewarded from the voting pool—both pools funded by the organization running the program

3. Curate winning content based on community signal—you now know what your community actually values, validated by people with skin in the game

4. Distribute across channels using tools like Postiz for scheduling and cross-platform posting to X, TikTok, LinkedIn, wherever your audience lives

The content flows from coordination layer to distribution layer. The quality signal comes from your community. The distribution happens on whatever platforms make sense for your brand.

This architecture has several advantages:

Platform independence. Your coordination infrastructure doesn't depend on any single platform's API policies. X can change their rules; your community's quality signal remains intact.

Authentic signal. The content that gets distributed is content your community actually valued enough to stake on. That's a stronger signal than algorithmic engagement metrics.

Contributor alignment. Contributors know their work will be evaluated fairly and distributed if it wins. They're incentivized to create quality, not to game platform algorithms.

Measurable impact. You can track which community-validated content performs best on which platforms, creating a feedback loop that improves both curation and distribution over time.

We're happy to help organizations integrate this workflow. The goal is community-powered curation feeding into your existing social strategy: real signal, not engagement farming noise.

InfoFi's collapse doesn't mean incentivized communities are dead. It means the primitives need upgrading.

Kaito concluded that permissionless doesn't work. We respectfully disagree. What doesn't work is permissionless without consequence. Open access without skin in the game. Rewards without stakes.

Permissionless ≠ unconditional.

This distinction matters beyond the immediate InfoFi conversation. As crypto matures, the question of how to coordinate communities at scale becomes more pressing, not less. DAOs need better governance. Grant programs need better evaluation. Content platforms need better curation. The problems InfoFi tried to solve are real problems.

The answer isn't to retreat to gatekeepers and curated access. The answer is to build mechanisms that make open participation work. Mechanisms where quality emerges from incentive alignment, not from filtering at the door.

Brands can still activate communities without gatekeepers. Creators can still earn based on merit: real merit, validated by people with skin in the game. And those validators earn too. Communities can still coordinate contribution and reward.

The ownership economy isn't dead. It just needs better tools.

The stick makes the carrot meaningful.

If you're rethinking your community activation strategy after today's news, we'd love to show you what's possible.

Genuine permissionless coordination with consequence built into the mechanism. Two ways for your community to earn: creating quality work and curating it. Community-powered signal that feeds into your broader social strategy.

Explore how Programs work: docs.incented.co

See live programs: incented.co/explore

Schedule a conversation: Book a call

This post was written on January 15, 2026, in response to X's ban on InfoFi platforms and the shutdown of Kaito Yaps and Cookie Snaps.

Today, X pulled the plug on InfoFi. Nikita Bier announced the ban on apps that reward users for posting. Tokens crashed. Communities scattered. Kaito sunsetted Yaps and Cookie DAO shut down Snaps. The narrative collapsed instantly.

But here's the part everyone's missing: the failure wasn't incentives. It was incentives without consequence.

InfoFi didn't prove that permissionless coordination is dead. It proved that unconditional rewards are a mechanism design failure. And there's a crucial difference.

InfoFi was trying to solve a real problem. Attention has value. The people who create buzz, surface alpha, and amplify quality content are doing real work. Why shouldn't they get rewarded for it?

The original vision was compelling. Kaito's Yaps aimed to be "freely accessible, fully public, and purely merit-based." Cookie DAO positioned itself as the data layer for measuring social impact. Galxe built task-based incentives for community activation. The pitch was the same: democratize attention, reward contribution, let merit win.

But here's the question nobody asked: who actually verified the merit?

When Yaps measured "mindshare," what were they measuring? Impressions. Engagement counts. Reply frequency. These are proxies for attention, but attention and quality are different things entirely. A bot farm generating thousands of "Great thread!" replies creates attention. A controversial hot take generates engagement. Neither creates information value.

The systems assumed that high engagement equals high quality. They assumed that if something gets attention, it deserves attention. But that's circular reasoning dressed up as mechanism design.

ZachXBT called it out directly: these platforms were encouraging AI bot spam at industrial scale. The merit-based promise was always an illusion because there was no mechanism to actually evaluate merit. Just metrics that could be gamed.

The vision was worthy. The verification layer was missing.

InfoFi's model was deceptively simple:

Post → Get Points

No filters. No consequences. No skin in the game.

Think about what this incentivizes. If posting earns points, you post more. If engagement earns points, you engage more. The quality of that engagement? Irrelevant to the reward function.

The result was predictable to anyone who's studied mechanism design. When rewards are unconditional, you get what you measure, not what you want. Goodhart's Law, weaponized:

"When a measure becomes a target, it ceases to be a good measure."

This isn't a new problem. We've seen it play out before. Steemit rewarded content with tokens and devolved into voting rings and bid bots. BitClout tokenized social profiles and became pure speculation. Friend.tech created access tokens that collapsed when the speculation cycle ended. Reddit's Moon tokens degraded the quality of r/cryptocurrency so badly they discontinued the experiment.

The pattern is consistent: unconditional rewards for social activity produce gaming, not quality. Every single time.

