In a chaotic trading session, two tokens bearing the same name, ELIZA, competed for dominance, with power and profits taking center stage.
Artificial Intelligence (AI) has long been touted as the future, but for now, it’s the human drive for profit that’s making waves in the crypto world. This week, the creators behind the much-hyped crypto project ai16z—a playful nod to the influential venture fund Andreessen Horowitz—learned this lesson the hard way.
Originally, the ai16z team had plans to launch a new AI-linked token named ELIZA. However, they were swiftly outpaced by another group who launched a competing ELIZA token days ahead of them. This led to an intense market frenzy, as the two coins, both branded with the same name, fought for attention.
The situation quickly escalated. The first ELIZA token, created by what seemed to be enthusiastic supporters of ai16z, saw its market cap plummet from $40 million to just $6 million in a mere 30 minutes, as panic selling took hold. Meanwhile, the new ELIZA token, backed by ai16z itself, skyrocketed from zero to a peak market cap of $100 million.
In the midst of this turmoil, individual traders lost large sums of money. The memecoin, which had hijacked the branding of the original ai16z project, was now a battleground for investors and speculators.
“We had a plan, and a story to tell, but we were faced with an impossible situation, being front-run on the very mascot character of our own brand,” said Shaw, the pseudonymous creator of ai16z, on social media platform X.
The “mascot” in question is Eliza, an open-source AI framework designed to interact with users on social media. On Tuesday, Shaw publicly endorsed the new ELIZA token and announced that a significant portion of its funds would be allocated to the ai16z treasury.
In his public statements, Shaw addressed the messy situation, offering a sort of “bailout” to early holders of the original ELIZA token. He promised that they would receive 10% of the new token’s supply, in an attempt to compensate for the massive losses they suffered.
Despite the turmoil, Shaw argued that the new token was essential for creating an ELIZA-linked asset that could grow independently of ai16z’s branding. This new token would allow ELIZA to build its own story and community, free from the constraints of the original project’s identity.
Ai16z is positioning itself as a significant player in the AI space, promoting itself as a venture fund run entirely by AI with the goal of “flipping” the venture giant Andreessen Horowitz. The project’s token, with a market cap exceeding $300 million, enables holders to influence the AI-powered decisions made by “Marc AIndresseen,” its AI leader.
Shaw made it clear that the new ELIZA token was not an ai16z project. Instead, it was created in collaboration with a third-party “partner” working alongside the ai16z team.
