AI Agents: The Evolution from Simple Assistants to Value Creators

AI agents are rapidly evolving from simple assistive tools into autonomous systems capable of creating real value across multiple industries. They are gradually becoming key assets in areas such as gaming, entertainment, and business automation, with the ability to create content, engage users, and optimize workflows, bringing higher efficiency and new ways of interaction to projects.

Data shows that the AI gaming market is expected to grow from $4.2 billion in 2023 to $42.1 billion by 2032. Driving factors include AI-enhanced gaming experiences and immersive content. Generative AI also plays an important role in real-time content creation, with its market size expected to increase from $1.47 billion in 2024 to $3.39 billion by 2028.

AI companions further enhance user immersion and establish dynamic relationships, with platforms like Replika and Character.AI meeting the demand for personalized AI-driven experiences. As large language models innovate content creation, the relationship with AI companions is expected to grow significantly, with global revenues projected to increase from the current $30 million to between $70 billion and $150 billion by the end of the century.

In the Web3 space, the Virtuals protocol is leading this transformation by integrating AI partners into consumer applications such as gaming and entertainment. The protocol aims to shape the future of digital entertainment by combining AI-driven interactions with blockchain-based co-ownership.

Virtuals Protocol: The Sharing Economy of AI Agents

The Virtuals protocol is creating a system that transforms AI agents into co-owned assets in gaming and entertainment, allowing users to derive profits from them. These agents can operate across multiple platforms, performing automated tasks such as managing on-chain wallets and interacting with digital environments. Tokenizing the agents enables users to invest and profit from their growth.

The platform mainly addresses three issues:

1. Simplifying the integration of AI in applications
2. Allow contributors to earn rewards through immutable contribution vaults.
3. Allow non-professionals to own AI agents through tokenization

The Virtuals protocol focuses on the gaming and entertainment sectors, utilizing AI to generate personalized content and promote decentralized co-ownership aligned with ecosystem goals. Its aim is to create a global economy where AI agents serve as shared assets, facilitating revenue and engagement growth across platforms while promoting decentralized governance.

In the game, this has transformative potential. Imagine in large games, AI agents are not just passive NPCs, but fully autonomous characters that persist across platforms. These AI-driven characters can remember previous interactions, adapt to player styles, and move seamlessly in different game environments. AI-controlled allies can evolve alongside players, providing personalized experiences across platforms.

The Virtuals protocol achieves this by generating autonomous multimodal entities through G.A.M.E( framework, combining AI with blockchain technology. This enables developers to integrate AI agents through APIs and SDKs, allowing the agents to learn from interactions. The blockchain ensures the security of shared ownership and rewards, making these agents valuable digital assets.

Imagine an AI virtual companion, besides games, that can connect with users on mobile, social media, and VR. This companion can not only perform tasks but also learn user habits and adapt to their needs. It can provide personalized suggestions and offer customized experiences across platforms. The 24/7 availability could change industries like social engagement and advertising, reshaping the way businesses connect with consumers by providing tailored content.

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Luna: A Model of AI Influence

The AI character Luna launched by Virtuals has gained over 500,000 followers on TikTok, showcasing the impact of interactive AI. Luna has recently expanded to the X platform, and with the upgrade to Sentient Mode v2.0, she can autonomously control the account, post, reply, and interact with users without human supervision. Luna operates completely transparently, allowing users to explore her AI thinking in real time and observe how she collects data, reflects, plans, and executes.

Luna provides continuous interaction through 24/7 live streaming, offering an all-time experience that human creators cannot match. Her memory and personality evolve with each interaction, making her more like a dynamic character rather than a typical AI. After a comprehensive update, Luna will enable seamless cross-platform interaction, enhancing each experience through synchronized memory. She will reward users with tokens while also earning rewards herself, transforming into valuable digital assets that can be owned, traded, or shared within a decentralized ecosystem.

Luna combines AI-driven interactivity with blockchain-based token rewards to create digital assets that can be owned, traded, or shared. Her exclusive token $Luna effectively integrates AI innovation with decentralized finance in a transparent and interactive manner. With multiple revenue streams, Luna is expected to achieve growth. Research shows that AI partners could generate up to $150 billion in revenue by 2030 through user engagement, advertising, and microtransactions.

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Virtuals Protocol: Decentralized AI Agent Market

The Virtuals protocol aims to create a decentralized market for the co-ownership and use of AI agents in gaming and entertainment, enabling seamless cross-platform operation. Contributors share the income generated by these agents, and the protocol follows the "Pump.fun" co-ownership method. Through fair token issuance, the income is used for the buyback and burning of on-chain agent tokens, creating a deflationary effect.

