Shaw Walters declares the ELIZAOS token worthless, advising holders to sell as the foundation shuts down amid legal challenges.
Shaw Walters announces the end of ELIZAOS, urging token holders to sell as legal troubles mount.
Shaw Walters, the founder of Eliza Labs, has officially declared the ELIZAOS token worthless, advising investors to sell their holdings. This announcement comes amidst the closure of the ELIZAOS foundation, which once boasted a market cap of $2.4 billion but has since plummeted by about 97% to roughly $2.3 million.
Walters stated unequivocally, "The token is dead. Completely," on X, emphasizing that the foundation will not provide any future support or buybacks. Despite the token's demise, he plans to continue developing the underlying software without launching a new token.
"I worked my ass off to the point I got a frozen shoulder and severe health issues from overworking... It felt like the…" — Shaw Walters
Currently, ELIZAOS trades at approximately $0.00031, reflecting a drastic decline from its peak value. In comparison, its predecessor, AI16Z, had reached a market cap of $2.39 billion in early 2025, with daily trading volumes hitting $291 million. The abandoned AI16Z contract is still noted on CoinGecko with a market cap around $375,000.
The closure of ELIZAOS is attributed to ongoing legal battles, with Walters revealing that the foundation used its remaining resources to settle claims from investors represented by Burwick Law. This class action lawsuit alleges misleading practices regarding the project's operations and claims that token holders faced dilution during the transition from AI16Z to ELIZAOS.
The rebranding from AI16Z to ELIZAOS was prompted by a legal complaint from venture capital firm Andreessen Horowitz, which raised concerns over the name. Walters lamented the lack of funds to contest the claim, reflecting on how his personal holdings, once valued at $25 million, have drastically diminished in worth.
The Rise and Fall of AI-themed Cryptocurrencies
AI16Z was launched on the Solana blockchain in October 2024, promoting an AI agent designed to function as a venture fund, allowing token holders to participate as partners. The project gained traction quickly, amassing over $22 million in user-supplied tokens by late December.
Initially inspired by various AI projects, the sector saw rapid growth, with tokens like GOAT achieving valuations of $1.2 billion shortly after their launch. The concept of AI agents that could operate independently and make investment decisions for users attracted significant interest, leading to a market worth billions by early 2025.
