“Power and profits took center stage in a confusing morning.”, — write: www.coindesk.com
Artificial Intelligence (AI) might one day be humanity’s downfall, but in the meantime, humans are doing a pretty good job marketing it for their profit.
The creators of crypto’s latest AI darling project, “ai16z” (a cheeky riff on the prolific venture fund Andreessen Horowitz), found that out the hard way this week. They planned to reveal a brand-new token associated with their AI creation, called ELIZA. Instead, they were front-run by someone else doing it first.
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A chart-flipping crypto-trader brawl erupted. Suddenly, there were two ELIZA coins: one created days ago by apparent fans of ai16z and another, brand-new coin endorsed by the creator of ai16z.
The old coin, which had grown to a market cap of $40 million, dropped to $6 million in 30 minutes of frenzied selling, while the new coin blasted from nothingness to a peak of $100 million.
Along the way, individual traders lost tens of thousands of dollars and more on a memecoin that had swiped its branding from a better-known project that had copied the branding of one of the world’s best-known VCs.
“We had a plan, and a story to tell, and we were faced with an impossible situation, frontrun on literally the mascot character of our own brand,” ai16z’s pseudonymous creator, who goes by Shaw, said on X.
That mascot character is Eliza, an open-source framework for AI characters that can interact with people on social media. On Tuesday, Shaw “set her free” and endorsed the new ELIZA token, whose sanctioned creators have pledged to give a valuable chunk to ai16z’s treasury.
In public calls on X, Shaw defended the messy chain of events. He said the old Eliza token’s early holders would receive 10% of the new token—a de facto bailout for being obliterated on their original investment.
Instead, Shaw insisted the new token was “essential” in creating an ELIZA-linked asset unshackled from ai16z’s branding that could live beyond it, and become bigger, with its own stories and lore, and influence over a wave of AI characters.
Ai16z is attempting to position itself as a prominent entity in the AI wave. It bills itself as a venture fund completely managed by an AI agent with the goal of “flipping a16z.” Holders of the project’s token (which has a market cap north of $300 million) will be able to influence the project’s AI chieftain, “Marc AIndresseen,” according to its website.
Eliza’s new token is “not an ai16z project,” according to Shaw. Instead it’s the creation of a different, unnamed “partner” that he said is working with the ai16z team.
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