Eliza founder: Token ‘dead’ as foundation winds down

Eliza Labs founder Shaw Walters announced that the project’s native token is “dead” and that the Eliza Foundation will wind down after a settlement with token holders used the project’s remaining funds.

Walters wrote on X that the team settled with plaintiffs represented by Burwick Law because the foundation lacked the money to continue a prolonged legal fight. He said the settlement consumed the foundation’s cash and treasury.

The project began on Solana in October 2024 as ai16z and was presented as an AI-run decentralized autonomous organization intended to automate venture capital decisions. The token reached an estimated market capitalization of about $2.5 billion in January 2025. The project later rebranded to ElizaOS after a dispute over the original name.

In April, a class-action complaint filed in the U.S. District Court for the Southern District of New York alleged false advertising, deceptive business practices, negligent misrepresentation and unjust enrichment. The complaint claims the token was marketed as a governance token for an autonomous, AI-managed venture fund while insiders maintained control. It also alleges the project used another firm’s branding without permission and that a subsequent token migration expanded supply from 1.1 billion to 11 billion, diluting existing holders.

Walters called the plaintiffs’ claims “ridiculous” but wrote that the foundation had insufficient capital to defend the case, so it settled by turning over its remaining funds. He denied taking significant personal profit and said he received a modest salary comparable with other engineers. Walters wrote that he owns the project’s intellectual property and plans to “start over” without any native token. He added, “I am never letting a token come close to Eliza again.” He also wrote, “I don’t own any tokens. I don’t support any of it.”

Despite ending the token and winding down the foundation, Walters said development of the open-source ElizaOS AI agent framework will continue. He wrote, “Gonna keep building no matter what, every single day, and I’m not gonna stop until we live in a world where we each own our own data and we don’t have to pay to be smart.” He closed his post with, “Eliza is dead. Long live Eliza.”