The Death of ai16z: Crypto AI woke up early but arrived late

Author｜David, Shenchao TechFlow

ai16z, do you still remember this name?

If you do, it means you experienced the AI coin craze in the crypto circle at the end of 2024. If you don’t remember, that’s normal; the AI Agent token category has been quiet for a long time.

Crypto x AI, in the current version where AI tools are gradually being implemented and rapidly advancing, seems too much like a pseudo-concept and an outdated toy.

Today, Shaw Walters, the founder of the Eliza OS project, published a very long article, stating that the ai16z token is completely dead, the foundation has closed, there will be no buybacks, and holders should handle it themselves.

He suggests you either sell it or "find a group of people to pump it up," but don’t expect him to do anything more.

The tone of this letter doesn’t sound like a founder gracefully announcing the termination of a project; it sounds more like someone slamming the door in disappointment after cursing everyone out. He referred to the crypto community as "a bunch of spoiled crybabies," saying that a law firm is suing him on behalf of the token holders. The Eliza OS foundation doesn’t have the money to fight the lawsuit and has spent all its remaining funds.

Shaw also mentioned that he once had 25 million dollars worth of ai16z tokens, never sold a single one, and watched it go to zero; now he lives off his savings in a shabby little bedroom in San Francisco, writing code every day.

From his perspective, he might think he was developing in a murky market with an idealistic vision, ultimately left with a heart full of ruin, disappointment, and anger.

The author does not intend to judge these personal emotions. But standing at the crossroads of shifting trends, industry focus, and the rise of AI, the shutdown of Eliza OS inevitably evokes a sense of lament------

Crypto x AI truly got up early but arrived late.

One Step Ahead, Immersed in the Wave

In October 2024, ai16z launched crowdfunding on DAOs.fun, aiming to raise 420.69 SOL, equivalent to about 75,000 dollars, to create an AI self-managed investment fund.

420.69, those familiar with crypto culture know this is a meme number. From the choice of fundraising amount, the underlying tone of this matter was already set.

But it really took off.

In less than three months, ai16z's market cap soared to 2.6 billion dollars. It also spawned an entire category, with GOAT leading the way and VIRTUAL following, various Agent concept tokens emerged one after another, and the entire AI Agent track grew from zero to nearly ten billion dollars.

In concept, crypto indeed got ahead.

By the end of 2024, what was the situation in the AI market? ChatGPT had just turned two, often criticized for its various hallucinations; Claude still didn’t have tools to operate computers directly, and most people’s understanding of "AI Agent" remained at the conceptual level.

However, the crypto market had already set a price for this concept.

But there was a detail that not many people paid attention to at the time.

Less than a week after ai16z launched, a crypto media outlet published a report questioning that the core AI Agent of the ai16z project, which claimed to make autonomous investment decisions, "Marc AIndreessen," was actually operated by a person behind the scenes, rather than a true Agent thinking for itself.

This doubt later also arose regarding the well-known crypto market analysis Agent aiIxbt.

At that time, such doubts were unlikely to cause any ripples or FUD. The market cap continued to rise, the community continued to cheer, and new AI Agent tokens continued to be issued…

Looking back, this might be the most precise reflection of the entire crypto AI narrative. Truth and falsehood do not matter.

In an environment of overflowing liquidity, a leading version of the narrative is enough to spark a speculative wave.

Conceptual authenticity, directional alignment, but tokens exist before products, and prices exist before technology ------ this is the essence of crypto getting ahead.

The Future Has Arrived, Yet It Has Nothing to Do with Us

In 2026, AI Agents truly arrived.

In the West, there are CodeX and Claude; in the East, there are competitors like Workbuddy that are more suitable for the domestic market. Looking back at the narrative that lived in the white papers during the crypto AI hype------such as automatically analyzing market trends, handling workflows, monitoring public opinion, etc.------has actually completely become a reality.

This might be one of the few grounded narratives in the crypto industry, aside from stablecoins.

But the ones realizing them have changed.

It’s Anthropic, it’s OpenAI, it’s those teams writing code in San Francisco and Hangzhou. Money flows to aggregation platforms like OpenRouter, to the GPU bills of cloud service providers, to every real API call that is running.

Another line from Shaw's long article evokes endless sentiment:

"There are no such problems over there in AI. The people there are optimistic, powerful, building the future instead of tearing each other down. Those are my people."

A person who once ignited the crypto AI Agent narrative concludes that this industry is incompatible with AI?

Objectively speaking, the current successful AI applications or large models indeed have no reason to issue tokens. Anthropic charges for subscriptions and API calls, OpenRouter has a turnover of over 100 million a year from its intermediary business. These companies have never issued tokens or built DAOs, but their business models work, and developers vote with their feet; the bills are the best consensus mechanism.

In contrast, the situation of crypto AI projects is quite harsh.

When token prices are supported, everything seems to be there------the treasury has money, the community has people, the narrative has heat. Once the price collapses, everything disappears simultaneously. Developers leave because the purchasing power of salaries paid in tokens has shrunk by 90%, and the community turns into a rights protection group. Those who want to do serious work may eventually find that the project can’t even afford to hire an engineer.

Ironically, the Eliza framework in his hands hasn’t actually died. The code is still being updated, and companies are negotiating collaborations on it. An open-source AI framework can survive without issuing tokens; whether it sells services or gets acquired, the path is much broader than that of tokens.

Even more poignant is that the open-source AI framework Eliza, which originated from crypto, recently had active contributors, surprisingly including Claude.

An AI developer and project that does not tie to tokens may be worth more in the 2026 market than when it was tied to tokens.

Embrace Change

As a crypto practitioner, seeing once-hot projects fall one by one is inevitably lamentable.

But lamenting does not mean being completely pessimistic.

The crypto AI narrative has indeed shattered into pieces. But what has shattered is the path of "issuing tokens for AI concepts"; the possibilities between crypto and AI have not been completely severed.

The few surviving projects are doing things completely different from ai16z. For example, Bittensor is building a decentralized AI computing power market, and Render is creating a distributed GPU rendering network. They are using tokens to coordinate a real computing resource, and there is still a certain market, just without the premium and persuasiveness of a bull market.

In addition, on-chain data analysis, vulnerability scanning, whale wallet tracking, public opinion monitoring, DEX contract strategies------AI is gradually being implemented and making an impact in these scenarios. In 2026, a professional crypto trader opening Hyperliquid will likely have a Claude or GPT-supported strategy window open beside them.

This also means that the relationship between crypto and AI has not ended, but the direction needs to be reversed.

AI empowering all scenarios has become a political correctness, and crypto can similarly be covered. As for how big the crypto pie still is, that may depend on when BTC can recover.

For individuals, what should be done is to embrace change.

A developer who sheds the burden of tokens is worth much more in today’s AI world than what tokens can offer; and a crypto player who solidly embraces AI can clearly gain much more than the previous rough-and-tumble model.

Being in crypto often allows one to see the direction ahead------or perhaps we just got our positions reversed.