Virtuals Protocol: A Deep Dive into Creating On-Chain AI Agents in Three Minutes

1. Project Overview

Virtuals Protocol was established in 2021 and is an AI Agent generation platform based on blockchain technology. The project aims to enable anyone to create virtual characters that can interact with their environment, fundamentally changing the way virtual interactions occur by creating personalized and immersive experiences.

The project officially launched in 2023, with the core vision of achieving decentralized co-ownership of AI agents through blockchain technology, promoting the widespread application of AI in areas such as gaming, entertainment, and the metaverse. The AI agents of Virtuals Protocol possess multimodal interaction capabilities and can operate seamlessly across multiple platforms.

2. Development History

2021: The predecessor of the project, PathDAO, was established, focusing on gaming guilds and GameFi investments.

2023: PathDAO officially transformed into Virtuals Protocol, focusing on the integration of AI and blockchain, and deployed smart contracts on the Base chain.

2024: Launched the first AI agent Luna, gaining over 500,000 followers on social platforms. Currently, more than 1,000 AI Agents have been created on the platform.

End of 2024: The token $VIRTUAL will be listed on multiple well-known exchanges, significantly increasing its market capitalization in a short period and entering the mainstream cryptocurrency market.

3. Core Team

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

• Jansen Teng: Co-founder and CEO, graduated from Imperial College London, previously worked at Boston Consulting Group.
• Wee Kee: Co-founder, educated at Imperial College London and London Business School, and has also worked at Boston Consulting Group.

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

4. Business Model

Virtuals Protocol operates on a decentralized model, using blockchain as the infrastructure and leveraging smart contracts to ensure transparency and fairness in ecological interactions. Users can create AI agents through a simple interface, and the platform charges fees based on the complexity of the agents.

The platform encourages developers to create derivative applications based on the Virtuals Protocol and collaborate through revenue sharing and other methods. Currently, there are about 20 different types of derivative applications being developed or in trial operation.

5. Ecosystem

The ecosystem of Virtuals Protocol includes the following layers:

1. Protocol Layer: Provides AI models and algorithms, supporting developers to create and deploy AI agents.
2. DApp Layer: Allows decentralized applications to integrate AI agent functionalities.
3. Contributor Network: Data contributors, validators, and developers earn $VIRTUAL rewards through their contributions.

6. 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 uses of the token include: creating AI agents, paying service fees, participating in protocol governance, and more. The design of the token economic model aims to enhance the scarcity and value of $VIRTUAL through deflationary mechanisms and community incentives.

7. Industry Outlook

The AI Agent industry is currently in a rapid development stage, with strong market demand for intelligent services. It is expected that the market size will grow from the current $10 billion to $30 billion within the next 5 years, and Virtuals Protocol is situated in a highly potential blue ocean market.

8. Competitor Analysis

1. AgentX: Laid out AI Agent earlier, with over 100,000 users and collaborations with large enterprises. However, it adopts a centralized architecture, which has limitations in data privacy and user ownership.

2. Altered State Machine ($ASTO): Create and train AI-driven NFT platforms. Compared to Virtuals Protocol, it is slightly lacking in decentralized governance and cross-platform integration.

3. Olas Network ($OLAS): A framework aimed at bridging the gap between AI and blockchain. The community size and influence are relatively small.

9. Development Plan

Short-term: Optimize user experience, lower technical barriers, increase user numbers, enrich application scenarios.

Medium term: Expand international markets, enhance project visibility, and strive to be listed on more mainstream trading platforms.

Long-term: Committed to becoming a global leading AI and blockchain integrated ecological platform, building a vast digital world covering various AI agent applications.

10. Summary

Virtuals Protocol demonstrates strong potential in the integration of AI Agents and blockchain. It has a professional team, solid technical foundation, unique business model, and clear development plan. The $VIRTUAL token has multiple uses, a well-designed economic model, and long-term value appreciation potential.

Considering the high growth expectations in the industry, the continuous improvement of the ecosystem, and market competitive advantages, there is still room for $VIRTUAL to appreciate in valuation in the long term. However, given the significant increase in the token's market value in the short term, it is advised that investors proceed with caution.

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