So people optimized for the measure. Bots flooded timelines. "gm" spam drowned out signal. AI-generated slop proliferated. Engagement metrics spiked 1,224% on some days while actual information value collapsed.

The specific failure modes across the InfoFi ecosystem:

• Reply farming: Generic "Great thread!" comments everywhere, optimized for touchpoints rather than insight

• Coordinated engagement rings: Groups gaming each other's metrics through mutual amplification

• Mercenary switching: Attention flowing to whoever offered the best points-to-effort ratio, destroying any authentic community

• AI content farms: Passable crypto commentary at scale, no human insight, indistinguishable from real analysis

• Sybil attacks: Multiple accounts amplifying the same content, multiplying fake signal

Kaito tried to fix it. They experimented with "tighter eligibility, higher thresholds in leaderboards, social + onchain filters and different incentive designs." Cookie tried selective access models. Galxe moved toward credentialing. Every platform tried to patch the symptoms.

But as Kaito admitted: "issues of low quality and spam largely remained."

You can't filter your way out of a broken incentive structure. Adding eligibility requirements just raises the bar for gaming. Adding AI detection creates an arms race with AI generators. Adding onchain filters just means gamers need wallets with history.

The problem wasn't who could participate. The problem was that bad participation had no cost. Wrong tweets had no penalty. Spam had no consequence. Every attempt at gaming was free. When the downside is zero, the rational strategy is to try everything and see what sticks.

The carrot was there. The stick was missing.

Kaito's conclusion hit hard:

"A fully permissionless distribution system is no longer viable."

Their pivot? Kaito Studio: "a tier-based traditional marketing platform, where brands selectively work with creators who meet defined criteria."

This will work. It's the same model that's worked for decades in traditional marketing. Brand approves creator. Creator delivers. Payment flows. Cookie is exploring similar directions. The infrastructure pivots from open platforms to curated marketplaces.

But let's be honest about what this means: the web3 ethos got abandoned.

The original promise was that anyone can participate and merit wins without gatekeepers. That new voices could emerge based on quality, not connections. That the playing field could be level.

That promise has been replaced by the familiar model of selected influencers and brand approval. The same system crypto was supposed to disrupt. The same dynamics that concentrate power in established voices and make it hard for newcomers to break through.

There's nothing wrong with traditional influencer marketing. It serves a purpose. But it's a retreat from the original vision, not an evolution of it.

Discovery suffers. When brands select creators, they select from who they already know or who has existing metrics. The unknown contributor with a brilliant idea never gets seen.

Innovation slows. Curated systems optimize for what's worked before. Permissionless systems let weird ideas surface and occasionally one of them changes everything.

Power concentrates. The gatekeepers decide who gets access. Over time, this creates the same insider dynamics that web3 was meant to escape.

Authenticity fades. When creators are selected and briefed, the content becomes marketing. When contributors participate freely and the community validates, you get genuine signal about what resonates.

They threw out the baby with the bathwater. The problem was never openness itself. The problem was openness without accountability. Because there IS a path they didn't see.

Here's what we've been building at Incented: permissionless participation where the community is in the loop and consequence creates signal.

It's still open:

• Anyone can submit work

• Anyone can vote on quality

• No gatekeepers deciding who's worthy

• No brand approval required

But the community actively participates in quality evaluation. And that participation has real stakes.

Stake FOR what you believe deserves to win. Put tokens on the line. Stake AGAINST what you believe doesn't belong. Same deal.

Your stake is your conviction, and your conviction has consequences.

When voting closes:

• Correct voters (backed winners OR opposed losers) earn rewards from the voting pool PLUS slashed tokens from incorrect voters

• Incorrect voters lose a percentage of their stake, redistributed to those who got it right

This creates something InfoFi never had: two ways to earn, both requiring real judgment.

Contributors earn from the award pool when their work wins community approval. But there's also a voting pool that rewards the people who do the work of evaluation. Curators, reviewers, community members who take the time to assess quality: they get paid for that labor.

This is the missing piece. InfoFi rewarded content creation but treated curation as free. Incented recognizes that quality evaluation is work, and compensates it accordingly. The people promoting your brand or organization aren't just posting: they're actively curating what deserves attention and what doesn't.

Here's why the mechanism changes everything:

Spam dies because staking on spam means losing tokens when the community votes it down. That "gm" reply? Would you stake $50 on it winning? Then don't submit it.

Quality emerges because voters who do their homework get rewarded. Skim a submission and guess? You're gambling. Read it properly, evaluate thoughtfully? You're making an informed bet that pays off.

AGAINST votes matter because identifying what shouldn't win is just as valuable as identifying what should. InfoFi had no mechanism for this. We reward it explicitly. Voting AGAINST a losing submission is as "correct" as voting FOR a winner. This creates a quality floor, not just a quality ceiling.

Sybils struggle because every fake account needs real tokens to stake. Gaming requires capital at risk, not just free API calls. The economics flip: attacking the system costs money, defending it earns money.

Newcomers can compete because conviction voting doesn't care about your follower count. A thoughtful evaluation from a new participant carries the same weight per token as one from an established player. Merit actually means something when it's backed by stake.

