Virtuals Protocol Research Report: Building a Blockchain AI Agent Ecosystem

1. Project Overview

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, fundamentally transforming the way virtual interactions occur through 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, enabling seamless operation across multiple platforms.

2. Development History

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

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

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: The token $VIRTUAL is listed on multiple trading platforms, and its market value has significantly increased in a short period, demonstrating the market's high recognition of the project.

3. Core Team

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 backgrounds from prestigious universities and work experience in well-known companies, providing strong technical and resource support for the project.

4. Business Model

Virtuals Protocol adopts a decentralized operating model, using Blockchain as its underlying infrastructure. Users can create AI agents through the platform and pay corresponding fees based on the complexity of the agents. The platform also encourages developers to create derivative applications based on Virtuals Protocol, collaborating through revenue sharing and other methods.

The ecosystem includes three levels: the protocol layer, the DApp layer, and the contributor network, which together promote the development of projects and the expansion of application scenarios.

5. Token Economics

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

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

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

6. Industry Outlook and Competitive Analysis

The AI agent industry is in a rapid development stage, with the market size expected to grow from $10 billion to $30 billion in the next 5 years. Virtuals Protocol has strong competitiveness in this blue ocean market.

Major competitors include:

1. AgentX: Influential in the enterprise-level AI service sector, but utilizes a centralized architecture, which has limitations in data privacy and ownership.

2. Altered State Machine ($ASTO): Focused on AI-driven NFT creation and training, but its performance in large-scale applications and complex scenarios remains to be validated.

3. Olas Network ($OLAS): Aims to bridge the gap between AI and Blockchain, but the community size and influence are relatively small.

In contrast, the Virtuals Protocol has obvious advantages in decentralized governance, cross-platform integration, and market performance.

7. Development Plan

Short-term: Optimize user experience, lower technical barriers, increase user numbers, and 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, achieving deep integration with multiple fields of the real world.

8. Conclusion

Virtuals Protocol has demonstrated strong potential in the integration of AI agents and Blockchain, backed by a professional team, solid technology, and a clear development plan. The $VIRTUAL token has multiple uses and long-term appreciation potential. Considering the industry's growth expectations, the level of ecological completeness, and competitive advantages, the project is expected to stand out in future industry transformations. However, given the current market conditions and the significant short-term increase in token prices, it is recommended that investors proceed with caution.