Shaw Walters, founder of the AI agent project ElizaOS — originally launched as ai16z — has announced that the project's token is dead and its foundation is winding down.

Walters shared the news on his personal X account, stating that he is finished fighting for the token side of the project and intends to move forward without one. "I am starting over, since I own the IP, and I am never letting a token come close to Eliza again," he wrote.

Reasons Behind the Shutdown

Among the challenges that plagued the platform, a federal class action brought by Burwick Law appears to have been a decisive factor. Walters said his team handed over the last of its treasury and cash reserves to the plaintiffs as part of a settlement.

Walters emphasized that the settlement was not an admission of wrongdoing. "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 wrote.

The case reflects a broader wave of private securities class actions targeting crypto token issuers over the past several years, with plaintiffs' firms increasingly pursuing projects that launched tokens alongside AI or DAO narratives. Many such projects, even those with active development teams, have found that litigation costs alone can exhaust treasuries built during market highs.

He also rejected suggestions that he had personally profited, stating: "I never sold my ai16z, never made money other than a modest salary, making as much as our other engineers from essentially a day job."

From a $2.5 Billion Peak to a Legacy Contract Worth $358,000

The project launched on Solana on October 24, 2024, under the AI16Z ticker, pitching itself as a venture-style decentralized autonomous organization (DAO) governed by autonomous AI agents. The launch coincided with a surge of interest in AI agent tokens during the final months of 2024, a period that saw dozens of similar projects debut on Solana and other chains with multi-billion-dollar paper valuations within weeks of launch.

By January 2, 2025, the token reached its all-time high of $2.48, with a fully diluted valuation (FDV) exceeding $2.5 billion, according to CoinMarketCap data.

The project's original name, ai16z, closely resembled the shorthand used by venture capital firm Andreessen Horowitz (a16z). Andreessen Horowitz demanded the project stop using that name, which prompted a rebrand to ElizaOS announced by Walters in late January 2025.

The rebranding also triggered a token migration to a new ELIZAOS contract between October and November 2025, expanding the supply from approximately 1.1 billion to 11 billion coins. Legacy holders were offered a 1-for-6 swap.

The abandoned AI16Z contract currently trades around $0.00033, with a market value of approximately $358,000 — down over 99% from its all-time high. The successor ELIZAOS token trades around $0.00031, with a market cap of $2.91 million. It briefly reached an all-time low on August 5, trading near $0.0002954.

Burwick Law's Allegations

The lawsuit, filed in the U.S. District Court for the Southern District of New York, named Eliza Labs Inc., Walters, Sebastian Quinn-Watson, and the AI16Z DAO as defendants. The complaint alleged that at least 3,945 wallet addresses lost money in the project. Plaintiffs sought treble damages, disgorgement, and a constructive trust over traceable assets.

The plaintiffs claimed that the project marketed itself as being governed by an autonomous AI agent when it was in fact operated manually by humans. The complaint cited an October 30, 2024 Protos report that first raised questions about the "Marc AIndreessen" persona.

Burwick Law also alleged that the team leveraged the a16z brand to inflate demand and that the 2025 token migration allocated roughly 40% of the new supply to insiders and private investors. Walters has consistently disputed the substance of these allegations.

Walters' Next Steps

While Walters confirmed the token's end, he indicated the Eliza software itself would continue. "We're still building Eliza and the underlying OS, faster and better than ever, unburdened by all the bullshit and sidequests and pressure to launch launchpad #83837," he wrote.

The decision to jettison the token in favor of a pure open-source model places ElizaOS in a small but notable category of crypto-native projects that have pivoted away from token incentives entirely, betting that developer adoption alone can sustain the technology.

In a separate post published hours before the token announcement, Walters said he is "looking to collaborate with robotics, physical AI, and hardware companies." He described the project as a Linux-based agentic operating system for those sectors, noting it is MIT licensed and fully white-labeled.

Walters added that he would willingly set ElizaOS aside for a more advanced open-source agent system if one existed, but said nothing currently matches what his team has built.