Key facts
- ElizaOS founder Shaw Walters declared the project's native token "dead" and is shutting down the Eliza Foundation.
- The foundation's remaining treasury was used to settle a class-action lawsuit filed by Burwick Law.
- The project will continue developing the ElizaOS AI agent framework without a token.
- The ElizaOS token, successor to the AI16Z token, has fallen approximately 97% from its peak market capitalization.
- The class-action lawsuit alleged misleading marketing about an AI-run venture fund and dilution of token holders.
Shaw Walters, founder of Eliza Labs, has declared the ElizaOS token "dead" and is winding down the project's foundation after a class-action lawsuit settlement exhausted its remaining funds. Walters announced in a post on X that the project settled with token holders represented by Burwick Law, stating, "The token is dead. Completely. The foundation is winding down." He plans to continue developing the open-source ElizaOS AI agent framework without a token, stating, "I am starting over, since I own the IP, and I am never letting a token come close to Eliza again."
The ElizaOS token, successor to the AI16Z token launched on Solana in October 2024, has fallen approximately 97% from its peak market capitalization of about $2.5 billion to a current value of around $2.3 million. The project was initially pitched as an AI-run decentralized autonomous organization using the Eliza framework to automate venture capital decisions. It rebranded to ElizaOS after Andreessen Horowitz objected to its use of the ai16z name.
A class-action lawsuit filed in April by Burwick Law in the U.S. District Court for the Southern District of New York alleged false advertising, deceptive business practices, negligent misrepresentation, and unjust enrichment. The complaint claimed Walters and Eliza Labs marketed ai16z as the governance token for an autonomous AI-managed venture fund modeled on Andreessen Horowitz, when insiders actually controlled the project. It also alleged improper use of the venture firm's branding, forcing a rebrand, and later diluting existing holders by expanding the token supply from 1.1 billion to 11 billion during a migration.
Walters stated the settlement consumed the foundation's remaining treasury and cash, noting, "Their claim was ridiculous, but we didn't have the capital to legally fight it so we settled on giving them the rest of what we had." He also said the lawsuit and the culture surrounding speculative crypto tokens convinced him to abandon tokenization, adding, "I don't own any tokens. I don't support any of it. I love the technology and I'll come back one day when the culture has grown past this point." Walters denied personally profiting from the project, earning only a modest salary comparable to the company's other engineers. Despite abandoning the token, Walters affirmed that development of ElizaOS will continue, stating, "Gonna keep building no matter what, every single day, and I’m not gonna stop until we live in a world where we each own our own data and we don’t have to pay to be smart. That’s the mission."