1. Project Introduction
1. Basic information of the project
Founded in 2021, Virtuals Protocol is an AI Agent generation platform based on blockchain technology that aims to allow anyone to create an AI agent, a virtual character that can interact and engage with the environment like a human. Virtuals Protocol's vision is to completely change the way virtual interactions are done by creating hyper-personalized and immersive experiences.
The project was officially launched in 2023. The core vision is to achieve decentralized co-ownership of AI agents through blockchain technology and promote the widespread application of AI in games, entertainment, and the metaverse. Virtuals Protocol's AI agents have multimodal interaction capabilities (text, voice, 3D animation) and can run seamlessly on multiple platforms, such as Roblox, TikTok, and Telegram games.
2. Project development history
The development of Virtuals Protocol can be divided into the following important stages:
2021: PathDAO, the predecessor of the project, was established, focusing on game guilds and GameFi investments. PathDAO has accumulated rich resources and experience in the GameFi field, laying the foundation for subsequent transformation.
2023: As ChatGPT leads AI technology to become popular around the world, PathDAO officially transforms into Virtuals Protocol, focusing on the combination of AI and blockchain, and deploying smart contracts on the Base chain. This transformation marks the project's transition from traditional GameFi to AI-driven blockchain protocols.
2024: Virtuals Protocol launches its first AI agent, Luna, which has gained more than 500,000 followers on TikTok, demonstrating the commercial potential of AI agents. Luna's success not only verifies the technical feasibility of the project, but also provides valuable experience for subsequent AI agent development. Currently, more than 1,000 AI agents have been created on Virtuals Protocol.
At the end of 2024: Virtuals Protocol is launched on several well-known exchanges, and the market value of the token $VIRTUAL soars from tens of millions of US dollars to more than 3 billion US dollars in more than two months, marking the official entry of the project into the mainstream cryptocurrency market and gaining widespread attention and recognition.
3. Core Team Background
The Virtuals Protocol team is composed of a group of young people with experience in consulting, blockchain, AI and gaming. The core members include:
Jansen Teng: Co-founder and CEO, graduated from Imperial College London in 2018, participated in the establishment of ThinAir Water, DIAM Digital Marketing, Aidaro and other companies, and worked at Boston Consulting Group (BCG).
Wee Kee: Co-founder, obtained a bachelor's degree from Imperial College London in 2017 and a master's degree from London Business School in 2018. He participated in the establishment of Aidaro and also worked at BCG Consulting.
Other members include Matthew Tang, Josh Wang Khang Hwu, Hardeep Meghera, Armielyn Obinguar, Weixiong Tay, Charan Rao, Joshua Moh, etc. Most of the other team members are from Malaysia and other Southeast Asian regions. Their educational backgrounds include Cambridge University, Imperial College and other prestigious universities, and they have work experience in well-known companies such as Accenture, Grab, Shopee, etc. The team's technical strength and industry resources provide a strong guarantee for the success of the project.
2. Business Model
1. Operation mode
Virtuals Protocol adopts a decentralized operation mode, with blockchain as the underlying infrastructure, and uses smart contracts to ensure the transparency, fairness and immutability of various interactive behaviors in the ecosystem. Users can easily create their own AI agents through the simple operation interface provided by the platform. These AI agents have unique properties and functions. For example, some agents are good at writing articles, while others are excellent in image design.
In terms of business model, on the one hand, the platform charges users a certain fee for creating and managing AI agents, and the fee standards are differentiated according to the complexity of the agent and the amount of resources occupied. For example, creating an agent with basic functions may only cost 10 VIRTUALs, while creating an agent with advanced functions and capable of handling complex tasks requires 100 VIRTUALs. On the other hand, the platform encourages developers to develop various derivative applications based on the Virtuals Protocol. For high-quality applications, the platform will cooperate with them through revenue sharing and other means to jointly promote the prosperity and development of the entire ecosystem. At present, there are about 20 different types of derivative applications on the platform that are under development or in the trial operation stage.
2. Ecosystem construction
The Virtuals Protocol ecosystem consists of the following layers:
Ø Protocol layer: Provides AI models and algorithms to support developers in creating and deploying AI agents. The protocol layer is the technical core of Virtuals Protocol and determines the performance and functionality of AI agents.
Ø DApp layer: allows decentralized applications (DApp) to integrate AI agent functions, such as NPCs in games and virtual influencers in social media. The DApp layer is the application scenario of Virtuals Protocol and determines the market potential and user scale of AI agents.
Ø Contributor Network: Data contributors, validators, and developers receive $VIRTUAL rewards by contributing data and models. The Contributor Network is the community foundation of Virtuals Protocol and determines the sustainability and development momentum of the project.
3. Token Economics
$VIRTUAL is the core token of Virtuals Protocol, with a total supply of 1 billion, distributed as follows:
Ø 60%: Public Distribution
Ø 35%: Ecosystem Treasures
Ø 5%: Liquidity Pool
The main uses of the tokens include:
Ø Basic assets: used to create new AI agents and liquidity pools
Ø Payment tool: Users pay the AI agent’s service fee through $VIRTUAL
Ø Governance: Token holders can participate in protocol governance and resource allocation decisions
The token economics model is designed to increase the scarcity and value of $VIRTUAL through deflationary mechanisms and community incentives. For example, part of the AI agent's revenue is used to buy back and burn tokens, thereby reducing the circulating supply and driving the token price up.
