INFOFI'S COBRA EFFECT

Summary from the TLDR Crypto newsletter

InfoFi's promise to tokenize and democratize off-chain data has backfired, turning platforms like Crypto Twitter into spam factories where bots and airdrop hunters flood sentiment and mindshare metrics. Efforts to tokenize social capital, ranging from token-gated content and social tokens to onchain social graphs, have incentivized engagement over accuracy, worsening information quality. This “cobra effect” traps InfoFi in a narrow loop of repetitive, copy‑paste solutions that fail to address real needs and generate continual hype cycles. Genuine progress requires sourcing data outside of engagement-driven social consensus rather than building more coordination layers atop a flawed foundation.