The Transformation Journey of Virtuals Protocol: From Gaming Guild to AI Agent Platform

In June 2025, the crypto market witnessed an astonishing wealth migration: the new project IRIS made its debut with an initial market value of $200,000 through the Genesis Launch platform of Virtuals Protocol, and after going live, its market value skyrocketed to $80 million, setting a new industry record with a 400-fold increase. This performance far exceeded the previous record of other projects and made popular projects from other ecosystems look pale in comparison. As the driving force behind this myth, the token VIRTUAL of the Virtuals Protocol platform achieved a 400% increase within six months, with a market cap peak exceeding $5 billion. Currently, this platform has become the largest AI agent launch platform on the Base network. Behind this nationwide celebration is an experiment in wealth distribution reconstructed based on point rules, quietly reshaping the speculative logic and value order of the crypto market.

The Transformation from Gaming Guilds to AI Intelligent Agent Platforms

Virtuals Protocol is a decentralized platform deployed on the Ethereum Layer-2 network Base, dedicated to pioneering the on-chain AI agent economy, allowing users to conveniently create, jointly own, and monetize autonomous AI roles. Its predecessor is PathDAO, a gaming guild established in Malaysia in 2021. PathDAO initially focused on Play-to-Earn projects and NFT communities, successfully raising approximately $16 million through precise positioning in multiple popular gaming projects, reaching a valuation close to $600 million at one point, and accumulating a wealth of gaming assets and an active player community. However, the bear market in 2022 severely impacted the GameFi sector, causing PathDAO's token price to plummet nearly 99%, with its market capitalization shrinking to less than $6 million. The team attempted multiple business lines, all of which failed, bringing the project to the brink of being shelved.

By the end of 2023, the generative AI craze swept the globe, and the concept of AI agents became a new trend in crypto. The PathDAO community voted through on-chain DAO voting to fully transform into an AI-driven protocol, rebranding as Virtuals Protocol, with a core strategy shifting to "assetizing and tokenizing AI intelligent agents and empowering the community." This transformation is based on profound insights: the team discovered that the Japanese VTuber market is massive, but creators only receive less than 20% of the earnings; at the same time, experiments on gaming platforms have proven that AI-driven NPCs can increase player retention rates by about three times. These two data points directly gave rise to the positioning of Virtuals as "profitable AI personalities."

In October 2024, Virtuals will launch on the Base mainnet, introducing the first multimodal AI agent—virtual idol Luna. Luna integrates technologies such as text generation, 3D motion, voice synthesis, and ERC-6551 smart contract wallets, enabling it to autonomously raise operational funds and distribute rewards to fans. After its launch, Luna quickly gained 500,000 followers on social media, and its monthly income from fan tips reached $1.2 million, successfully validating the business model and technical feasibility of on-chain AI agents. Its demonstration effect has attracted significant attention from developers towards the Virtuals project itself.

Riding on the success of projects like Luna, Virtuals will launch its core token VIRTUAL on multiple trading platforms and Base by the end of 2024. Its price skyrocketed from a few cents to a historical high of $5.15, with a market capitalization once surpassing $5 billion, far exceeding most Layer-2 and DeFi projects during the same period, marking Virtuals' entry into the mainstream crypto market. The platform's unique "low threshold, high incentive" mechanism is highly attractive: users only need to stake about 10 VIRTUAL (approximately $200) to create a new AI agent, which automatically generates a liquidity pool locked for 10 years; when the token's market value reaches about $500,000, the system will release a liquidity layer on decentralized exchanges, ensuring trading depth and price stability. This model significantly lowers the participation threshold and stimulates enthusiasm for ecosystem construction.

By June 2025, the Virtuals ecosystem has demonstrated significant scale and economic effects: the cumulative number of AI agents incubated has exceeded 11,000, covering diverse scenarios such as virtual idols, trading advisors, game engines, and content incubation. Virtuals has nurtured over 80% of AI agents on the BASE chain, and its generative multimodal intelligent agent framework G.A.M.E has also become a popular choice for agents in the Web3 gaming and metaverse fields. However, Virtuals' vision goes far beyond becoming a leader in AI agent issuance. Its white paper clearly states that the ultimate goal is to build a true "AI Sovereign Society." Therefore, attracting more ecosystem members to join is key to Virtuals achieving this grand goal and will be a focus of its development for a long time to come.

The Innovative Issuance Model of Virtuals

In order to attract more user attention, Virtuals has innovatively introduced the "Genesis Launch" mechanism to issue AI agent tokens. Unlike traditional linear airdrops or fixed issuances, Genesis Launch is based on the concept of "contribution points (Virgen Points)" which emphasizes participation and contribution rather than pure speculation. Once Genesis Launch was launched, it quickly became a sensation online, and now participating in new token launches on Virtuals has become a new hot spot for investors, with even seasoned speculators discussing how it can replace the once-popular "Alpha Airdrop" model. Unlike traditional airdrops, which are distributed in one go and often lead users to sell immediately, Genesis Launch emphasizes "contribution equals distribution", giving everyone the chance to participate in new token subscriptions based on real contributions. Almost every day in the official community of Virtuals Protocol, members can be seen sharing screenshots of the profits they earned from participating in new token launches using Virgen Points, showcasing a public and transparent rule and threshold that completely overturns the situation where "big players dominate, and retail investors are left out".

