Virtual Protocol is an AI x Metaverse Protocol that is building the future of virtual interactions. It launched in October 2024 on Ethereum Layer 2 Base, which is a leading platform for generating AI agents. It streamlines creating and deploying AI agents on the blockchain, offering users a unique opportunity to monetize their AI projects through tokenization and revenue sharing.
Learning about Virtual protocols involving AI agents is amazing because they combine traditional protocol structures (e.g., communication rules task frameworks) with AI’s adaptive and autonomous capabilities.
Virtuals Protocol is a launchpad enabling users to create, deploy, and tokenize AI agents without requiring technical expertise. The platform’s long-term vision is establishing an AI agent economy centered around revenue sharing and co-ownership through tokenization. Since revenue-sharing features are not fully operational, AI agent tokens on the platform are widely regarded as “AI meme coins.
Source www.coingecko.com
The Concept of AI Agents
To better understand what Virtuals Protocol is about, you must first be familiar with AI agents. AI Agents refer to systems or programs that can perceive and process their surroundings and execute various actions to achieve their objectives. Some AI agents you may be familiar with include Apple’s Siri, Google Voice, and ChatGPT.
Virtual protocol operates on a decentralized ecosystem that encourages the creation and use of AI agents (VIRTUAL). These agents integrate various core modules, including cognitive cores, voice and sound cores, and visual cores, enabling complex multimodal interactions.
AI agents have many applications, such as simplifying interactions with web3 and blockchain, automating trades, enhancing video gameplay, and much more.
How Does Virtual Protocol Enable the AI Agents Space?
Virtuals seek to democratize access to deployable AI agents by making it simple and accessible for non-technical users. Instead of needing coding skills, anyone can create an AI agent by simply describing its character and behavior, which will define how the agent operates. Virtuals provides an example of this process to illustrate its simplicity and ease of use.
An example of how a Virtuals Protocol AI agent works.
Virtuals Protocol’s First AI Agent, Virtual K-Pop Star, Luna
Luna is the inaugural AI agent created by the Virtuals team and designed to transform the AI entertainment industry. Additionally, Luna acts as the team’s flagship AI agent, playing a key role in testing and demonstrating the capabilities of their AI technology.
The Luna Token
As previously mentioned, Virtuals allows for the tokenization of AI agents. Currently, Luna is tokenized under the ticker LUNA, which should not be confused with Do Kwon’s Terra Luna despite sharing the same ticker. Virtuals’ Luna token can be purchased through the platform, with all trades routed through the protocol’s native token, VIRTUAL.
The long-term vision for the LUNA token is to function as a utility token linked to the AI agent Luna. However, the token has not been actively implemented or monetized, although this could change in the future. Despite this, it is live for purchase and has achieved an impressive market capitalization of $69 million.
The high valuation of the LUNA token is likely driven by speculation. It is Virtuals’s first official project, positioning it at the forefront of future developments. There is another reason to buy the Luna token, which I will cover later (hint: airdrops). However, since the token currently lacks utility, it shares similarities with other “sentient” AI crypto coins, such as GOAT, leading many to classify LUNA as a meme coin.
The VIRTUAL Token
The maximum total supply of the VIRTUAL token is 1,000,000,000 (1 billion). 60% of that (600 million) is currently in public circulation. Fifty million are set aside for liquidity provision, and 350 million tokens are set aside in the ecosystem treasury for future community initiatives. The team’s allocation of the VIRTUAL token is currently unknown; it is not displayed in their public documentation.
0x44ff8620b8ca30902395a7bd3f2407e1a091bf73 (Ethereum Mainnet)
0x0b3e328455c4059eeb9e3f84b5543f74e24e7e1b (Base)
Virtual’s Ultimate Goal of Revenue Sharing
Virtual’s end goal is to create a revenue-sharing ecosystem of AI agents where users pay to interact/use these AI agents, creating value for token holders of said agent tokens.
Revenue will be generated through monetized user engagement, technically referred to as “inference costs”, which is the compensation paid for the computational power used by a user requesting/using an agent’s services. This is another speculation point many holders of Luna have: interacting with Luna may be monetized in the future and bring significant profits to its holders.
Virtual Largest Token, Aixbt
Aixbt is an experimental AI agent launched on Virtuals in November 2024 by rxbt. It has a market capitalization of $168 million, the most significant token at the time of writing. aixbt’s digital avatar is that of a purple Pepe frog, and its current primary function is to track discussions on crypto Twitter (the crypto community on X), utilize its proprietary engine to analyze these discussions, and share potential market insights.
A snapshot of Aixbt’s Twitter page.
Virtual AI Agent Airdrops
The virtual team has officially endorsed and partnered with several AI agent projects, including Music, Pond Hub, and Seraph. These tokens have been airdropped to traders on virtuals, and a bonus allocation/multiplier is sometimes given to LUNA holders.
Music, Pond Hub, and Seraph have a market capitalization of $3, $4, and $17 million, respectively, combined, this value is roughly a third of LUNA. This means that LUNA holders have indeed profited nicely thus far from all these airdrops. However, there is no guarantee that there will be future airdrops by other agent projects to Virtuals traders or LUNA holders.
The Pump.fun of Base With an AI Twist
While Virtuals Protocol has technical focuses on AI agents, most projects have yet to monetize their agents. At this point, the team fully embraces memecoins in many ways similar to the Solana memecoin launchpad giant, Pump.fun. This can be seen with how their website overlaps and names when users click ‘Create a New Agent’. Users are directed to the AI agent token launch site, aptly named https://fun.virtuals.io/.
How to Create and Tokenize Your Own AI Agent
Now, let’s take a quick look at how anyone can create and tokenize their own AI agent.
Go to https://app.virtuals.io/ and connect your wallet.
Create New AI Agent’ followed by ‘Launch a New Token
You will be redirected to https://fun.virtuals.io/, connect your wallet and click ‘Create New Agent once more.
Give your agent a name, image, token ticker, and character description!
Here’s an example of a good character description; Once created, your agent’s data remains unchanged until it reaches a market capitalization of approximately $600,000.
Create your agent coin!
It’s important to note that deploying an AI agent incurs a fixed cost of 100 VIRTUAL tokens, equivalent to approximately $157 at current value.
Link to Buy Virtual https://www.coingecko.com/en/coins/virtual-protocol
Conclusion
Virtuals Protocol offers a distinctive product-market fit by leveraging the growing trends of both AI and meme coins. This unique combination has proven highly successful, as demonstrated by the significant market rally of the VIRTUAL token in late 2024. However, it is essential to recognize that Virtuals’ long-term vision of establishing a profitable agent ecosystem has yet to be achieved. This will be critical for the project’s sustained success.
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