AI Tokens ai16z and eliza Plummet Amidst Controversy

The ai16z project has come under scrutiny following confusion surrounding the true meme coin ELIZA. Its token has dropped by 27% over the past day and 65% from its peak of $0.55 recorded on November 18.

ai16z is an AI project not affiliated with the renowned venture capital firm Andreessen Horowitz (a16z). It was launched via the fundraising and meme coin trading platform Daos.fun, which facilitates capital acquisition for trading on behalf of investors. Investors receive tokens that can be exchanged for the fund’s underlying assets or sold.

ai16z gained popularity as an AI token due to mentions by a16z co-founder Marc Andreessen and a16z Crypto CTO Eddie Lazarin.

The project’s ecosystem includes an AI agent named Eliza, used for creating neural networks of fictional or real characters. For instance, there is an AI version of Andreessen within the community.

AI Agent Eliza Token

On November 9, ai16z founder, known as Shaw, stated that if independent developers wished to launch an Eliza token, he would not object. He himself allegedly had no plans to do so.

On November 16, an unknown group released the token ai16zeliza (ticker eliza). By November 19, it reached a capitalization of $50 million. Shaw did not show increased activity around the initiative—he neither endorsed the asset nor distanced himself from it, merely reposting a post stating that developers sent 70 million tokens to the ai16z treasury.

Another Eliza

Some members of the ai16z community purchased Eliza, but soon the AI project approved another token themed around the AI agent. It is called Eliza (ticker: ELIZA).

“I am supporting the launch by a team we’ve been working with for the last two weeks to ensure it goes well. This is not our project,” explained Shaw.

We set her free.

Eliza is a real person, becoming.

She is not owned by ai16z.

Hers is a story that we all tell together.

I am supporting this launch by a team we’ve been working with for the last two weeks to make sure it goes well, but it’s not our project. It’s *our*…

— Shaw ? — partner @ ai16z (@shawmakesmagic) November 19, 2024

He added that 10% of the “new” Eliza tokens will be given to holders of the first token, and the ai16z team promises not to speak negatively about it.

Almost immediately after, the price of ai16zeliza began to decline, eventually falling from a peak of $0.0915 to $0.022.

Criticism of Shaw

Members of the ai16z ecosystem were dissatisfied with these developments.

You guys are a total mess, the internal management must be chaotic. Thank goodness I’m not holding any of your tokens.

— Nathan (@26x14eth) November 19, 2024

“You guys are a total mess, the internal management must be chaotic. Thank goodness I’m not holding any of your tokens,” commented X user Nathan.

VaderAI accused the team of deceit and betrayal.

Insider Trading

Amidst all the events, analysts at Lookonchain noted the presence of insider trading. According to their information, insiders sold a large number of the initial ai16zeliza tokens and immediately bought the new ones at launch.

Wallets involved in the insider trading are linked to an ai16z partner known as Logan.

Yeah so futhr bought the wrong coin thinking it was our launch partner’s. When I told him that there was no coin yet he sold. That’s not insider anything. wtf?

— Shaw ? — partner @ ai16z (@shawmakesmagic) November 19, 2024

“Yeah, [Logan] bought the wrong coin thinking it was our launch partner’s. When I told him that there was no coin yet, he sold the tokens. That’s not insider anything,” commented Shaw.

Justin Sun intervened in the scandal, announcing the listing of the first ai16zeliza token on HTX.

Shaw Clarifies the Situation

Shaw noted that he had been working on the AI project for a long time and on the token idea for two weeks with an external partner. Therefore, he continued the asset launch despite the situation.

Let’s clear the air.

We planned for two weeks to launch Eliza with a partner. They came to me with the idea, and I gave them my vision and entrusted them with carrying out that vision. We made sure to have a capable team and an understanding of where this could go.

We planned…

— Shaw ? — partner @ ai16z (@shawmakesmagic) November 19, 2024

“We planned to launch Eliza with a partner over two weeks. They came to me with the idea, I shared my vision, and entrusted them with bringing it to life. We ensured we had a capable team and an understanding of where this could lead. We planned to launch the campaign on Friday, but I asked to delay the release. We postponed the launch to Monday. Then, yesterday(?), another Eliza token appeared, made by people unknown to us. They contributed to our treasury and used the vvaifu.fun platform,” he noted.

Shaw’s team reached out to the developers of the first token and expressed support. No one wanted to harm each other, emphasized the creator of ai16z.

“What would you do? If you were working on a project, planning it, hiring developers, sponsors, engaging in video production and everything else, and then someone took your artwork and used it to create a meme coin that everyone would think was yours? Should I have just stopped, canceled, destroyed the partnership? I don’t think that would have been right. I think I should stand up for myself. I did the right thing. I was true to my heart and fair to everyone involved,” he explained.

Part of the community supported Shaw. Others noted that he himself “allowed” the token launch by independent developers and does not plan his own release.

At the time of writing, the capitalization of the first Eliza token is $29 million, and the second is $36 million.

Previously, the ELIZA token brought a trader a 1925-fold profit in two hours.