ElizaOS (formerly ai16z) has plummeted from a peak market cap of $2.7 billion to nearly zero today.
Written by: Ma He, Foresight News
The crypto bear market is rife with disputes.
On August 16, Shaw, a key figure at ElizaOS (formerly ai16z), posted on X accusing baoskee, a core member of daos.fun, of using insider information to sell large amounts of ai16z during the project's rebranding and token migration. Related wallets made a total profit of approximately $6.655 million.
baoskee quickly responded, calling Shaw "completely insane" and leveling a series of counter-allegations.
Insider Trading During the Rebranding Controversy
baoskee is a core member of the token launch platform daos.fun, and ai16z is just an Agent project deployed on daos.fun.
Shaw detailed the sequence of events in his tweets. On June 3, 2025, baoskee publicly announced that the Snapshot voting mechanism would "go live this week"; on June 19, baoskee reaffirmed this commitment. The voting mechanism was crucial because a16z had previously explicitly required the project to change its name to avoid trademark disputes and potential lawsuits. Shaw pointed out that baoskee had full control over the execution wallet at the time but claimed that voting had to be implemented first for the token-holding community to decide whether to rebrand.
Shaw said the voting mechanism was not effectively launched as promised. After a16z formally contacted the project and demanded a name change, baoskee instead sold all ai16z from the daos.fun execution wallet. Shaw emphasized that baoskee had internal information unavailable to other holders and was in a unique position to avoid legal risks. Since the team could not complete the official rebranding via voting and lacked effective control over the token, the project was forced to undergo a painful and value-destroying migration to ElizaOS.
The migration took a lot of time and triggered strong community dissatisfaction. Shaw further stated that even though the migration was planned and baoskee was aware of it, the latter still dumped his ai16z into the market, causing the price to drop.
According to Shaw's data, baoskee's related wallets sold approximately 42.18 million ai16z through multiple transactions, making a profit of about $6.655 million with a cost of only around $3,863. Shaw clearly stated that relevant Solscan on-chain records would be attached at the end of the article as evidence, adding that a16z had been extremely restrained and friendly throughout the process—the project put the other party in a passive position, but a16z handled the trademark issue in the most friendly way. Shaw explained that no one expected ai16z to become popular quickly, but once it did, a16z had to actively defend its trademark, otherwise it might lose future protection rights.
In subsequent interactions, Shaw also clarified that he was not the founder of daos.fun, but just "pressed the button for ai16z."
baoskee's Response: Delete Your Tweets and Check Into a Mental Hospital
baoskee posted a response tweet within hours of Shaw's post. He opened by saying "this industry is full of疯子 (insane people)", then directly targeted Shaw and dismantled his narrative almost point by point.
baoskee first accused Shaw of previously using the ai16z brand to launch and rug-pull over a dozen projects on pump.fun, turning a meme token originally belonging to the community into a正经公司 (serious company), only to fall into a serious copyright infringement quagmire. He further pointed out that under Shaw's leadership, this largest AI agent token from the previous cycle plummeted from a multi-billion dollar market cap to only six figures. Then Shaw launched a second token, using the new token to rug the old one, directly causing massive financial losses for users.
Regarding the Snapshot voting dispute, baoskee clearly refuted: the voting mechanism was actually launched and the website is still accessible today, and daos.fun paid out of its own pocket to add and lock over $1 million in liquidity for ai16z. He then brought up other old accounts of Shaw, saying the latter had sued Elon Musk and Twitter for various absurd reasons, and tried to incite Burwick Law to sue them, only to be counter-sued by the other party using the information he provided. Finally, baoskee accused Shaw of losing nearly tens of millions of dollars in development funds over the past two years with almost no truly valuable products to show for it.
He concluded by saying that his side runs the most honest launchpad on Solana, yet Shaw had the nerve to post such a thread, and advised Shaw to delete his tweets and check into a mental hospital.
