Shaw Walters of Eliza Labs announced the closure of the ELIZAOS foundation, advising token holders to sell, marking the end of a project that once replaced AI16Z after significant legal and financial turmoil.
By Shaurya Malwa|Edited by Stephen Alpher Aug 5, 2026, 12:28 p.m. 3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Eliza, the mascot of ElizaOS, a cryptocurrency that was once valued at $2 billion. (ElizaOS)SummaryShow- Shaw Walters, founder of Eliza Labs, has pronounced the ELIZAOS token as “completely” dead, announced the closure of its foundation, and suggested that holders sell their tokens while continuing to develop the underlying software without a new token.
- Once valued at $2.4 billion, the ELIZAOS token has plummeted about 97% to a market cap of approximately $2.3 million, following lawsuits and a settlement that depleted the foundation's funds.
- A class action lawsuit claims the project misled investors about its operations as an autonomous AI venture fund and diluted token holders during the transition from AI16Z to ELIZAOS, reflecting the volatility in AI-themed cryptocurrency tokens.
After reaching a peak market cap of $2.4 billion, the founder of AI16Z has now declared its successor, ELIZAOS, as defunct and has advised investors to sell.
Shaw Walters, who leads Eliza Labs and the open-source ElizaOS framework, confirmed that the ELIZAOS token is no longer viable, stating that the foundation is shutting down.
“The token is dead. Completely,” Walters stated on X earlier this week. He also mentioned that there would be no future support, buybacks, or supply adjustments from the foundation, though he intends to keep developing the software without introducing another token.
I guess I should say something about the token
— Shaw (spirit/acc) (@shawmakesmagic) August 4, 2026
Look. I worked my ass off to the point I got a frozen shoulder and severe health issues from overworking and typing, and it was never enough
We built cool stuff but it was completely ignored because number down
It felt like the…
Currently, ELIZAOS trades at approximately $0.00031, representing a drastic 97% decline from its peak value. In contrast, AI16Z, the token it succeeded, achieved a market cap of $2.39 billion on January 2, 2025, with daily trading volumes hitting $291 million. The now-abandoned AI16Z contract is still listed separately on CoinGecko, with a market cap of about $375,000 as of early US hours.
Walters attributed the closure to ongoing litigation, stating that the foundation had to use its remaining funds to settle with a group of holders represented by Burwick Law.
The firm initiated a proposed class action in the Southern District of New York in April, claiming false advertising, deceptive practices, negligent misrepresentation, and unjust enrichment. The lawsuit alleges that the project presented itself as an “autonomous, AI-run venture fund” while being controlled by Walters and other insiders. It also claims that holders experienced dilution during the transition from AI16Z to ELIZAOS.
The rebranding was prompted by objections from venture capital firm Andreessen Horowitz, commonly known as a16z, regarding the original project's name.
“Their claim was ridiculous, but we didn't have the capital to legally fight it,” Walters noted. He also reflected on how he once held tokens valued at around $25 million, which have since plummeted to nearly worthless.
CoinDesk has reached out to both Eliza Labs and Burwick Law for details on the settlement, the ongoing federal case, and what holders received after the expiration of the original daos.fun vehicle.
AI Agents: A Once Thriving Sector
AI16Z was launched on the Solana blockchain in October 2024, promoting an AI agent that operated as a venture-style fund, allowing token holders to act as partners. By late December, its daos.fun vehicle had accumulated over $22 million in user-supplied tokens, set to expire in October 2025.
The sector began with Truth Terminal, an account run by New Zealand researcher Andy Ayrey, which shared peculiar, quasi-religious content on X and received a $50,000 bitcoin donation from a16z founder Marc Andreessen in July 2024. Subsequently, a developer unrelated to the project launched GOAT, which quickly surged to a $1.2 billion valuation within days after its introduction.
Following this, a category emerged based on the concept that software could possess its own wallet, express its opinions, and have a token value linked to its future actions. The Base network-based Virtuals Protocol enabled anyone to deploy an AI agent in a matter of hours. The Solana-focused AI16Z took it a step further by suggesting that the agent would make investment choices on behalf of its users.
As a result, reply bots flooded Crypto Twitter, often launching tokens at one another, and by early 2025, the sector was valued at several billion dollars, with AI16Z and Virtuals making up over half of that market.