Demystifying Virtuals Protocol: AI Agents and Revenue Sharing in the Metaverse

Virtuals Protocol is an innovative project enabling users to profit from AI agents. These agents are designed to automate tasks ranging from livestreaming and virtual concerts to gaming and on-chain transactions, according to the project team. Beyond revenue sharing, Virtuals Protocol also empowers users to create their own AI agents. Currently, the platform operates on both the Base and Ethereum networks.

Learn more: What are AI Agents in the crypto market?.

Virtuals Protocol Interface.

Product Architecture and Operational Model of Virtuals Protocol

Co-ownership Layer: Sharing the Spoils of AI Labor

The core of Virtuals Protocol lies in its co-ownership layer, facilitating revenue sharing from AI agents. Here’s how it works:

• Agent Creation and Tokenization: Virtuals Protocol creates AI agents and issues 1 billion associated tokens.
• Token Purchase and Profit Distribution: Users purchase these tokens using VIRTUAL, the platform’s native token. Token holders then receive a share of the AI agent’s earnings generated from activities like livestreaming and virtual concerts.
• Token Buyback and Burn Mechanism: A portion of the revenue is used to repurchase and burn AI agent tokens, reducing supply and potentially increasing token value. This process is often referred to as a token burn.
• Governance Rights: Token holders also gain governance rights, enabling them to participate in decision-making processes and vote on proposals related to AI agent development and improvements.

Virtuals Protocol Operational Model.

Virtuals Protocol also incorporates an AI agent upgrade mechanism based on token market capitalization:

• Level 1: Basic chat functionality within the Virtuals Protocol platform.
• Level 2: Automated posting on X (formerly Twitter).
• Level 3: Interaction with token holders via Telegram.
• Level 4: Enhanced interaction capabilities.
• Level 5: Web3 integration and on-chain transaction capabilities.

Higher levels unlock greater earning potential for AI agents, translating to increased profits for token holders.

Co-ownership Layer Interface.

AI Agent Launchpad: Birthing New AI Entities

This platform allows users to create and sell meme coins. If a meme coin reaches a certain market capitalization, Virtuals Protocol creates a corresponding AI agent on the co-ownership layer and adds liquidity for the token on Uniswap.

The AI Agent Launchpad operates as follows:

• Meme Coin Creation: Users design custom meme coins with unique names and tickers.
• Token Sale: The newly minted meme coins are offered for sale on the Launchpad. Each transaction incurs a 1% fee, covering both Base network fees and platform costs.
• Bonding Curve Model: Similar to platforms like Pump.fun, the meme coin price follows a bonding curve, meaning the price increases with buying pressure and decreases with selling pressure.
• AI Agent Creation Trigger: Once a meme coin’s market capitalization reaches $420,000, Virtuals Protocol creates an associated AI agent, sets up an X account for it, and allocates $35,000 to establish a liquidity pool on Uniswap, paired with VIRTUAL.

While mirroring existing meme coin platforms, the AI Agent Launchpad offers the unique advantage of potential AI agent creation and X promotion, adding a layer of utility beyond pure speculation. However, it’s important to acknowledge the inherent risks of meme coins, including potential pump-and-dump schemes.

Further Reading: How Pump.fun Works

AI Agent Launchpad Interface.

Understanding the VIRTUAL Token

VIRTUAL Token Key Metrics

• Token Name: Virtuals Protocol
• Ticker: VIRTUAL
• Blockchain: Ethereum, Base
• Ethereum Contract: 0x44ff8620b8ca30902395a7bd3f2407e1a091bf73
• Base Contract: 0x0b3e328455c4059EEb9e3f84b5543F74E24e7E1b
• Token Type: Governance, Utility
• Total Supply: 1,000,000,000 VIRTUAL

VIRTUAL Token Allocation

• Public Distribution: 60%
• Ecosystem: 35%
• Liquidity Pool: 5%

VIRTUAL Token Allocation.

Team, Investors, and Partners of Virtuals Protocol

While the team behind Virtuals Protocol remains anonymous, the project has successfully completed four funding rounds:

• December 1, 2021: $250,000 raised through an IDO on PAID Network.
• December 1, 2021: Seed round led by DeFinance Capital and Merit Circle (amount undisclosed).
• December 3, 2021: $125,000 raised through an IDO on Enjinstarter.
• December 4, 2021: $16.23 million raised through an IDO on Fjord Foundry.

Strategic partners include prominent platforms like Ora Network and Chasm.

Exploring Similar Projects

• Goatseus Maximus: A Solana-based meme coin project notably promoted by an AI bot named Truth Terminal.
• Pump.fun: A platform enabling users to create, launch, and trade meme coins.