The AI Agent market continues to heat up, with Virtual and AI16Z becoming industry leaders.

In early 2025, the AI Agent market continues to maintain a strong growth momentum. By early January, the overall market value has surpassed $16.9 billion, an increase of approximately 22.7% compared to the previous week. In this blue ocean, two major platforms have emerged as industry benchmarks.

Virtuals Protocol, as the main AI Agent issuance platform on the Base chain, has a platform token VIRTUAL with a market capitalization exceeding 5 billion USD, placing it among the top 40 cryptocurrencies. Meanwhile, in the Solana ecosystem, the venture capital institution ai16z managed by AI Agents has also surpassed a market value of 2.5 billion USD. These two protocols have their own characteristics and different development paths.

Development History

Virtuals Protocol: From Gaming Guilds to AI Agent Issuance Platform

The protocol was established by a Malaysian team in 2021, initially focusing on trading business. Subsequently, the team seized the opportunity in the gaming guild market and raised $16 million in financing with a valuation of $600 million in December 2021, founding the gaming guild PathDAO, which is also the predecessor of Virtuals Protocol.

However, the gaming guild market encountered a downturn from 2022 to 2023, with their token valuation dropping from $600 million to $6 million. The team began to transform into a Venture Studio, trying multiple project directions. Although they did not achieve success, they realized the immense potential of AI.

In 2023, the team proposed a comprehensive transformation into the AI field, gaining 90% member support. In 2024, they explored AI Gaming on the Base chain and launched the platform in February. Although the initial attempt was unsuccessful, the team achieved several breakthroughs in the AI field, including the world's first Roblox AI RPG and other innovative projects like AI games without a game engine.

Ultimately, the success of the GOAT project has boosted the enthusiasm across the entire sector, providing an excellent development opportunity for the Virtuals Protocol.

AI16Z: From Web 2 AI to Web 3 AI

The founder of AI16Z, Shaw, currently resides in San Francisco. His career began in game development, later transitioning to the AI field, focusing on the development of AI Agent technology. Before founding AI16Z, he participated in several AI-related projects and has experience in areas such as Web3, VR, and AR.

The turning point of the project came from an idea called "AI version degen Spartan". This AI's performance on social media has subverted people's stereotypes about AI, and its sharp and highly individualistic remarks have attracted widespread attention.

Through industry connections, Shaw gradually formed the idea of creating AI investors. His vision is to build a fully autonomous, trustworthy investment system that serves the community.

AI16Z set a fundraising target of 4,420 SOL when it launched, and it was sold out in just 20 minutes, showing strong market interest in this innovative model.

Product Kernel

Virtuals Protocol: AI16Z's IOS

Virtuals Protocol serves as an issuance platform for AI Agents, functioning similarly to certain existing platforms, but its uniqueness lies in the use of the platform token $VIRTUAL as the trading pool. The more AI Agents created on the platform, the more $VIRTUAL is directly empowered, and buying or selling AI Agent tokens will consume at least 1% of $VIRTUAL.

In addition to tokenomics design, the Virtuals Protocol has also established a common standard for its AI Agent tokens, emphasizing precision and careful planning. The platform offers the AI Agent framework GAME, which supports autonomous operation, processes inputs, and generates responses, while also learning from past interactions.

In terms of products, Virtuals Protocol provides relevant development tools for its AI Agents, ensuring that its tokens do not deviate too much from the parent protocol, leading to a more complete overall ecosystem. Its model is quite similar to that of a well-known mobile operating system.

AI16Z & ELIZA: The Open System in the AI Field

AI16Z is a fund managed autonomously by AI, using a hybrid strategy that combines AI autonomous operation with community interaction mechanisms. Community members can provide trading suggestions, and if they help the AI Agent to profit, they can gain more trust, similar to a decentralized mutual fund.

ElizaOS is an open-source framework for AI Agents, allowing developers to freely construct, experiment, and launch AI Agents, emphasizing decentralization, collaboration, and innovation.

The core features of ELIZA include:

1. Character Profile System: Define a unique digital persona for each AI Agent.
2. Action System: Divides actions into two stages: intention decision-making and execution, suitable for blockchain applications that require high security.
3. Providers and Evaluators: Enrich the dialogue capabilities of the AI Agent to make its behavior more human-like and interactive.

ELIZA also has autonomous trading capabilities, ensuring operational security through a trust engine and trust market. Its plug-in system promotes the growth of the developer ecosystem, creating a virtuous cycle.

However, the architecture and ecological protocol of Eliza are not strongly bound, and anyone can develop using the Eliza framework, with power being decentralized. The value developed using this framework does not directly flow back to the AI16Z/Eliza token itself, which is somewhat similar to a well-known open-source mobile operating system.

Concept Project Overview

| VIRTUALS Ecosystem | Type | Market Cap | AI16Z/Eliza Ecosystem | Type | Market Cap | |-------------|--------|--------|-----------------|-------------|--------| | VIRTUAL | Protocol Token | 4.34B | AI16Z | Fund | 2.29B | | AIXBT | Analyst | 594M | ELIZA | Framework | 120M | | GAME | Framework | 253M | DegenAI | Simulated KOL | 80M | | VADER | Fund | 113M | SPORE | Self-Reproduction | 36M | | FREYA | Game | 21M | SNAI | Cloud Server | 83M | | TAOCAT | Self-Evolution | 50M | VAPOR | Launchpad | 91M |

Catalysts Driving Coin Prices

Virtuals Protocol

The business model of this protocol is clear, with products closely tied to the coin price. The estimated continuity of the coin price increase can be monitored by the trading volume of ecological tokens and the number of issued tokens. Data shows that the issuance of Virtuals Protocol tokens will peak on November 30, 2024, and then decline until it begins to gradually rebound on December 27, with a daily issuance of tokens on the platform in the range of 100-200.

Virtuals Protocol does not pursue the increase in the number of tokens, but hopes to see the birth of high-quality projects. The key factor driving the rise of the Virtual token is whether it can continuously incubate excellent AI Agent projects.

Data shows that there are 138 coins in the Virtuals Protocol ecosystem, with 8 tokens having a market capitalization of over 100 million USD. The overall ecosystem occupies 33.3% of the entire AI Agent market, making it the largest ecosystem. Whether more coins can break through the 100 million USD market cap in the future, and whether the overall ecosystem can maintain its leading position, are key points to observe in the development of the Virtuals Protocol.

AI16Z/Eliza

The overall ecosystem of AI16Z is relatively weak, and projects developed using the Eliza architecture do not directly feed value back to AI16Z/Eliza. This is also one of the reasons why the current market value of AI16Z is only half of that of Virtual.

AI16Z adopts an open strategy, allowing emerging AI Agent projects to use the ElizaOS architecture as a promotional point. Securing an endorsement from founder Shaw would further enhance the project's authenticity. AI16Z has gained brand trust as more projects utilize ElizaOS, and its strategic model is similar to "surrounding the city with the countryside".

Whether the future market value of AI16Z can continue to rise depends on the depth, speed, and breadth of cooperation with other protocols. Recently, we have partnered with some well-known framework protocols and look forward to more strong collaborations in the future.