Written by: 0xJeff, Head of @steak_studio
Translated by: BlockBeats deep
Editor's Note: The article analyzes the strategy of Virtuals platform's veVIRTUAL staking and point game. It introduces the latest token economics update, emphasizing alignment of long-term stakers with protocol interests, and warns against fully locking tokens to maintain liquidity. The author suggests earning 100,000 to 400,000 Virgen points daily, locking 10,000 to 50,000 $VIRTUAL, flexibly responding to market fluctuations while selecting high-potential projects to maximize returns.
Below is the original content (slightly edited for readability):
This is a concise article sharing my thoughts on veVIRTUAL staking and how to play the points game.
If you've been active in the Virtuals trenches recently, you might have noticed that the team just launched one of the most significant updates ever:
Integrated Kaito, launched a comprehensive Yapper leaderboard, incentivizing top Yappers and Kaito stakers with points.
Updated token economics, introducing veVIRTUAL (20% of points now allocated to veVIRTUAL stakers, not holders).
The token economics change makes long-term supporters (those willing to lock $VIRTUAL) more aligned with the protocol (Virtuals and the agent team). This new dynamic reminds me of the xGRAIL token economics (during the ARB season) and the ve(3,3) token economics when Velodrome and Aerodrome emerged on OP and Base.
Since 2021, navigating various narratives and waves, I've learned that maximizing token locking in any scenario (especially in ve tokenomics models) is unwise.
Why?
Looking back, $VIRTUAL's value comes from transaction fees from trading activity on its platform. The more projects launch and existing projects innovate with exciting features, the more people will be excited to trade on Virtuals.
Then there are "Virgen points", essential for Genesis launch, earned by actively trading on Virtuals, holding/diamond handing agent tokens, and holding $VIRTUAL (before the latest change). $BIOS became the prime example, with its hundredfold surge continuously attracting builders and traders into the Virgen trenches, solidifying the flywheel effect.
Virgen points have now been established as "digital gold", valued between $0.012 to $0.034 per point (if you earn 100,000 points daily and invest in successfully launched projects, you could earn $1,200 to $3,400 daily).
Now... here's why I say maximum locking is a bad idea:
No launch platform remains hot forever—hype and narratives ebb and flow, influenced by multiple factors. While the Virtuals team has proven to be narrative masters, no one knows how long the current Virtuals wave will last.
There's a "sufficient" threshold for daily point acquisition (per wallet). For example, if you max lock 150,000 $VIRTUAL, getting 150,000 veVIRTUAL, earning 1.5-1.8 million points daily. Brother, you don't need that many points.
There are hidden liquidity costs. In a cycle, tokens might surge (or drop) significantly. When it's rapidly rising, if you can't profit, you can't realize gains. Then the token drops because nothing is eternal. All good things end, and the key is capturing maximum value.
To reiterate—looking at this table, point reward returns heavily depend on the quality of projects you invest in, the hype around them (how many points are invested), and how high the post-launch FDV can rise. Project selection is crucial in this game. The better you choose, the more value you can capture from points.
How Much $VIRTUAL Should You Lock? What's the Strategy?
Assuming $AXR as worst-case (requiring 4 million points for full allocation), earning 400,000 points daily for a week to week and a half should suffice. This equals locking 50,000 $VIRTUAL for two years.
Assuming $WHIM as baseline (requiring 820,000 points for full allocation), earning 100,000 points daily should be enough. This equals locking 10,000 $VIRTUAL for two years.
The rule of thumb is to earn 100,000 to 400,000 points daily to ensure sufficient points for medium to high-intensity launches within a week or week and a half.
Whether to max lock part of $VIRTUAL or mid-term lock all $VIRTUAL depends on you. But ensure maintaining both liquid and illiquid assets, staying flexible, and realizing profits when $VIRTUAL continues rising.
Specific Gameplay
I only max lock a small portion (5-10%) of $VIRTUAL as veVIRTUAL to ensure enough points for full allocation in high-intensity launches, keeping 95% liquid to realize profits when the market recovers.
Assuming I earn 250,000 points daily, make decent project choices, and exit at the right moment, with each point valued at $0.022 = $5,500 daily -> breakeven in just 5 days.
In the worst-case scenario of $0.010 per point, that's $2,750 daily -> breakeven in just 9 days.
I plan to select only the most point-valuable projects for short-term operations while diamond-handing tier-one projects. The ultimate goal is accumulating more $VIRTUAL, viewing the Genesis launch platform/Virgen points as a place and mechanism for generating $VIRTUAL token returns.
Those interested in my future choices can check my latest Substack article 'The After Hour EP.2', where I share analysis of three projects I'm about to invest in.
Ensure you know what you're doing. Calculate before making decisions. Don't max lock all assets due to FOMO—that's the worst decision.
Remember, investing in Virtuals agents is more like "trading" than tech investing (at least for now), you're investing in extremely low-cap micro-projects with potential for massive surges.
