Key facts
- The ELIZAOS token, successor to the AI16Z token, has been declared dead by its founder, Shaw Walters.
- ELIZAOS has fallen approximately 97% from its peak, with its market value now around $2.3 million.
- The token's decline is attributed to litigation and a settlement that drained the foundation's treasury.
- A class action lawsuit accused the project of misleading investors about its autonomous AI-run venture fund status and diluting holders during a token migration.
Shaw Walters, founder of Eliza Labs, has declared the ELIZAOS token, a successor to the once-$2.4 billion AI16Z token, to be "completely" dead. He announced the closure of the ElizaOS foundation and advised holders to sell, while stating his intention to continue developing the underlying software without a new token.
The ELIZAOS token has seen a significant decline, falling approximately 97% from its peak to a current market value of about $2.3 million. This collapse is attributed to ongoing litigation and a settlement that depleted the foundation's remaining treasury.
A proposed class action lawsuit filed in federal court accused Eliza Labs of misleading investors by marketing the project as an autonomous, AI-run venture fund. The complaint also alleged that holders were diluted during the migration from the original AI16Z token to ELIZAOS. Walters cited the legal challenges and a lack of capital to fight objections from venture capital firm Andreessen Horowitz over the original name as reasons for the project's downfall.
AI16Z, which launched on Solana in October 2024, aimed to create an AI agent that would manage a venture-style fund, with token holders participating as partners. By late 2024, its associated vehicle held over $22 million in user-supplied tokens. The broader AI agent crypto sector, which included tokens like Virtuals Protocol, was valued at several billion dollars by early 2025, with AI16Z and Virtuals accounting for a significant portion of that market.