The insight is elegant: permissionless doesn't have to mean unconditional. You can maintain open access while requiring consequence. You can have the web3 ethos of anyone-can-participate while filtering for quality through community-powered mechanism design.

Consequence is part of truthful coordination.

Here's what the InfoFi conversation misses: incentivized coordination isn't just about content marketing. It's about any situation where communities need to surface quality and distribute rewards fairly.

The same primitives that make content curation work also solve harder coordination problems:

Grants programs are a natural fit. Traditional grant committees are small groups making subjective decisions. Conviction voting opens evaluation to the broader community while ensuring evaluators have skin in the game. The people closest to the work—developers, researchers, community members—can participate in deciding what gets funded. And they're rewarded for good judgment.

Bounties become more reliable. The classic bounty problem: someone submits work, there's a dispute about whether it meets requirements, and resolution is messy. With stake-weighted validation, the community determines whether deliverables meet the bar. Validators who correctly identify quality work (or correctly flag subpar work) earn from the voting pool. The incentives align.

Governance gets more thoughtful. Most token voting suffers from low participation and whale dominance. When voting requires staking and incorrect votes get slashed, participation becomes meaningful. You don't vote unless you've done the work to understand the proposal. Drive-by voting disappears.

The building blocks are flexible: Top X winners or quorum-based approval. Fixed prizes or proportional splits. Single rounds or recurring cycles. The primitives work for whatever coordination problem you're solving.

Real communities are already running programs:

• Coordinated Creation runs ongoing creative sprints where contributors earn for quality work and voters earn for accurate curation. Multiple cycles, recurring participation, growing quality bar.

• Based Creators activates their community through stake-weighted evaluation. Community members don't just consume content, they actively shape what gets amplified.

• DAOs using conviction voting for treasury allocation, moving beyond plutocratic token-weighted voting toward judgment-weighted decision making.

These programs run without spam floods. Quality emerges because the mechanism rewards quality, not volume. When incorrect voting costs you tokens, you pay attention.

One question we hear: "How does this connect to our social presence on X, TikTok, or other platforms?"

The answer: Incented handles the coordination and reward distribution. The content itself can live anywhere.

This is actually the key architectural insight. InfoFi tried to build reward systems on top of social platforms, dependent on their APIs and subject to their rules. That dependency proved fatal. When X changed policy, the entire ecosystem collapsed overnight.

A more resilient approach: separate the quality evaluation layer from the distribution layer.

Here's a practical workflow:

1. Run a content program on Incented where contributors submit their work and the community evaluates quality through stake-weighted voting

2. Winners get rewarded from the award pool, voters get rewarded from the voting pool—both pools funded by the organization running the program

3. Curate winning content based on community signal—you now know what your community actually values, validated by people with skin in the game

4. Distribute across channels using tools like Postiz for scheduling and cross-platform posting to X, TikTok, LinkedIn, wherever your audience lives

The content flows from coordination layer to distribution layer. The quality signal comes from your community. The distribution happens on whatever platforms make sense for your brand.

This architecture has several advantages:

Platform independence. Your coordination infrastructure doesn't depend on any single platform's API policies. X can change their rules; your community's quality signal remains intact.

Authentic signal. The content that gets distributed is content your community actually valued enough to stake on. That's a stronger signal than algorithmic engagement metrics.

Contributor alignment. Contributors know their work will be evaluated fairly and distributed if it wins. They're incentivized to create quality, not to game platform algorithms.

Measurable impact. You can track which community-validated content performs best on which platforms, creating a feedback loop that improves both curation and distribution over time.

We're happy to help organizations integrate this workflow. The goal is community-powered curation feeding into your existing social strategy: real signal, not engagement farming noise.

InfoFi's collapse doesn't mean incentivized communities are dead. It means the primitives need upgrading.

Kaito concluded that permissionless doesn't work. We respectfully disagree. What doesn't work is permissionless without consequence. Open access without skin in the game. Rewards without stakes.

Permissionless ≠ unconditional.

This distinction matters beyond the immediate InfoFi conversation. As crypto matures, the question of how to coordinate communities at scale becomes more pressing, not less. DAOs need better governance. Grant programs need better evaluation. Content platforms need better curation. The problems InfoFi tried to solve are real problems.

The answer isn't to retreat to gatekeepers and curated access. The answer is to build mechanisms that make open participation work. Mechanisms where quality emerges from incentive alignment, not from filtering at the door.

Brands can still activate communities without gatekeepers. Creators can still earn based on merit: real merit, validated by people with skin in the game. And those validators earn too. Communities can still coordinate contribution and reward.

The ownership economy isn't dead. It just needs better tools.

The stick makes the carrot meaningful.

If you're rethinking your community activation strategy after today's news, we'd love to show you what's possible.

Genuine permissionless coordination with consequence built into the mechanism. Two ways for your community to earn: creating quality work and curating it. Community-powered signal that feeds into your broader social strategy.

Explore how Programs work: docs.incented.co

See live programs: incented.co/explore

Schedule a conversation: Book a call

This post was written on January 15, 2026, in response to X's ban on InfoFi platforms and the shutdown of Kaito Yaps and Cookie Snaps.