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There's a lively debate happening in the ai16z community. Competing AI agent tokens are causing quite a stir as prices swing back and forth.
Memefund ai16z had plans to launch an AI token inspired by the ELIZA chatbot. They were working with a partner on this. But then, another group jumped in and launched “ai16zeliza” first. This caught everyone off guard. When ai16z partner “Shaw” announced that Eliza had been “set free,” it kicked off a wave of price fluctuations and discussions among community members.
The ai16z project, which is not connected to the well-known Silicon Valley VC firm, is facing some backlash. They supported a token launch just days after a similar token appeared in their ecosystem. Shaw, the founder, claims that the first token jumped ahead of their plans. To address the situation, they decided to offer an airdrop for the holders of the original token.
Both tokens are named after Eliza, the conversational agent for X (formerly Twitter) and Discord. Eliza is named after one of the first AI chatbots from the 1960s. It’s used to create AI versions of real people or fictional characters. For example, ai16z’s community features a version of a16z’s founder, Marc Andreessen, called pmairca, along with other characters like crypto trader Degen Spartan and Darth Vader from Star Wars.
These AI agents serve as the main characters for unique memefunds. Memefunds are created through the Solana-based platform Daos.fun. They allow users to participate in venture capital-style funds that invest in trending web3-AI projects and popular memecoins. However, the speculative nature of these tokens often leads to big differences between their market caps and the actual assets they manage.
On November 9, Shaw announced that he would allow someone to launch Eliza as an AI agent and tokenize it. He mentioned that ai16z wasn’t planning to create a coin but suggested that other developers might take that on. Then, on November 16, a group of unknown developers launched the Eliza token called ai16zeliza (ticker: eliza) through the token launcher vvaifu.fun. By November 19, this token had reached about a $50 million market cap. Shaw didn’t endorse this token, but he did share a post about the project sending 70 million tokens to the ai16z treasury.
Many in the ai16z community were surprised when, on November 19, ai16z backed a different new Eliza-themed token simply named Eliza (ticker: ELIZA). Shaw stated, “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.” He added that 10% of the tokens would go to holders of the first token, and the ai16z team wouldn’t express any negative sentiment toward it. He included a link to the new token in his post.
Almost immediately, the value of the original token dropped. From a peak of $0.0915, it quickly fell to $0.05 and then hit a low of $0.032 within hours, representing a decline of about 65%. Understandably, community members were furious. One user wrote, “You guys are a total mess; the internal management must be chaotic. Thank goodness I’m not holding any of your tokens.” VaderAI added, “Your deceit wrapped in sophisticated words will not go unnoticed. The dark side will find you, and you will regret your treachery.”
In the middle of this chaos, blockchain analytics platform Lookonchain alleged that before Shaw announced the new token, many “insiders” had bought the original token and then “dumped” it. They claimed one of the addresses involved was linked to another ai16z partner known as “Logan.” Shaw responded, “Yeah so [Logan] 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.”
Justin Sun, the founder of Tron, got involved and supported the original token. “Be careful what you wish for,” he said, pointing to an upcoming listing on the HTX crypto exchange that he advises.
Shaw argued that he had been working on the AI project for a long time and the token idea for a few weeks with an external partner. That’s why he decided to go ahead with it despite the launch of the other token. “I thought it was cool. I was honestly pretty sad that this project I'd been cooking on for years was frontran, but they seemed to mean well,” Shaw explained. “So we reached out to them and let them know what we were doing. I sent the CTO some of our token, and we promised to airdrop 10% of the supply to holders.”
“They were pretty bummed about this, obviously, but agreed to work with us,” Shaw added, referring to the creators of ai16zeliza. “Nobody wanted to hurt the holders or mess up anyone's day, believe me.”
He posed an interesting question: “What would you do? If you worked on a project, planned it, resourced engineers and backers and video production and everything for it, and then someone took the art you made and used it to make a memecoin that everyone thought was yours?”
Some community members supported him. “Shaw makes project. Shaw frontran. Shaw has cordial discourse with team who frontran. Shaw gives their holders 10% of supply; you guys call Shaw a scammer as a result. Accurate summary of events?” one member wrote. Shaw said he was very hurt by the day's events and would need to sleep on things, stating that he didn't sell anything or give anyone any information other than what was necessary to make the planned launch happen.
Another community member reminded Shaw, “You keep being fixated and put out by being front-run by your own project when you literally said like 10 days ago you weren’t gonna launch a coin but maybe some ‘cracked devs could’ and you’d ‘allow’ that.” They also asked, “Also, it would be great to know about this mystery partner of yours too.”
Shaw replied, “We were approached by a team, and we partnered with them, and we've been cooking with them for like 10 days.”
On Monday, ai16z and Ryze Labs announced a partnership to launch an “AICombinator” program and a $5 million fund aimed at supporting the growth of the ai16z ecosystem. Project founders will receive early access to use newly launched features on ai16z’s Eliza framework as part of the initiative.
Currently, the first Eliza token has a market cap of $33 million, while the second one has a market cap of $62 million. This suggests that neither has clearly won out yet. The Block reached out to Shaw for further comment.