ElizaOS Token Plunges 19% to Record Low After Founder Declares It 'Dead'
Key Takeaways
- •The ElizaOS token dropped 19% to an all-time low of approximately $0.000285 after founder Shaw Walters declared it "dead" and confirmed the Eliza Foundation would cease operations.
- •The token's market capitalization has fallen more than 99% from its January 2025 peak of $2.5 billion when it traded as AI16Z, leaving it at roughly $2.1 million.
- •Eliza Labs settled a lawsuit filed by tokenholders alleging false advertising and unjust enrichment by surrendering its remaining treasury funds, while the named plaintiff's claims were dismissed with prejudice.
- •Development of the open-source Eliza software will continue independently without token association, and Walters committed to never launching another Eliza-branded token.
- •The project originally launched in October 2024 as ai16z and rebranded to ElizaOS in January 2025 after Andreessen Horowitz raised brand confusion concerns.
The ElizaOS token tumbled 19% over 24 hours to an all-time low after Eliza Labs founder Shaw Walters stated that the token was "dead" and that the Eliza Foundation was winding down operations.
According to CoinGecko data, the token was trading at $0.000285 at the time of writing, after touching a record low of $0.000284 on Thursday. Its market capitalization stood at approximately $2.1 million — a fraction of the heights it reached earlier this year.
"The token is dead. Completely," Walters said, adding that he no longer owned or supported the token. He confirmed that development of the open-source Eliza software would continue independently, without the token or the foundation.
The collapse marks a dramatic reversal for one of the AI-agent sector's former standout tokens. Before rebranding as ElizaOS, the token — then known as AI16Z — reached a peak market capitalization of $2.5 billion in January 2025, according to CoinGecko, representing a decline of more than 99% from that all-time high. The broader AI-agent token category has also experienced sharp pullbacks over the same period as investor enthusiasm cooled and scrutiny increased over whether tokens tied to AI projects served genuine utility.
Founder Blames Lawsuit and Token Culture
Walters said Eliza Labs had privately settled with a group of tokenholders represented by Burwick Law, agreeing to hand over its remaining treasury and funds. He described the lawsuit as "ridiculous" but said the project lacked the financial resources to continue litigating.
The lawsuit, filed in April and tracked via PacerMonitor, named Eliza Labs, Walters, Sebastian Quinn-Watson, and the AI16Z DAO as defendants. It alleged false advertising, deceptive practices, negligent misrepresentation, and unjust enrichment.
Court records show that the named plaintiff's claims were dismissed with prejudice by stipulation on July 8, meaning that plaintiff cannot refile those claims, while the proposed class's claims were dismissed without prejudice, leaving the door open for class members to pursue claims separately.
Cointelegraph contacted Walters and Burwick Law founder Max Burwick for comment but had not received a response by the time of publication.
Walters stated there were no remaining funds for token buybacks and no foundation or future supply intervention available to support the token, effectively removing any organizational backing from the asset. He also said he would not permit another token to be associated with Eliza going forward, while continuing to build its underlying operating system.
"I am starting over, since I own the IP, and I am never letting a token come close to Eliza again [...] I'm never going to support an Eliza token," he wrote.
Background
ElizaOS is an open-source framework for building and managing AI agents. The project originally launched in October 2024 as ai16z, with an initial fundraising goal of $75,000 to build an autonomous investor.
In January 2025, the project rebranded to ElizaOS after Andreessen Horowitz (a16z) raised concerns about brand confusion. The token was subsequently migrated as part of the transition.
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