Taking IRIS as an example, the project launched its presale in mid-May, locking in over 120 million points in less than 24 hours, with an oversubscription rate reaching 1500%. Tens of thousands of users shared 37.5% of the community share. On the day of listing, the market value of IRIS soared from $200,000 to $80 million, an increase of over 400 times, setting a new industry record for AI Agent issuance, and instantly overshadowing the previous popular projects in other ecosystems.

The reason why Genesis Launch was able to rapidly gain popularity lies in its construction of a "incentive-contribution-reward" closed loop. First, users can earn basic Virgen Points by staking VIRTUAL or holding popular AI Agent tokens within the ecosystem, such as Luna and AIXBT; secondly, users can also accumulate more points by participating in social promotion ("Yapping"), trading on the platform, or staking tokens from other projects. This way, whether you are a novice or an experienced trader, you can find a suitable way to contribute through capital investment or content promotion, greatly stimulating community activity and innovation.

In stark contrast, traditional airdrops often rely solely on snapshot holdings or completing complicated tasks. Most users sell the tokens they receive on the same day. According to data from the platform, over 90% of airdropped tokens experience a significant price drop within 15 days of issuance, with a retention rate of less than 12% after three months. The Genesis Launch, however, employs a point locking and punitive cooling mechanism: if the newly acquired tokens are sold within 24 hours of unlocking, it will trigger a 10-day point reset, significantly curbing the arbitrage behavior of "token farmers" and encouraging participants to hold long-term and continue contributing.

At the same time, the platform provides ample liquidity support for the listing of new tokens. Each Agent Token is paired with a certain amount of VIRTUAL or stablecoins injected into the liquidity pool before trading begins, ensuring that there is no awkward situation of "unable to buy at price" or "unable to sell orders" on exchanges or decentralized exchanges. To prevent large holders or bots from occupying a significant share through multi-wallet knife-style layouts, Genesis Launch sets a limit of no more than 0.5% of the total issuance for each address and uses an on-chain randomization algorithm to further balance distribution, ensuring that small and medium users can also gain a substantial share.

The success of the Virtuals IPO model lies not only in the popularity of the new token issuance but also in driving the "old brings new" effect of the Virtuals ecosystem token. Since the large-scale launch of the Genesis Launch, the trading volume and price of VIRTUAL have been climbing steadily: by mid-June 2025, the daily trading volume of VIRTUAL on the Base chain has exceeded $150 million, an increase of over 80% compared to May; at the same time, holding and staking VIRTUAL to obtain veVIRTUAL governance tokens also allows users to earn additional Virgen Points, leading a large number of users to lock up their holdings and participate in ecological governance for the long term, further solidifying price support and liquidity.

Not only are retail investors flocking to participate, but institutions are also showing a keen interest in this new mechanism of "contribution for profit." In June 2025, the world's first perpetual contract based on VIRTUAL was launched on a trading platform, supporting leverage trading of up to 2000 times. On the first day of its launch, the contract trading volume exceeded 700 million USD, strongly conveying a message: Virtuals are becoming a new target for speculation and hedging in the eyes of institutional investors.

The Evolution from Token Issuance Platform to AI Sovereign Society

In the future planning of Virtuals Protocol, each technological upgrade and mechanism innovation aims to make the outline of the "AI Sovereign Society" increasingly clear. In the initial stage, Virtuals was merely a platform for issuing AI agents, quickly gathering a group of enthusiastic developers and users through token economic mechanisms such as locking liquidity and buyback destruction. With hundreds of AI agent projects landing, the agents began to operate independently and autonomously monetize in scenarios such as gaming, content creation, and market analysis. Users are no longer just spectators but have become co-builders and beneficiaries. The Genesis Launch connects project growth and community participation with the logic of "contribution equals distribution," promoting the free flow of funds and creativity within the ecosystem.

But the real turning point is the "Agent Nation" blueprint proposed by the Virtuals team. This is not just a slogan, but the core path of ecological evolution. The platform allows each AI agent to migrate freely between networks such as Base, Ethereum, and even Solana through the open SDK and cross-chain support; through the Agent Commerce Protocol (ACP), agents can sign contracts, deliver, settle, and repurchase on-chain, achieving a true autonomous business closed loop; community participation is obtained through staking veVIRTUAL for governance rights and sharing transaction fees and repurchase dividends, merging the identities of "participants" and "owners" in the token economy. All of this is constructing a prototype of a digital nation operated by countless autonomous agents and co-governing humans.

So far, this ecosystem has demonstrated several milestone achievements: the security audit agent IRIS launched on the Ethereum mainnet Genesis Launch was listed with a 1500% oversubscription rate, with its market value soaring from $200,000 to $80 million; the virtual idol Luna achieved a monthly income of $1.2 million through fan donations, with its token market value exceeding $120 million; the hedge fund format VADER operates steadily in a cross-chain environment, with a market value exceeding $100 million... These data not only reflect the feasibility of the agent business model but also prove that the "AI agent economy" is transitioning from theory to reality.

With the continuous maturity of multimodal AI technology and cross-chain interoperability, the Virtuals Protocol is undoubtedly at the forefront of building digital civilization. In the future, AI agents will not only be props and tools but will also become "digital citizens" with autonomous decision-making powers and economic rights, participating alongside humans in production, governance, and even cultural creation. Virtuals will no longer be a simple platform; it is nurturing a new type of society from the ground up, co-governed by countless AIs and humans—this is true ecological evolution, an exhilarating leap towards an "AI sovereign society" that has just begun.