Author: David, Deep Tide TechFlow
ai16z, do you remember that name?
If you do, you experienced the AI coin frenzy in the crypto world at the end of 2024. If you don't, that's normal too; the category of AI Agent tokens has been quiet for a long time.
In the current version where AI tools are gradually landing and advancing rapidly, "crypto x AI" seems too much like a pseudo-concept and an old-fashioned toy.
Today, Shaw Walters, founder of the Eliza OS project, published a very long post. The gist is that the ai16z token is completely dead, the foundation is shut down, there will be no buybacks, and token holders should handle it themselves.
He advises you to either sell it or "find a group of people to pump it," but don't expect him to do anything more.
The tone of this letter doesn't sound like a founder gracefully announcing the end of a project, but more like someone slamming the door in disappointment after cursing everyone out. He calls the crypto community "a bunch of spoiled crybabies" and says a law firm sued him from the token holders' perspective.
And the Eliza OS Foundation has no money to fight the lawsuit and used up the remaining funds to settle.
Shaw also says he once had $25 million worth of ai16z tokens in his wallet, didn't sell a single one, and watched them go to zero; he's now living off savings in a shabby little bedroom in San Francisco, writing code every day.
From his perspective, he perhaps sees himself as someone trying to develop with an idealistic spirit in a toxic market, ending up with nothing but wreckage, disappointment, and anger.
The author has no intention of judging these personal emotions. But standing at the crossroads where hotspots shift, industry focus moves, and AI rises, the shutdown of Eliza OS inevitably makes one sigh that "crypto x AI" truly arrived too early for the party.
A Step Ahead, Riding the Wave
In October 2024, ai16z launched a crowdfunding campaign on DAOs.fun, aiming to raise 420.69 SOL, roughly $75,000, to create an AI-autonomously managed investment fund.
420.69 – those familiar with crypto culture know it's a meme number. Starting with the choice of fundraising amount, the underlying tone of this venture was already set.
But it really took off. In less than three months, ai16z's market cap surged to $2.6 billion. It also sparked an entire category: GOAT came first, VIRTUAL followed, and various Agent concept coins emerged endlessly. The entire AI Agent track grew from zero to nearly $10 billion.
Crypto is indeed a step ahead in concept. What was the AI market like at the end of 2024?
ChatGPT had just turned two, often criticized for its hallucinated answers; Claude didn't yet have tools to directly operate computers; most people's understanding of "AI Agent" was still at the conceptual level. The crypto market had already priced this concept.
But there was one detail few paid attention to at the time.
Less than a week after ai16z launched, a crypto media outlet published a report questioning whether the core AI Agent of the ai16z project – the one claiming to make autonomous investment decisions, "Marc AIndreessen" – was actually operated by humans, not a true Agent thinking for itself.
This same skepticism later arose regarding the well-known crypto market analysis Agent aiIxbt.
Back then, such doubts could hardly cause any waves or FUD. Market cap kept rising, the community kept cheering, new AI Agent tokens kept launching... Looking back, the author sees this as perhaps the most precise microcosm of the entire crypto AI narrative.
Truth or falsehood didn't matter. In an environment of liquidity overflow, a narrative one version ahead was enough to spark a speculative frenzy.
Concept guaranteed authentic, direction guaranteed correct, but tokens existed before products, price existed before technology – this is precisely the essence of crypto being a step ahead.
The Future Has Arrived, But It Has Nothing to Do with You
In 2026, AI Agents are truly here.
In the West, there's CodeX and Claude; in the East, there are products like Workbuddy and others more suited to the domestic market. Looking back at the narratives that lived in whitepapers during the crypto AI hype wave – like automatically analyzing markets, handling workflows, monitoring public opinion – these have all become reality.
This might be, besides stablecoins, one of the few realized narratives within the crypto industry.
But the ones realizing them are a different group. It's Anthropic, it's OpenAI, it's teams writing code in San Francisco and Hangzhou. Money flows to aggregation platforms like OpenRouter, to cloud providers' GPU bills, to every single API call that actually runs.
Another sentence from Shaw's long post evokes infinite emotion:
"AI doesn't have these problems. The people there are optimistic, powerful, building the future instead of tearing each other down. Those are my people." Someone who once ignited the crypto AI Agent narrative concludes in the end that this industry is incompatible with AI?
Objectively speaking, none of these successful current AI applications or large models have any reason to issue tokens.
Anthropic charges via subscriptions and API calls, OpenRouter's relay business has an annual turnover over $100 million. These companies never issued tokens, never built DAOs, but their business models work, developers vote with their feet, and bills are the best consensus mechanism.
Conversely, the situation for crypto AI projects is quite brutal. When token prices were high, they seemed to have everything – a treasury with money, a community with people, a hot narrative. Once the price collapsed, everything vanished simultaneously.
Developers left because the purchasing power of token-based salaries shrank by ninety percent; the community turned into a rights protection group. Those who genuinely wanted to build might find the project couldn't even afford to hire one engineer.
And ironically, the Eliza framework itself in his hands isn't dead. The code is still being updated, companies are discussing collaboration on it. An open-source AI framework can survive without issuing tokens – selling services, getting acquired – its paths are much wider than a token's.
What's even more lamentable is that among the active contributors to the Eliza open-source AI framework, which originated in crypto, in the past week, was actually Claude.
In the 2026 market, an AI developer or project without a token attached might be worth more than one with a token.
Embrace Change
As someone in the crypto industry, seeing once-hot projects fall one by one is inevitably melancholic.
But sentiment doesn't mean complete pessimism.
The crypto AI narrative is indeed shattered. But what's shattered is the path of "issuing tokens for AI concepts." The possibilities between crypto and AI haven't been completely severed.
The few projects still alive are doing things completely different from ai16z. For example, Bittensor is building a decentralized AI compute market, Render is working on a distributed GPU rendering network.
They both use tokens to coordinate a real computational resource, which still holds a certain market, though bull markets grant more premium and persuasiveness.
Furthermore, within the circle, on-chain data analysis, vulnerability scanning, whale wallet tracking, public opinion monitoring, DEX contract strategies – AI is gradually finding its place and creating value in these scenarios.
In 2026, when a professional crypto trader opens Hyperliquid, a strategy window powered by Claude or GPT is most likely open beside it. This also means the relationship between crypto and AI isn't over, but the direction needs to reverse.
AI empowering all scenarios has become a political correctness; crypto can equally be covered. As for how big the crypto pie still is, that might depend on when BTC gets better.
On a personal level, what one should do is embrace change. A developer shedding the token burden is worth much more in today's AI world than what tokens can offer; and a crypto player solidly embracing AI can obviously obtain greater benefits than the previous rough-and-tumble model.
Being in crypto, we often see the direction a step ahead, or perhaps we've just mistaken our own position.
