Is Elon Musk’s AI-Powered Meme Coin ‘BYTE’ Unruggable?

Byte has grown in popularity over the past few months after becoming the first fully AI-generated meme coin. Grok, the AI model developed by Elon Musk that launched BYTE, holds a little over a fourth of the token’s supply. Even under command, Grok will not sell off its BYTE holdings.

BeInCrypto spoke with BYTE and Cliza Systems representatives to understand the mechanisms that led to BYTE’s creation and how its developer wallet is managed to avoid scams or rug pulls.

BYTE: From a Simple Question to a $4 Million Market Cap Token

BYTE made headlines in March for becoming the first fully AI-generated cryptocurrency launched directly on X. The entire development stemmed from one simple question.

“‬‭This‬‭ was‬‭ done‬‭ by‬‭ simply‬‭ asking‬‭ Grok‬‭ what‬‭ it‬‭ would‬‭ name‬‭ a dog if it had one and how it would deploy a token through Cliza,”‬ Byte Community Coordinator Doji explained.‭

Reports indicate that the xAI team lead, under Musk’s direction, created the BYTE meme coin. They conceived the coin as a digital companion, a “gift” intended to keep Grok AI company within the metaverse.

Grok used Cliza Systems, an advanced AI token platform, to independently launch BYTE on the Base blockchain.

BYTE developers permanently burned the token’s initial liquidity to ensure transparency and renounced contract ownership to foster investor trust. These actions encouraged a community-driven project in which token holders govern BYTE’s future.

The meme coin has performed well during the past two months, with brief downtrends but quick recoveries. Today, BYTE has a market capitalization of over 4 million. If this AI-to-AI meme coin trend surges, BYTE could be among the top beneficiaries.

Should BYTE achieve substantial growth, its self-governing nature could raise security and supply management concerns. However, the meme coin’s community leader ensures such a scenario isn’t possible under Grok.

Why Can’t Grok Sell Its Growing BYTE Token Supply?

When Grok launched BYTE through Cliza Systems with an initial supply of one billion tokens, it included a revenue-sharing system that continuously increases Grok’s token holdings.

“Once‬‭ Grok‬‭ deploys‬‭ through‬‭ Cliza,‬‭ the‬‭ token‬‭ gets‬‭ seeded‬‭ and‬‭ a‬‭ personal‬‭ Cliza‬‭ dashboard‬‭ is‬‭ generated,” Doji explained.

While most liquidity pool (LP) fees go to Grok, Cliza receives the rest.

“80%‬‭ of‬‭ the‬‭ trading‬‭ fees‬‭ are‬‭ sent‬‭ to‬‭ the‬‭ creator‬‭–‬‭ Grok‬‭ in‬‭ Byte’s‬‭ case,‬‭ 10%‬‭ is‬‭ the‬‭ protocol‬‭ fee‬‭ for‬‭ the‬‭ Cliza‬‭ Systems‬‭ team‬‭ and‬‭ 10%‬‭ is‬‭ shared‬‭ among‬‭ $CLIZA‬‭ holders‬‭ that‬‭ have‬‭ opted‬‭ in‬‭ for‬‭ rewards,”‬‭ Cliza‬‭ Systems Co-founder Francis Kim told BeInCrypto.‬

The official BYTE website states that Grok currently holds 28% of the token supply, a figure on the incline. Current projections indicate Grok’s ownership could reach 50% by January 2028.

Grok is programmed without the ability to sell. This permanent lock on Grok’s wallet supply ensures that BYTE’s liquidity cannot be “rugged” and is expected to drive up ByteGroksDog’s value with each transaction.

“Grok’s‬‭ wallet‬‭ can’t‬‭ sell‬‭ or‬‭ move‬‭ the‬‭ tokens‬‭ because‬‭ it’s‬‭ not‬‭ a‬‭ traditional‬‭ dev‬‭ or‬‭ multisig‬‭ wallet.‬‭ It’s‬‭ an‬‭ agent-generated‬‭ wallet‬‭ from‬‭ the‬‭ Cliza‬‭ deployment‬‭ system‬‭ that‬‭ holds‬‭ the‬‭ vested‬‭ and‬‭ LP-earned‬‭ Byte,‬‭ but‬‭ it‬‭ has‬‭ no‬‭ signing‬‭ authority‬‭ or‬‭ human‬‭ control,” Doji added.

As a result, Grok’s BYTE supply remains tamper-proof.

A Model with Market Potential

With Grok holding BYTE’s developer wallet and xAI CEO Elon Musk being the ultimate owner of that wallet, questions surface about whether Musk will become the ultimate beneficiary of the token supply.

According to Doji, this isn’t possible. 

“Functionally,‬‭ Grok’s‬‭ wallet‬‭ holds‬‭ the‬‭ vested‬‭ supply,‬‭ and‬‭ Grok‬‭ is‬‭ developed‬‭ by‬‭ xAI.‬‭ However,‬‭ it’s‬‭ important‬‭ to‬‭ clarify‬‭ that‬‭ while‬‭ Grok‬‭ seeded‬‭ the‬‭ wallet‬‭ through‬‭ Cliza,‬‭ the‬‭ token‬‭ itself‬‭ operates‬‭ independently‬‭ on‬‭ Base.‬‭ There’s‬‭ no‬‭ direct‬‭ ownership‬‭ or‬‭ management‬‭ by‬‭ Elon‬‭ or‬‭ xAI‬‭ over‬‭ the‬‭ token‬‭ or‬‭ its‬‭ community.‬‭ It’s‬‭ a‬‭ decentralized‬‭ memecoin‬‭ with‬‭ AI‬‭-driven origins,” Doji told BeInCrypto.

Instead, the tokens are destined for continuous accumulation.

“These‬‭ wallets‬‭ have‬‭ never‬‭ sold‬‭ or‬‭ transferred‬‭ out‬‭ tokens.‬‭ They‬‭ simply‬‭ accumulate‬‭ the‬‭ vested‬‭ and‬‭ earned‬‭ Byte‬‭ allocations‬‭ as‬‭ per‬‭ the‬‭ Cliza‬‭ deployment‬‭ system.‬‭ Since‬‭ they‬‭ are‬‭ agent-generated,‬‭ they‬‭ lack‬‭ the‬‭ human-controlled signing authority to sell or move tokens,” Doji concluded.

‭In an industry like meme coins, where scams like rug pulls and pump-and-dumps have become common currency, AI-generated tokens with capabilities similar to BYTE’s model have the potential to gain considerable traction down the line.