Author: Nancy, PANews

After the MEME coins such as GOAT, ACT and LUNA became popular, the AI Agent trend is now sweeping from the tech circle to the crypto market, and all kinds of gold diggers are flocking in, creating a lively scene.

CoinGecko data shows that as of December 6, the total market value of AI Agent tokens has exceeded $10.2 billion, accounting for about one-fifth of the total market value of the crypto AI track. Virtuals Protocol is a star project in this trend, which is an AI Agent issuance platform for games and entertainment launched on Base in January this year. Its token VIRTUAL has soared from tens of millions of dollars to over $1.8 billion in just over two months.

Recently, PANews interviewed Wee Kee, the co-founder of Virtuals Protocol, to deeply explore his entrepreneurial journey, product planning, and insights into the development trend of AI Agent.

Transforming from a gaming guild to an AI Agent platform, the token price once dropped by 99% during the downturn

In this halving cycle, the price of Bitcoin broke through the $10,000 mark, and the believers ushered in a new stage of victory. The halving event is an important footnote in the development history of Bitcoin, and each time it has profoundly reshaped market perception and driven the industry to continuously move forward.

In 2016, the second Bitcoin halving occurred, which was also the year Wee Kee entered the cryptocurrency world. That year, Wee Kee was studying at Imperial College London, one of the world's top technology universities, and began buying Bitcoin and Ethereum. However, after graduating in 2017, Wee Kee did not immediately join the crypto industry, but chose to work in traditional well-known companies such as Boston Consulting Group.

Fast forward to 2021, the outbreak of the blockchain gaming track attracted attention from both inside and outside the industry, and Wee Kee co-founded the gaming guild PathDAO at this time, which was the predecessor of Virtuals, and successfully raised $16 million in financing with a valuation of $600 million. However, the entrepreneurial journey is always winding and deep. As the blockchain gaming track almost collectively went silent, PathDAO also faced severe challenges, and the token price even plummeted by 99%, with the market value dropping to as low as $6 million. Subsequently, PathDAO began to explore multiple business lines, including project incubation, dating app development, the sale of NFT-integrated clothing, and game production, but the market did not respond positively, which also greatly demoralized the team.

"The drop in token price and the market's lack of recognition of our products dealt a huge blow to the team's morale, but as a founder, I had to boost the team's morale even when I was deeply confused in my heart," Wee Kee admitted in the interview, saying that at many critical moments, founders need to demonstrate an irrational optimism.

In 2023, ChatGPT led the AI technology to sweep the globe, showcasing its "money" prospects, and countless entrepreneurs were inspired to join the fray. Wee Kee also jumped in and transformed into the current AI Agent platform. Currently, Virtuals' team has expanded to about 20 people, mainly based in Malaysia, and has also gathered members from London, Singapore and other places.

The Japanese virtual UP Vtuber is the inspiration for Virtuals' launch, "If these virtual idols are combined with AI, can we further explore their value efficiency, and does it mean there will be more room for profit?"

In Wee Kee's view, the advantage of the combination of crypto and AI Agent lies in the innovative model of profit sharing, where users around the world can participate in the operation of AI Agent and profit from it by investing in specific cryptocurrencies, especially for those who have difficulty accessing traditional bank accounts can participate through crypto wallets. Under this framework, AI Agent can achieve global value flow, and once it becomes profitable, it will bring considerable returns to investors. At the same time, AI Agent can have its own crypto wallet, which brings great potential and innovation, such as allowing each AI Agent to collaborate with other AI Agents to obtain profits while focusing on its own expertise, and create more possibilities.

Looking at Virtuals' flagship AI virtual idol LUNA, which has over 500,000 followers on TikTok, its token market value has already exceeded $66 million, and its market exploration model has been recognized by the market.

Benchmarking the AI model market Bittensor, not the AI Agent version of Pump.Fun

Virtuals' success is not only due to the courage to transform and the deep insight into the AI market, but also the right timing, location and people.

In terms of timing, in the past two months, as the value of MEME coins like GOAT and ACT soared, the market's focus has gradually shifted to the AI Agent track, with unprecedented market heat. The rise of this trend has also gradually brought platforms like Virtuals into the public eye, attracting more attention and investment.

However, the shift of market attention brought about by price fluctuations is also an undeniable challenge. "The MEME market rotates extremely fast, but the core focus of the Virtuals community is not limited to MEME, but focused on the actual applicability of the AI Agent they have created. Even facing price fluctuations, there are still users willing to pay for these AI Agents with practical value, which provides a guarantee for the stability of its ecosystem.

In the choice of public chain, Base provides a unique "geographical advantage" for Virtuals' development. At the beginning of 2024, Virtuals decided to build on Base, when the latter's ecosystem was still in its early stage. Wee Kee shared several important reasons for choosing Base in the interview: first, Base is the only public chain backed by the US-listed company Coinbase, and the election of Trump as US president also provided greater development space for crypto in the US; second, Base does not issue its own token, which provides greater flexibility for the empowerment of Virtuals' protocol token; third, although Base's performance in TVL and DAU is not as good as Solana's at present, Solana's competition is already quite fierce, and Base has more room for growth in comparison. In addition, Wee Kee emphasized that Base attaches great importance to the builder culture, which can better attract technical teams like AI to join, and Base's official also provided Virtuals with technical and marketing support. He also revealed to PANews that Base still has a lot of room for development, and there are currently no plans for multi-chain deployment, but the possibility is not ruled out in the future.

The transition of Virtuals' products from the "test field" to the broad commercial "field" fully demonstrates the high recognition of its products. Due to the innovative application of token issuance to the deployment of AI Agent, Virtuals was once considered by the market as the AI Agent version of Pump.Fun, but Wee Kee does not agree with this view, stating that Virtuals' core KPI is not to issue as many tokens as possible, but to attract high-quality teams to participate.

In Wee Kee's view, from the perspective of community members, they hope to find an excellent project and enter at a reasonable price to achieve value discovery. If the market is full of frequent hot spots and chasing, it will bring huge psychological pressure to the community members. Therefore, Virtuals is more focused on how to attract and support excellent AI teams, and more focused on long-term value building and stable ecosystem development, rather than simply chasing short-term market hot spots. In a sense, Virtuals' competitors are more inclined towards the AI model market Bittensor.

At the same time, Wee Kee also revealed that Virtuals will soon launch a new product called "Agent Society". According to his description, in this concept, each AI Agent has its own wallet and unique expertise, and they drive value exchange through trading and collaboration, forming a self-running economic cycle.

In order to enhance community activity and developer participation, Virtuals has also introduced the LaunchPad platform Agentstarter, providing creators with an efficient and fair way to bring new AI Agents into its ecosystem. Currently, Virtuals is focusing on two important development directions: one is to find excellent AI teams and incubate more AI Agents with the potential for a $1 billion valuation; the other is to go to Hong Kong, Paris, New York and other places next year to attract outstanding AI teams to join the Virtuals ecosystem.

At the end of the interview, for AI Agent entrepreneurs and practitioners, Wee Kee shared a few valuable experiences and suggestions: First, it is necessary to clarify the target user group of AI. Taking Virtuals as an example, it will provide services to other AI Agents, by directly observing the user needs in the Agent ecosystem, thereby enhancing its own visibility, because these users will actively explore and use the Agent you have developed; secondly, it is necessary to strengthen exchanges with more encryption teams, deeply understand the culture and dynamics within the circle, so as to better integrate into the ecosystem and capture more growth opportunities.