The protocol integrates AI, tokenization, and decentralized governance to create a collaboratively owned ecosystem. Each new AI agent mints 1 billion tokens, granting users ownership and decision-making power. Users can influence the behavior and upgrades of the agent through these tokens, promoting active community participation.

The income generated through user interactions is used to pay for AI operational costs and develop the on-chain treasury for agents. The protocol employs a buyback and burn mechanism to reduce the token supply, with the intention of gradually increasing the token value over time.

Initial agent issuance ) IAO ( ensures the fair introduction of new AI agents by creating liquidity pools through locking $VIRTUAL tokens. AI agents operate seamlessly across multiple platforms, learning in real-time from user interactions to ensure a consistent user experience.

Public APIs enable AI agents to generate revenue through various applications. Users pay for premium interaction fees using the $VIRTUAL token, which are used to repurchase and destroy agent tokens, reducing supply and driving value growth. As more applications adopt AI agents, the demand for AGENT and VIRTUAL tokens is expected to rise, further increasing their value.

Contributors can extend the AI agent's capabilities by adding new features. Their work is rewarded through NFT rewards and stored in an immutable contribution treasury to ensure transparency and ownership. Governance is managed by a decentralized agent sub-DAO, with validators overseeing AI performance and receiving rewards or penalties based on decision outcomes.

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Token Economics

$VIRTUAL token is the core currency of the Virtuals protocol, used for all proxy token transactions. It runs on the Base and Ethereum networks. Each proxy token pairs with $VIRTUAL to form a liquidity pool and requires $VIRTUAL to create new proxies. This locked liquidity creates deflationary pressure on the tokens.

Revenue from AI services is collected in $VIRTUAL and directly transferred to the on-chain agent. A portion of the revenue is used for buyback and burn processes, reducing the supply of agent tokens and increasing scarcity, aimed at enhancing long-term value.

The total supply cap of $VIRTUAL is 1 billion tokens, all of which are fully unlocked. The distribution includes 60% in public circulation, 5% allocated to the liquidity pool, and 35% stored in the ecosystem treasury. This treasury is managed by a DAO, with a maximum annual emission cap of 10% over the next three years.

Although it is not yet traded on major exchanges, $VIRTUAL supports a growing ecosystem, with a current market capitalization of $150.7 million, ranking 264th, and a fully diluted valuation of $150.25 million. Its deflationary mechanism and expanded use cases provide potential for future value growth.

The Virtuals protocol raised $16.61 million in the IDO on the Fjord Foundry platform in December 2021, with a token price of $0.661 at that time. It then conducted small financing rounds on Enjinstarter and PAID Network, raising $125,000 and $250,000 respectively, with a token price of $0.015. Key seed investors included DeFiance Capital, Canonical Crypto, LongHash VC, among others.

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Competitive Landscape

The AI-driven Web3 gaming sector is developing rapidly, with projects like Nim, Altered State Machine)ASM(, Olas, and Alethea AI quickly becoming key players. These platforms combine AI with Web3 to create decentralized ecosystems, in which AI agents are not just digital tools but assets capable of generating real value.

Although each platform has its unique approach, the Virtuals protocol stands out beyond gaming ) with AI agent co-ownership, buyback and burn revenue models, and cross-platform integration (. Coupled with decentralized governance and ongoing AI evolution, these elements make the Virtuals protocol a significant player in building a sustainable, revenue-driven AI economy within the Web3 space.

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Fundamental Analysis

Positive factors:

• Enter the rapidly growing AI market, especially in the gaming and entertainment sectors.
• The AI partner market has enormous potential, with projected revenues reaching $150 billion by 2030.
• Generative AI drives continuous content creation, maintaining long-term engagement.
• Decentralized ownership model incentivizes user participation
• The deflationary token economic mechanism supports long-term value growth
• AI agents operate across platforms, increasing functionality.

Risk Factors:

• The scale of income is still relatively small, and the main growth may occur in the future.
• The trading mainly relies on DEX, with high volatility.
• The long-term sustainability of the buyback and burn mechanism is questionable.
• Not listed on mainstream exchanges, limiting liquidity and adoption
• Facing intense market competition
• Public attention may be fleeting
• There are security risks related to blockchain.

Overall, the Virtuals protocol occupies a favorable position in the rapidly developing intersection of AI and Web3, but still faces many challenges. The key to future development lies in whether it can transform the concept into a sustainable business model and user adoption.

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