An AI Agent Token Once Worth $2.4 Billion Is Now Worth Almost Nothing. This Is What You Need to Know About Investing in AI Cryptos.

On Aug. 4, the founder of an artificial intelligence (AI) agent crypto project once valued at $2.4 billion told his own investors to sell it, and declared the token dead. Its original token is now down more than 99.9% from its peak. The project, ai16z, named after the popular abbreviation for the venture capital (VC) fund Andreessen Horowitz, later renamed itself ELIZAOS after an early chatbot that launched on Solana (CRYPTO: SOL) in October 2024.

Its headline feature was an AI agent that held its own wallet and acted without a person approving each move. The agent was supposed to run a venture fund, with coinholders as partners who would be given some of the upside in return for their investment. Other AI agent tokens with similar feature sets launched right after it, and more are bound to come. Here's how to approach the segment if you're thinking about investing.

Image source: Getty Images.

Where the money went

The AI agent segment of crypto began just a couple of weeks before ELIZAOS did, and around the time that popular AI stocks were starting to run.

An AI-managed account called Truth Terminal posted its origin story on X, which prompted an unaffiliated developer to mint a coin around it, and it then exploded to a market cap of $1.2 billion within days. That sparked the launch of many copycats, of which ELIZAOS was the most successful. Generally speaking, most of the AI agent projects in the segment were effectively meme coins -- the most popular segment on Solana at the time by far -- despite their modestly more serious branding efforts at launch.

Buying these coins, including ELIZAOS, rarely resulted in holders owning a token that entitled them to any kind of rights. Nonetheless, ELIZAOS made one of the boldest offers in the segment, as holders could supposedly delegate their capital, and then the agent would supposedly pick the investments and then redistribute the profits accordingly. A proposed class action lawsuit now alleges that the user funds were advertised as autonomous and AI-run while human insiders were really at the helm.

The AI agents category was still worth about $3.2 billion as of Aug. 18, so the segment shrank rather than died after investors pulled their capital. Picks and shovels plays, like Virtuals Protocol, a launchpad for deploying agents, were materially better performers but still faced punishing downturns; the price of the Virtuals token is now 88% below its January 2025 high.

Nor did being the venue where most of the AI agent coins were launched lead to much in the way of financial returns. Solana collected fees on every new launch, but that didn't stop its price from collapsing to where it is now, 72% lower than its record high, so hosting the boom was ultimately not very valuable for investors.

What would have to change for newcomers to be investable

More AI agent tokens are bound to launch. When they do, investors should probably not touch them unless a few issues are settled ahead of time.

Tokenomics, the rules governing a token's value, supply, and any of its associated cash flows, are the main factor to watch.

Virtuals Protocol publishes the most serviceable version of agent tokenomics, wherein users pay per interaction with the agents on its network. That creates a very clear link between utilization of agents' services, whatever those may be, and the value of its native token, which is to say, the value that holders are exposed to. Even with this setup, it's critical to appreciate that value only increases if there's demand for the base asset.

Another key factor to look for is whether outsiders can see the money that an agent is handling.

If its wallet addresses aren't disclosed, and if the protocol's financials are not available to the popular crypto data providers, there's simply no way to tell whether any funds delegated to the agent are being used to good effect, nor is there a way to tell whether the developer team is skimming money or misrepresenting the tokenomics.

Therefore, until there are coins that offer good tokenomics, a decent business model, and financial auditability, investors should probably skip the AI agent coin segment entirely. They may not need to wait very long for it to be worth revisiting, though; the next wave of projects is already in development.

Alex Carchidi has positions in Solana. The Motley Fool has positions in and recommends Solana. The Motley Fool has a disclosure policy.