Virtuals Protocol: Create an on-chain AI Agent in three minutes

I. Project Introduction

1. Basic Information of the Project

Virtuals Protocol was established in 2021 as a blockchain-based AI Agent generation platform. The project aims to enable anyone to create virtual characters that can interact with their environment, revolutionizing the way virtual interactions occur. The project officially launched in 2023, with the core goal of achieving decentralized co-ownership of AI agents through blockchain, promoting the widespread application of AI in areas such as gaming, entertainment, and the metaverse. Virtuals Protocol's AI agents possess multimodal interaction capabilities and can operate seamlessly across multiple platforms.

2. Project Development History

The development of the Virtuals Protocol can be divided into the following important stages:

• 2021: The project predecessor PathDAO was established, focusing on gaming guilds and GameFi investments.
• 2023: With AI technology sweeping the globe, PathDAO has transformed into Virtuals Protocol, focusing on the integration of AI and blockchain.
• 2024: The first AI agent Luna was launched, gaining over 500,000 followers on social media platforms. Currently, more than 1,000 AI Agents have been created on the platform.
• End of 2024: Launched on multiple trading platforms, the token $VIRTUAL's market value skyrocketed from several tens of millions of dollars to over 3 billion dollars in just over two months.

3. Core Team Background

The team of Virtuals Protocol consists of a group of young individuals with experience in consulting, blockchain, AI, and gaming. The core members include:

• Jansen Teng: Co-founder and CEO, graduated from Imperial College London, previously worked at Boston Consulting Group.
• Wee Kee: Co-founder, holds a Bachelor's degree from Imperial College London and a Master's degree from London Business School.

Other team members mostly come from Southeast Asia, with educational backgrounds from prestigious universities such as Cambridge University and Imperial College, and have work experience in well-known companies.

2. Business Model

1. Operation Mode

Virtuals Protocol adopts a decentralized operation model, relying on blockchain as the underlying infrastructure, and utilizes smart contracts to ensure the transparency and immutability of various interactions within the ecosystem. Users can create AI agents through an easy-to-use interface, and these agents possess unique attributes and functions.

The platform charges users for creating and managing AI agents, with the fee structure differentiated based on the complexity of the agents and the resources they consume. At the same time, the platform encourages developers to create derivative applications based on the Virtuals Protocol and collaborate through methods such as revenue sharing. Currently, there are about 20 different types of derivative applications being developed or in trial operation on the platform.

2. Ecosystem Construction

The ecosystem of the Virtuals Protocol includes the following layers:

• Protocol layer: Provides AI models and algorithms to support developers in creating and deploying AI agents.
• DApp layer: Allows decentralized applications to integrate AI agent functionalities, such as NPCs in games and virtual influencers in social media.
• Contributor Network: Data contributors, validators, and developers earn $VIRTUAL rewards by contributing data and models.

3. Token Economics

$VIRTUAL is the core token of the Virtuals Protocol, with a total supply of 1 billion tokens, distributed as follows:

• 60%: Public circulation
• 35%: Ecosystem Treasury
• 5%: Liquidity Pool

The main uses of tokens include:

• Underlying asset: used to create new AI agents and liquidity pools
• Payment Tool: Users can pay the service fees of AI agents through $VIRTUAL.
• Governance: Token holders can participate in protocol governance and resource allocation decisions.

The token economic model enhances the scarcity and value of $VIRTUAL through deflationary mechanisms and community incentives.

3. Project Prospects

1. Industry Analysis

The AI Agent industry is currently in a phase of rapid development, with the global market size expanding at an average annual growth rate of 40%. In the next 5 years, the market size is expected to grow from the current $10 billion to $30 billion, and the Virtuals Protocol is situated in a highly potential blue ocean market.

2. Competitor Analysis

Compared to major competitors like AgentX, Altered State Machine, and Olas Network, Virtuals Protocol has certain advantages in decentralized governance, cross-platform integration, and market capitalization.

3. Development Plan

The development plan of the Virtuals Protocol includes:

• Short term: Optimize user experience, lower technical barriers, with a target user count of 15,000.
• Mid-term: Expand international markets, enhance project visibility, and strive to launch on more trading platforms.
• Long-term: To become a global leading AI and blockchain integrated ecosystem platform, building a digital world that encompasses various AI agent applications.

4. Conclusion

Virtuals Protocol demonstrates strong potential in the fusion of AI Agent and blockchain. It has a team with diverse professional backgrounds, a solid technical foundation, a feasible business model, and a clear development plan. The $VIRTUAL token has multiple uses, a well-designed economic model, and long-term appreciation potential.

Considering the industry's high growth expectations, the continuous improvement of the ecosystem, and the competitive advantages in the market, $VIRTUAL still has some room for valuation increase in the long term. However, given the significant increase in the token's market value in the short term, it is recommended that investors buy cautiously.

In the future, with the innovation of AI technology and the expansion of blockchain applications, Virtuals Protocol is expected to stand out in industry transformation, becoming a key force in leading industry development and bringing a richer, more convenient, and intelligent digital life experience to global users.