Virtuals Protocol Research Report: AI Agent On-Chain Creation Platform

1. Project Overview

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

Virtuals Protocol officially launched in 2023, with the core goal of leveraging blockchain technology to achieve decentralized co-ownership of AI agents, promoting the widespread application of AI in areas such as gaming, entertainment, and the metaverse. The AI agents on the platform possess multimodal interaction capabilities, including text, voice, and 3D animation, and can seamlessly operate across multiple platforms.

2. Development History

• 2021: The predecessor PathDAO was established, focusing on gaming guilds and GameFi investments.
• 2023: Transition to Virtuals Protocol, focusing on the integration of AI and blockchain, deploying smart contracts on the Base链.
• 2024: Launch the first AI agent Luna, gaining over 500,000 followers on social platforms; create over 1,000 AI Agents on the platform.
• End of 2024: Listed on multiple trading platforms, the token $VIRTUAL's market capitalization quickly grows to over $3 billion.

3. Core Team

The Virtuals Protocol team consists of professionals from the fields of consulting, blockchain, AI, and gaming:

• Jansen Teng: Co-founder and CEO, graduated from Imperial College London, has founded multiple companies.
• Wee Kee: Co-founder, holds degrees from Imperial College London and London Business School.
• Other members are from Southeast Asia, graduated from prestigious universities such as Cambridge University and Imperial College, with work experience at well-known companies like Accenture and Grab.

4. Business Model

Virtuals Protocol adopts a decentralized operating model, utilizing blockchain as the underlying infrastructure, and ensures the transparency and fairness of ecological interactions through smart contracts. Users can easily create AI agents with unique attributes and functionalities.

The business model includes:

1. Charge users for creating and managing AI agents.
2. Encourage developers to create derivative applications based on the platform and collaborate through revenue sharing and other methods.

Currently, there are about 20 different types of derivative applications being developed or in trial operation on the platform.

5. Ecosystem

The Virtuals Protocol ecosystem consists of three levels:

1. Protocol Layer: Provides AI model and algorithm support
2. DApp layer: allows decentralized applications to integrate AI agent functionality.
3. Contributor Network: Data contributors, validators, and developers earn rewards through contributions.

6. Token Economics

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

• 60%: Public circulation
• 35%：ecosystem treasury
• 5%: Liquidity Pool

The use of tokens includes:

• As the underlying asset for creating AI agents and liquidity pools
• Pay for AI agent service fees
• Participate in protocol governance and resource allocation decisions

7. Industry Analysis

The AI Agent industry is currently in a rapid development stage, with an average annual growth rate of 40%. In the next 5 years, the market size is expected to grow from $10 billion to $30 billion.

8. Competitor Analysis

1. AgentX: Traditional centralized architecture, with strong influence in the enterprise-level AI service sector.
2. Altered State Machine ($ASTO): Focus on AI-driven NFT creation and training
3. Olas Network ($OLAS): Committed to bridging the gap between AI and blockchain

9. Development Plan

Short term: Optimize user experience, lower technical barriers, and increase the number of users by 50% to 15,000 people.

Mid-term: Expand international markets, enhance project visibility, and strive to launch on more mainstream trading platforms.

Long-term: To become a global leading AI and blockchain integrated ecosystem platform, driving industry transformation.

10. Summary

The Virtuals Protocol demonstrates strong potential in the integration of AI Agents and blockchain. The project has a diverse professional team, a solid technical foundation, and a feasible business model. The $VIRTUAL token's economic model is well-designed, with long-term appreciation potential. However, considering the recent significant increase in market value, investors are advised to operate with caution.

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