2.7 Billion Market Cap, Lawsuit, and Final Zeroing
To understand this fierce conflict, we must go back to ai16z's development trajectory. The project launched on Solana in October 2024, initially positioned as an AI-driven decentralized venture capital-style fund with the Eliza AI agent framework. The project name deliberately played on the梗 (meme) of a16z, quickly becoming a leading标的 (asset) in the AI agent narrative that year.
According to GMGN data, ai16z's market cap exceeded $2.7 billion in early January 2025, making it one of the highest-valued AI-related tokens in the Solana ecosystem at the time.
Trademark issues soon emerged. a16z demanded the project change its name to avoid confusion and legal risks. The project rebranded to ElizaOS around January 2025, but the token symbol remained ai16z for some time. The team then推进 (pushed forward) token migration. Holders could exchange ai16z for elizaOS at a 1:6 ratio; the new token supports multi-chains and实现 (achieves) cross-chain via Chainlink CCIP. After migration, the total supply increased from approximately 6.6 billion to 11 billion.
Shaw emphasized in his accusation that it was precisely because the voting mechanism failed to be effectively implemented as promised that the team could not complete the official rebranding via community voting, forcing them onto the value-destroying migration path. The migration itself also sparked dissatisfaction among some holders regarding dilution and governance, and subsequent lawsuits against the foundation emerged.
In April this year, crypto law firm Burwick Law tweeted that it had filed a federal class-action lawsuit (case number 1:26-cv-03238) in the U.S. District Court for the Southern District of New York (SDNY) against the creators of AI16Z and ElizaOS (defendants including Walters), accusing them of violating consumer protection laws, false advertising, and unjust enrichment.
Legal documents show that the defendants allegedly misappropriated the brand reputation of Silicon Valley's well-known venture capital firm a16z to fabricate the image of an artificial intelligence technology startup, and issued a token named AI16Z (later renamed ELIZAOS) on the Solana blockchain on October 24, 2024. The project claimed to have AI agents with autonomous investment funds, but was actually operated manually and generated no revenue during the class-action lawsuit period.
In early August this year, Shaw publicly announced that the token was "completely dead" and stated that the Eliza Foundation had reached a settlement (details not disclosed) in the lawsuit with former holders (involving Burwick Law), with remaining treasury funds used for settlement and the foundation entering liquidation. Shaw clearly stated that he no longer holds or supports the token, will continue to focus on the development of open-source Eliza software, and completely exit the meme coin and token issuance game.
ElizaOS's market cap has fallen back to around $380,000, almost zero.
Insider Trading Remains Rife
This public confrontation is essentially a post-mortem清算 (settlement) of governance failure, concentrated control, and information asymmetry.
Highly concentrated execution wallets, the promised Snapshot voting failing to truly function, and the high temporal overlap between major non-public information (trademark pressure and migration plans) and selling behavior—these are recurring structural issues in current AI agent and meme narrative projects. Regardless of the final factual determination, token holders have endured the result of falling from a multi-billion dollar market cap to almost zero.
In February 2026, on-chain detective ZachXBT publicly accused a senior employee of Solana trading platform Axiom of abusing internal backend permissions to view users' private wallet addresses and track transaction behaviors,涉嫌 (allegedly) using this non-public information to trade meme coins for profit. The platform subsequently responded that it had launched an internal investigation. Later, ZachXBT exposed the LAB token project: insiders controlled over 95% of the supply, created false hype through paid KOLs and market makers, pushed the valuation to billions of dollars, then unilaterally extended the lock-up period for public sale participants from 3 months to 9 months while insiders sold freely.最终 (Eventually), the token fell by over 99% from its peak, trapping a large number of retail investors.
People with key permissions or internal information make self-serving operations that harm ordinary holders around major project nodes (rebranding, migration, launch, or peak hype), then fall into public confrontation or investigation afterward. Opaque governance, concentrated control, and disconnect between promises and execution remain old problems repeatedly上演 (played out) in the current crypto market.
The final cost is often borne by the community.