AI agent token once worth $2.4 billion ends with founder calling it dead
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Shaw Walters, founder of Eliza Labs, announced that the ELIZAOS token is "completely dead," with the foundation closing and urging holders to sell. The ELIZAOS token, which replaced the AI16Z token, has lost about 97% of its value since its peak. The shutdown followed litigation tied to accusations that the project misled investors about being an autonomous, AI-run venture fund and diluted holders during the migration from AI16Z to ELIZAOS. Walters said he will continue software development without issuing a new token.
Why it matters
This development highlights the unraveling of AI agent–themed cryptocurrency tokens, a once-popular segment that saw market values reach billions. The lawsuit and decline of ELIZAOS illustrate risks surrounding claims of autonomous AI in crypto projects and the consequences of investor disputes. It also shows challenges in defending against litigation even for well-known figures in crypto investing.
Key context
AI16Z launched on Solana in October 2024, presenting itself as an AI agent managing a venture-style fund with token holder participation. The initial AI16Z token reached a peak market cap of $2.4 billion in early 2025 before being replaced by ELIZAOS after objections from a16z over the token’s name. Litigation ensued accusing the project of false advertising and diluting holders. The broader category of AI agent tokens gained billions in value based on the idea that software agents could autonomously manage crypto assets.
Key numbers and entities
Shaw Walters (Eliza Labs founder), ELIZAOS token current market cap about $2.3 million, down 97% from its peak. AI16Z reached $2.39 billion market cap on January 2, 2025. Daily volume hit $291 million at its peak. The foundation settled with holders represented by Burwick Law, facing a proposed class action in the Southern District of New York. Andreessen Horowitz (a16z) objected to the original AI16Z token name.
What remains unclear
CoinDesk reports that Eliza Labs and Burwick Law have not responded regarding the settlement terms, the status of the federal class action lawsuit, or what holders received when the original DAOs.fun vehicle expired. The full details of the litigation settlement and ongoing case remain undisclosed.