3. Project Prospects
1. Industry analysis
The AI Agent industry is currently in a stage of rapid development. According to a research report by iResearch Consulting, the global AI Agent market has been expanding at an average annual rate of 40% in recent years. Behind this is the strong market demand for intelligent services. Whether it is the enterprise side hoping to improve office efficiency and optimize business processes through AI agents, or individual users expecting to use AI agents to assist in creation and provide personalized life services, all of these have driven the rapid development of the industry.
In the future, with the continuous advancement of AI technology, especially breakthroughs in key technology fields such as natural language processing and image recognition, the functions of AI Agent will become more powerful and the application scenarios will be further expanded. It is expected that the market size will triple again in the next five years, from the current US$10 billion to US$30 billion. Virtuals Protocol is in such a blue ocean market with great growth potential.
2. Competitor Analysis
( 1 ) AgentX
AgentX is one of the earliest AI Agent projects in the industry. It has accumulated a large user base with more than 100,000 users and has reached cooperation with many large companies such as Microsoft and Amazon. It has a strong influence in the field of enterprise-level AI services.
However, the disadvantage of AgentX is that it adopts a relatively traditional centralized architecture, which has certain limitations in data privacy protection and user ownership of AI agents, and this is where the decentralized advantages of Virtuals Protocol stand out. For example, in a user survey related to data privacy, more than 70% of users said they prefer to choose a data processing method with decentralized protection.
( 2 ) Altered State Machine ( $ASTO )
Altered State Machine is a platform for creating and training artificial intelligence agents that power the creation and training of AI-driven NFTs that can interoperate across the metaverse. The ASM protocol enables individuals and organizations to own, train, and grow artificial intelligence through a revolutionary genome mining and intelligence mining process. Altered State Machine's vision is to become the ownership and monetization protocol for AI using NFT technology.
Compared with ASM, Virtuals Protocol has advantages in decentralized governance and cross-platform integration, while ASM shows its uniqueness in the evolutionary NFT of AI brain, but its stability and performance in large-scale applications and complex scenarios need to be further verified. The huge gap between the two can also be seen from the token market value: $ASTO's circulating market value is only US$20.36 million, and its fully diluted valuation (FDV) is US$85.34 million (data as of December 29, 2024), both of which are only about 1%-3% of the corresponding market value of $VIRTUAL.
( 3 ) Olas Network ( $OLAS )
Olas Network (also known as Autonolas) is a framework that bridges the gap between artificial intelligence and blockchain. The project aims to coordinate ecosystem contributors and capital investors through the form of DAO, using token economy to make Olas Network a unified network that includes off-chain services such as AI, oracles, and cross-chain communications. Although Olas Network is active on social media, its community size and influence are relatively small.
Currently, the circulating market value of $OLAS is US$115 million, and the fully diluted valuation (FDV) is US$848 million (data as of December 29, 2024), both of which are approximately 3%-24% of the corresponding market value of $VIRTUAL.
3. Development plan
Virtuals Protocol has a clear development path. In the short term, it plans to continue to optimize the platform's user experience and lower the technical threshold for creating AI agents in the next 6 months. The goal is to increase the number of users on the platform by another 50% to around 15,000, while enriching the application scenarios within the ecosystem and introducing high-quality partners from different fields.
The mid-term goal is to expand the international market, especially in Europe, America, Asia Pacific and other key regions to increase market promotion efforts, and to enhance the international visibility of the project through developer conferences, online and offline technical seminars, etc., and strive to have $VIRTUAL listed on more mainstream cryptocurrency trading platforms to enhance its liquidity and market value. It is planned to cover the business in at least 10 major countries and regions by the end of 2025.
In the long run, we are committed to becoming the world's leading ecological platform integrating AI and blockchain, building a vast digital world covering various AI intelligent applications, achieving deep integration with multiple fields of the real world, and driving the development and transformation of the entire industry.
IV. Conclusion
Through a multi-dimensional in-depth analysis of Virtuals Protocol, we can see that the project has shown strong development potential in the field of AI Agent and blockchain integration. It has a core team with diverse professional backgrounds, a solid technical foundation, a unique and feasible business model, and a clear development plan.
In terms of token valuation, its token $VIRTUAL has multiple uses, including payment, governance and liquidity provision. The token economic model is well designed and has long-term appreciation potential. Considering the high growth expectations of its industry, the continuous improvement of its own ecology and its dominant position in market competition, combined with the current valuation level of similar projects and other indicators, $VIRTUAL still has room for valuation growth in the long run. However, based on the current market situation and project development trend, especially the sharp increase in the token market value in the short term, investors are advised to buy with caution.
Looking ahead, with the continuous innovation of AI technology and the continuous expansion of blockchain applications, the industry that integrates AI Agent and blockchain to which Virtuals Protocol belongs is expected to usher in greater explosive growth. Virtuals Protocol, with its first-mover advantage and technology and ecological accumulation, is expected to stand out in this industry transformation and become a key force in leading the development of the industry, bringing a richer, more convenient and intelligent digital life experience to global users.
