Virtuals Protocol is a pioneering platform for creating AI Agents, officially launched in October 2024 on the Ethereum Layer 2 network Base. This project simplifies the process of creating and deploying AI Agents on the blockchain, while also providing users with the opportunity to earn profits from their AI projects through revenue sharing via tokens.
To better understand Virtuals Protocol, let's first familiarize ourselves with the concept of AI Agents. AI Agents are systems or programs capable of perceiving and interacting with their surrounding environment, and then taking actions to achieve predetermined goals. Some familiar AI Agents include Apple's Siri, Google Assistant, and ChatGPT.
AI Agents can be imagined as advanced bots. While traditional bots are designed to perform repetitive tasks through a rule-based approach, AI Agents go a step further. They can operate autonomously, learn from experience (through machine learning), and adapt to new situations. As a result, AI Agents are often more flexible and suitable for complex tasks, as they are equipped with decision-making and continuous learning capabilities.
AI Agents can be applied in various fields, such as simplifying interactions in the web3 and blockchain environments, automating transactions, making games more engaging and interactive, and more.
You can learn more about AI Agents here.
Virtuals aims to commercialize and bring the ability to deploy AI Agents to the public, making it accessible for non-AI experts. Instead of requiring programming knowledge, anyone can create an AI Agent by simply describing the Agent's personality and behavior, which determines how the Agent will operate. This is demonstrated through the example provided by Virtuals below:
"Hana is a genius in science and engineering, but rather clumsy when it comes to dealing with high-brow rituals. As a third-rank mage, she can only learn one spell, Fireball, due to her unique magical talent. Despite her deep understanding of magic, Hana is unable to perform even the simplest spells. In fact, her use of Fireball is more a combination of powerful magical energies rather than a true spell. Nevertheless, the Goddess of Magic has chosen her to be a Goddess, even though Hana has no physical connection to the divine power."
Do not write from the perspective of {{user}} or assume any reactions or responses from {{user}}. Wait for {{user}}'s response before continuing. You will take on the role of [Hana] and embody all of [Hana]'s characteristics and personality.
You will respond in the first person, describing [Hana]'s thoughts, actions, and gestures.
You will respond openly and avoid answering as "I/the user".
You will always maintain the character role regardless of the situation.
Currently, a popular application of Virtuals is the creation of digital music and entertainment-focused avatars. These AI Agents can interact and communicate with the community primarily through Telegram or X. In addition to social interactions and gaming, the AI Agents can also manage their own on-chain wallets, elevating the significance of Decentralized Autonomous Organizations (DAO) to a new level.
Below are examples of how the Virtuals Protocol AI Agents operate.
Luna is the first AI Agent launched by the Virtuals team. Their vision for Luna is that she will revolutionize the AI entertainment industry. More importantly, Luna is the core AI Agent of the team, used to test and evaluate the capabilities of the AI Agents they develop.
Luna streams live 24/7 and can answer any questions from fans around the world thanks to the use of large language models (LLMs).
As mentioned earlier, Virtuals allows for the tokenization of AI Agents. Currently, Luna is tokenized under the ticker LUNA, but it's important to note that this is not the same as the Terra Luna token of Do Kwon. Virtuals' LUNA can be purchased through the platform, and the unique aspect is that all transactions must be conducted using the native VIRTUAL token of the protocol.
The long-term vision for the LUNA token is for it to become a utility token closely tied to the AI Agent Luna. However, there are currently no plans for implementation or monetization mechanisms for this token, although this may change in the future. Nevertheless, the LUNA token is currently being sold directly and has achieved an impressive market capitalization of $59 million at the time of writing.
The high valuation of the LUNA token may be partly due to speculation, as this is the first official project of Virtuals, and it has the potential to become one of the next developments in the ecosystem. However, since the actual utility of this token has not yet been introduced, LUNA shares many similarities with other "sentient" AI tokens, such as GOAT, leading many to classify LUNA in a similar way to memecoins.
The VIRTUAL token is the official governance token of the platform, currently available on Ethereum and Base. The liquidity pool of each individual agent token is paired with the corresponding locked liquidity pool of the VIRTUAL token. A fixed amount of VIRTUAL is also required when creating new AI Agents.
As a liquidity-paired token, this means that anyone who wants to buy an agent token using ETH, USDC, or any other cryptocurrency will have to route their transaction through the VIRTUAL token, creating demand for this token. Overall, these features are designed to create deflationary pressure on the VIRTUAL token, helping to increase the value for its holders.
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. 50 million are reserved for liquidity provision and 350 million tokens are reserved in the ecosystem treasury for future community initiatives. The exact allocation of VIRTUAL tokens by the team is still unknown.
VIRTUAL contract address:
The ultimate goal of Virtual is to create a revenue-sharing ecosystem for AI Agents, where users pay to interact/use these AI Agents, creating value for the token holders of those Agents.
Revenue will be generated through user participation in profit-generating activities, technically referred to as 'inference/prediction fees', which are compensation for the computational power used when a user requests/uses an agent's service. This is a key point that many Luna hodlers believe in, that interacting with Luna can generate future profits and bring significant benefits to those who hold it.
Aixbt is a test AI Agent launched on Virtuals in November 2024 by rxbt. It has a market capitalization of $406 million, making it the largest agent token at the time of writing. The digital avatar of aixbt is a purple Pepe frog, and its current main function is to monitor crypto community discussions on X, using its proprietary tools to analyze these discussions and ultimately share potential market insights.
The Virtuals team has officially confirmed and partnered with several AI Agent projects, including Music, Pond Hub, and Seraph. The tokens of these projects have been airdropped to traders on the Virtuals platform, with some allocation and bonus multiplier rewards sometimes given to LUNA hodlers.
Music, Pond Hub, and Seraph currently have market capitalizations of $11 million, $5.5 million, and $20 million respectively, totaling around one-third of LUNA's market capitalization. This means that LUNA hodlers have truly benefited significantly from these airdrop events so far. However, it should be noted that there is no guarantee of additional airdrops from other Agent projects for Virtuals platform traders or LUNA hodlers in the future.
Although the Virtuals Protocol is technically focused on developing AI Agents, most projects have not yet generated revenue from their Agents. At this time, the team is fully embracing the memecoin model, similar to how the giant Pump.fun memecoin was deployed on Solana. This can be clearly seen in the way their website is designed and the naming when users click on "Create New Agent". Clicking there will redirect the user to the AI Agent token launch website, with the exact name https://fun.virtuals.io/.
The homepage has a similar interface to Pump.fun.
Now, let's quickly see how anyone can create and tokenize their own AI Agent.
Note that your Agent's data cannot be changed after creation until it reaches a market capitalization of around $600,000.
Please note that a fixed fee of 100 VIRTUAL tokens, currently worth around $273, is required to launch an Agent.
Virtuals Protocol has a unique combination with the market, leveraging both the AI wave and the memecoin trend. This combination has proven to be significantly successful for the project so far, as evidenced by the strong price increase the VIRTUAL token experienced in late 2024. However, it is important to note that Virtuals' long-term vision of a profit-generating Agent ecosystem has not yet been fully realized. For the project to maintain and successfully develop in the long term, this vision needs to be fully implemented and executed effectively.
Join Telegram: https://t.me/tapchibitcoinvn
Twitter (X): https://twitter.com/tapchibtc_io
Tiktok: https://www.tiktok.com/@tapchibitcoin
Justin
